Procurement Notices

A.Project Description 

The UN Capital Development Fund (UNCDF) is the UN’s capital investment agency for the world’s 46 least developed countries. It creates new opportunities for poor people and their small businesses by increasing access to microfinance and investment capital.  UNCDF provides seed capital – grants and loans – and technical support to help financial service providers reach more poor households and small businesses, and local governments finance the capital investments – water systems, feeder roads, schools, irrigation schemes – that will improve poor peoples’ lives.  UNCDF programmes help to empower women, and are designed to catalyse larger capital flows from the private sector, national governments and development partners, for maximum impact toward the Sustainable Development Goals.   

Making Access Possible (MAP) is a multi-country diagnostic and programmatic framework to support expanding access to financial services for individuals and micro and small businesses. MAP has been initiated by UNCDF as one of its main programmes to enhance financial inclusion in LDCs. Through a dialogue and evidence-based process, MAP aligns a broad range of stakeholders from within government, private sector and the donor community to create a set of practical actions aimed at extending financial inclusion tailored to that country. Importantly, financial inclusion is pursued not as an objective in and of itself, but for its role in achieving the core public policy objective of enhancing household welfare, supporting livelihoods and contributing to economic growth and employment.

UNCDF’s MAP programme seeks to investigate the critical supporting role that digital finance can play in the informal economy, building on the pilot diagnostics in Lesotho and Eswatini (conducted in 2022).  As such, UNCDF requires the assistance of a consultancy that is experienced in the implementation of innovative, qualitative field research to assist with a detailed study on the role of digital financial services supporting community development through the informal economy, in three countries in West Africa in 2023, namely, Togo, Benin and Burkina Faso. In addition, up to four more countries may be included (to be concluded before end of 2024). These countries are currently expected to be Mali, Zimbabwe, Malawi and Ethiopia, but may change over the course of the project period.

The aim of the research is to better understand local economic activity with a particular focus on the informal sector to enable digital finance interventions to local communities for more inclusive growth and allow for increased financing to reach the low-income segment operating in the informal sector, to determine the following outcomes:

• Barriers local communities face in developing their economies;
• How informal organizations (e.g. ROSCAs), people, firms (e.g. mobile money providers) adapt to those barriers and are operating;
• How MSMEs (including farmers) leverage financial services to meet their business and household needs, and in particular, if and how they leverage finance (credit) from formal and informal source; and
• Opportunities for digital finance providers (e.g. firms) and the ensuing institutional framework (e.g. regulators, international organizations) to support more inclusive finance, based on the practical realities, with a few of leveraging community organizations and structures, as well as an understanding of the financial needs and financial behaviour of MSMEs (including farmers).

Furthermore, using the research outputs, the aim is to develop a comprehensive market view for a financing framework by identifying ways in which to address the community environment holistically within the lens of financial inclusion for MSMEs and by determining the potential for digital finance opportunities - with sustainable local economic development being the key driver.  Thus, all nodes of economic activity within the community must be incorporated in the framework resulting from these interventions.

B.Scope of Work

Leveraging livelihoods representative data (for instance FinScope or equivalent) to identify the overall segments and their basic financial behaviour, the research should target MSMEs and farmers within a broader context that takes into account the composition and characteristics of segments of MSMEs and smallholder farmers, as well as their geographic location and concentration.

The qualitative demand side research will therefore need to be undertaken in at least two local communities in each country, that incorporates both urban and rural communities, and include smallholder farmers, as they function fundamentally differently. We currently envisage urban informal traders, and rural smallholder farmers to be the two local focus communities, but this can be informed by engagement with country stakeholders upon project initiation.

To inform the qualitative research, interviews with a limited number of financial sector stakeholders (for instance providers) should also be conducted.

Given the research aims, deep engagement with communities within identified sectors and areas is required for the qualitative demand-side research to identify the following:

1. Understand the role of community, and socioeconomic dynamics.

• Define and determine the real economic activity by identifying how specific local communities function e.g. its daily activities for income generation, usage of energy, use of public facilities, engagement with social groups/activities, social/community norms e.g. funerals, informal arrangements like borrowing food, social norms and contracts – social or legal etc. and overlaying this with the potential for how technology is used. 

