1. The Alliance for Financial Inclusion:
The Alliance for Financial Inclusion (AFI) is an innovative, member-driven organization that enables policymakers in developing countries to share their knowledge of financial inclusion policies that have delivered positive tangible results. The network currently comprises 100 central banks, government ministries and other financial policymaking institutions from about 89 emerging markets and developing countries.
By providing members with the opportunity for peer learning and supporting technical level knowledge exchange on key aspects of financial inclusion policy, AFI works with its members to influence policy reforms, which result in expanding the reach of quality financial services to low-income populations and disadvantaged groups.
SME Financing Ecosystem in Africa
Emerging economies in the Sub Sahara Africa have not been able to fully tap the potential of MSMEs due to institutional and regulatory challenges. Regarding access to finance, MSMEs are less likely to secure bank loans than large firms, which hampers their growth, rendering them more vulnerable to market risks. According to the World Bank, about 70% of MSMEs in developing countries lack access to credit, and the current credit gap for formal SMEs is estimated to be US$1.2 trillion globally.
A starting point in removing constraints to MSME development, is the need to provide an enabling environment for access to finance for these enterprises. The policy transformation would not only reduce constraints of MSMEs in accessing financial resources, but also catalyze growth of informal MSMEs into formal MSMEs, generating multiple impacts, including unlocking sources of capital and providing additional economic growth and employment opportunities.
2. Project Background:Importance of MSMEs in Economic Development
Micro, Small and Medium Enterprises (MSMEs) play a major role in most economies, particularly in developing countries. They represent approximately 90% of businesses and more than 50% of employment worldwide, contributing 35% to global Gross Domestic Product (GDP) and acting as an export enabler for developing countries. One-third of the MSMEs in the world are run by women. The World Bank reports that formal MSMEs make up 45% of global employment and 33% of national income or GDP in emerging economies.
According to World Bank studies, 600 million jobs will be needed in the next 15 years to absorb the growing global workforce, mainly in Asia and Sub-Saharan Africa. In emerging markets, 4 out of 5 new positions were created by MSMEs, which is about 90% of total employment, in the formal sector.
Rationale for a Policy Framework on Enhancing SME Financing Ecosystem in Africa
In view of the constraints faced by MSMEs in accessing finance in Africa, the Expert Group on Financial Inclusion Policy for Africa and the SME Finance Working Group intend to develop a Policy Framework on Enhancing MSME Financing Ecosystem in Africa.
It is envisioned that through knowledge exchange and learning among the policy makers and regulators and in reference to existing literature on MSME financing the framework will identify best practices and provide recommendations on ways of eliminating bottlenecks and maximize the potential of MSMEs contributing to economic growth in the African Region.
The framework will set out key principles and good practice for policy reforms and public interventions to support the development of MSME finance. The expectation is that AFI member institutions in Africa will use the framework as a guiding tool when developing country action plans and national strategies to improve access to finance for MSMEs.
Specifically the Objectives Include;
I. Conduct detailed analysis of policy responses and interventions for enhancing MSME financing ecosystem in Afica and globally.
II. Develop a policy framework for enhancing MSME financing ecosystem in the Africa Region.
4. Scope of Work:
The consultant will be required to work with AFI members and other key stakeholders towards coming up with the deliverables. The assignment entails the following:
i. Preliminary consultations with AFI Management Unit on the scope, expected deliverables and related timelines.
ii. Review existing literature on scope, potential and coverage of various policy responses and interventions that promote financing to MSMEs.
iii. Develop an outline of the report on policy responses and interventions for enhancing MSME financing ecosystem in Africa and globally with the broad contours of the policy framework.
iv. In consultation with AFI Management Unit, conduct telephonic interviews with regulators and other key stakeholders. Interviews with regulators would primarily be with AFI member institutions in countries that have robust MSMEs financing initiatives. Interviews may also be conducted with non-AFI members/advanced countries, whose experience can be helpful to AFI members. Further, interviews would also cover other stakeholders such as financial service providers dealing with MSMEs, academics/researchers and international organisations who have experience in this area. Where possible, AFI Management Unit will assist in setting up the interviews.
a. Preliminary report on policy responses and interventions for enhancing MSME financing ecosystem in Africa and globally,
b. A blog and power point presentation based on the analysis from literature review and findings from qualitative interviews and the policy framework.
c. The draft policy framework,
vi. Collect feedback, guidance and recommendation from AFI members and other stakeholders.
vii. Submit a final version of the report and the policy framework.
i. Scoping and assessment report on policy responses and interventions that enhance MSME financing ecosystem in Africa and globally.
ii. Policy framework for enhancing MSME financing ecosystem in the Africa Region.
iii. Power point presentation summarizing the scoping and assessment report and key highlights of the framework. (AFI power point template will be provided for the presentation)
iv. A blog summarizing the scooping and assessment report and the policy framework
We envisage that the report should highlight case studies of best practices from AFI member countries and beyond. Further, analysis/examples of the initiatives taken up by the market players towards enhancing financing to MSMEs will make the report holistic and representative.
AFI members are committed to the Denarau Action Plan which aims to increase women’s access to quality and affordable financial services globally and the Sharm El Sheikh Accord on Financial Inclusion, Climate Change and Green Finance. In this regard, we envisage that the analysis report as well as the policy framework will take into consideration gender and inclusive green finance perspectives.
During the consultant’s work on this project, AFI Management Unit will assist in achieving the above deliverables by: providing inputs on the report content, where possible, contacting/connecting prospective interview respondents; sharing desk research and literature review to support the deliverables.
The consultancy work will begin on 28 April 2020 until 31 August 2020. The final draft of the study should be completed no later than 31 August 2020.
The consultant undertaking this assignment should have the following qualifications at minimum:
• Advanced degree in a field related to Economics, Public Policy, International Development or related discipline;
• Knowledge and experience in developing MSME financing policies;
• Good understanding of the MSME financing landscape in emerging/developing countries (Added advantage of experience in the African Region);
• Fluency in English (oral and writing) is compulsory;
• Writing experience.
The consultant will work closely with the Policy Programmes and Regional Initiatives (PPRI) Unit and with the AFI’s Africa and Arab Region Office, and other key staff. The consultant will report to Head of the PPRI Unit and Head of Africa Regional Office and will be technically supported by Policy Manager, SME Finance.
9. Criteria of Evaluation:
- Experience of vendor or consultant working with access for finance for Micro, Small and Medium Enterprise (MSMEs), Policies, Regulations and other Interventions.
- Expertise and experience of the vendor or consultant related to the assignment Regional/Globally;
- If the proposal methodology provided is applicable according to the Terms of Reference and if there are an additional and important suggestions, tools, concepts and/or processes proposed by the vendor or consultant;
- The conceptual framework of the proposal including a demonstration of logical and clear planning to execute tasks and complete deliverables.
How to apply
Interested applicants are expected to submit a proposal with updated CV by email to AFI’s Procurement & Contracts Office at RFP2015@afi-global.org
The final decision on selection of a consultant/consulting firm for this project rests with AFI management team and with the Inquiry. Only shortlisted and successful consultants will be contacted.