• Identify the most pressing socio-economic issues in the community, that would impact on MSMEs, which is known to balance the management of household and business needs, and which uses both business and personal income flows to meet these combination of needs.

       2. Understand community assets and map the stakeholders.

• Identify established structures within the community that can act as ongoing support/bridging institutions for the digital provision of services e.g. cooperatives, savings groups, sports groups, religious groups, etc. This can include places of local/regular congregation or socialization, for example hairdressers. These structures will function as the bridging local institutions for the financial and non-financial service providers involved, by actively engaging and assisting community members, including micro-and small businesses, providing the social cohesive and feedback loops between communities/local economic activity and suppliers/business partners that can better enable digital interaction.
• Identify the financing structures and enablers that are in place in the communities e.g. savings groups or credit cooperatives, and their linkage to financial institutions. Identify whether MSMEs and farmers can access savings groups funding to serve their financing needs either formally or informally.
• Identify key institutional and stakeholder structures within the local communities in order to determine the institutional infrastructure and stakeholder requirements that are key for building inclusive growth from the community level up.

       3. Understand MSME risk management behaviour and resilience.

• Determine the risk and resilience measures used among local communities and as it relates to MSMEs e.g. income protection during Covid, healthcare insurance, insurance of goods, transportation insurance. etc.
• Understand both the household and business risks and how a selection of formal and informal mechanisms are used to mitigate or cope with the experience of such risks.

      4. Understand finance flows (income and expenditure) as well as the use of formal and informal financial mechanisms, and     

          consider digital options.

• Identify the income and expenditure patterns and behaviour of MSMEs and farmers for local and remote payments.
• Identify the financial mechanisms that are being used by MSMEs and farmers, especially the micro/survivalist and informal entrepreneurs.
• Identifying local nodes for income and expenditure flows, and how these can be leveraged to increase local spending within communities, based on their current activities and practical realities. This should take into account spending that happens outside of the community and the reasons for this remote flows. 

       5. Map the potential for formalizing and digitizing financial mechanisms and financing.

• Identify and determine how communities, community organisations, MSMEs and farmers currently use digital financial services, and digital financing (credit) in particular, and how they can be in a position to accept, use and benefit from digital financial services more.
• Central to this objective is design of structures that can work in co-creating with communities and community organisations, to ensure buy-in and ownership of the design and implementation of the interventions.
• This will include defining new and innovative ways to addressing connectivity and communication issues e.g. universal service funds, establishing and enhancing basic financial literacy and the use of digital financial services, and ensuring the support of community and local leaders.

       6. Identify opportunities for digital finance to serve local community development.

• The research should reflect on the potential to impact on/inform enhanced social community development programs – By leveraging newly generated consumer data through the use of digital services on the supply-side at a local level, the research insights determines more effective community development initiatives that can be supported to complement economic development programmes, including and particularly through the use and development of digitizing community participation.

Synthesize the findings from the field work to determine how to better enable financing into communities, based on their economic activities, access to resources and financial services, and access to opportunities.The research should make recommendations to inform a financing matching framework that will be developed with country stakeholders following the conclusion of the project. The research should therefore include at least the following, determined by the field research:

• The financial mechanisms that can be used to support MSMEs and farmers, especially the micro/survivalist entrepreneurs
• The financing structures that are in place in the communities e.g. savings groups and their linkage to financial institutions, usage of savings groups funding;
• Other initiatives (local economic development and any other) that are present in the community and which the community engages and benefits from;
• The financing needs of the community, including support services, based on their current activities that can enable growth
• Determine potential for collaboration around financial inclusion and other livelihoods work in the informal economy, with a focus on digital with either other UN institutions or private sector partners;
• Provide market insights in why and how to digitize these communities i.e., information to identify:
  • The main reason for MSMEs and smallholder farmers to digitize
  • Their absorption power for digital solutions
  • The kind of devices they have and use
  • Current successful digital initiatives which are being used in these communities

C.     Institutional Arrangement

The service provider will report to the MAP Programme manager, based in Johannesburg, South Africa, as well as the Programme Advisor. Additional participants in oversight calls and technical sessions may include key partners or stakeholders at a country or regional level, for instance UNCDF, Government, UNDP,  etc.

D.     Duration of the Work

Work is expected to commence before September 2023, and all work need to be concluded by the end of 2024. The three countries specified should be initiated in 2023 and at least two of the three countries should be concluded by the end of 2023, with the third being concluded latest Q1 2024. Countries included for 2024 should be initiated latest Q1 2024.

All timelines will be discussed and agreed with the project before they are finalized. Contract duration may be adjusted as per methodology to be adopted by the bidders, within the designated timelines as stipulated above, based on engagement with the bidders and acceptance by the Programme.

Technical proposals should include an estimated total work days required, by team member, by country, as follows:

In country field work is anticipated to take between 1 and 2 weeks per country, and the project duration for each country is anticipated to be around 4 to 5 months.

E.      Duty Station

Home based, with field work in up to 3 West Africa countries in 2023, namely Benin, Burkina Faso and Togo, and up to four countries in 2024, namely Mali, Zimbabwe, Malawi and Ethiopia. Two locations per country should be visited – one urban and one rural, and these locations will be discussed and agreed with the project team.

F.     Qualifications of the Successful Service Provider (As indicated in Section 4)

Qualification of the firm:

• Understanding of/experience with impact investment, SDG’s, financing for the low-income market, working with corporate and/or international development agencies; innovative product development, financing frameworks, or community financing needs.
• Previous field work (of any nature) in SADC and/or WAEMU, or in specific countries included in the Bid
• General Organizational Capability which is likely to affect implementation: management structure, financial stability and project financing capacity, project management controls, extent to which any work would be subcontracted
• Relevance of specialized knowledge and experience on similar engagements: Minimum 7 years of relevant, demonstrated experience in developing and implementing qualitative research projects of this scope/scale, including significant experience in the financial services and informal market.
• Quality assurance procedures and risk mitigation measures
• Organizational Commitment to Sustainability

Proposed Methodology, Approach and Implementation Plan:

• Understanding of the requirement: Have the important aspects of the task been addressed in sufficient detail? Are the different components of the project adequately weighted relative to one another?
• Description of the Offeror’s approach and methodology for meeting or exceeding the requirements of the Terms of Reference
• Details on how the different service elements shall be organized, controlled and delivered
• The activities proposed are fit for purpose, appropriate and logically consistent given the scope of work.
• Assessment of the implementation plan proposed including whether the activities are properly sequenced and if these are realistic

Management Structure and Key Personnel:

• Composition and structure of the team proposed. Are the proposed roles of the management and the team of key personnel suitable for the provision of the necessary services? Would suitable country level staff/assistance be provided?
• Qualifications of key personnel proposed (Team leader, Other Key Personnel). Up to two additional senior support staff CVs will be assessed, starting with the most senior. More staff is allowed for proposals, but will not necessarily be assessed.

• General Experience
• Specific Experience relevant to the assignment
• Regional/International experience
• Language & Qualifications: A bachelor’s degree or higher in commerce, sociology/anthropology and political science will be an advantage. Fluency in English is required and at least one team member or local partner (or interpreter) with French language is necessary for West African countries. Ability to communicate in any local languages an added advantage

To assist in ease of evaluation, the above information should be summarized for each proposed team member, along with the proposed role of each team member in the study.

All outputs to be produced in English. Transcripts of all interviews should be provided in English, regardless of the language the interview was conducted in.

G.    Schedule of Payments

Payments will be made for individual countries on the basis of deliverables, based on a project plan, and a payment breakdown per country is as follows:

Condition for Payment Release: Within thirty (30) days from the date of meeting the following conditions:

• UNCDF’s written acceptance (i.e., not mere receipt) of the quality of the outputs; and
• Receipt of invoice from the Service Provider.