Terms of Reference (TOR) for financial service provision to DRC Target Households

Terms of Reference (TOR) for financial service provision to DRC Target Households

1. Background of the Project

In Somaliland, DRC has been implementing RESTORE project funded by EU and has since established community based financial inclusion initiative through establishing District Bank Committees in eight target villages in Somaliland. To consolidate the resilience gains, DRC is adopting Market Systems Development (MSD) approach that will enable target Micro, Small, and Medium Enterprises (MSMEs), farmers, and livestock keepers increase their incomes from targeted value chains. Access to finance is a key constraint for the MSMEs and farmers in Somaliland as majority of MSMEs and farmers, livestock keepers/sellers cannot fulfil the terms and conditions for receiving loans. Thus, local banks are operationally limited in urban areas and are poorly developed, risk-averse.

Regarding this, DRC is exploring partnership with existing formal banks in Somaliland to expand their financial services to DRC target communities in Salahley, Ina Igarre, Qool-cadey, Lughaya, Jalelo, Arabsiyo, Garbodadar and Gargaara Bari village.

1. Purpose of the Assignment

The overall aim of this assignment is to;

• Foster market based financial inclusion service to the disadvantaged vulnerable groups through long-term partnership with local banks,
• Create a market system change to improve access to finance for MSMEs within VSLAs to formal credit financing

Expand financial services to DRC target SMEs within VSLA groups, farmers and livestock traders in Lughaya, Garbodadar, Gargaara, Salahley, Arabsiyo, Jaleelo, Qool-cadey and Ina Igarre.

1. Key Responsibilities

3.1. Scope of consultancy

The selected financial service provider/MFI is expected to outreach DRC target communities in Somaliland, unlocking access to loan for disadvantaged but aspiring MSMEs, and smallholder farmers emerging in the target districts. The selected Bank is expected to expand their operation and services in Arabsiyo, Jaleelo, Salahley, Qoolcadey, inaigare,, Lughaya, Gargaara and Garbodadar  communities in Somaliland

3.2. Key deliverables/outputs

• Design tailor made loan products t) Micro, Small, and Medium Enterprises, VSLA and Smallholder Farmers.
• Expand Loan service to DRC target locations and provide affordable loan to MSMEs, VSLA, and Farmers business development
• Establish flexible protocols and loan guarantee procedures that allow people in remote areas to access financial services of the selected bank
• Track loan repayment and provide regular update to DRC and SomReP Consortium

1. Duration of the Assignment

The duration of this assignment is expected to be until the end of the year. Thus, DRC will offer a contract to the selected Bank/MFI until 31st December 2022, subject to performance and further funding.

• The Bank/MFI have well defined target markets including SME, Farmers and livestock traders
• Willingness to serve farmers, agro-pastoralist, IDPs, returnees.
• The MFI/Bank has operational presence in DRC target districts and have intention to outreach to rural and remote districts
• The Bank/MFI have diverse financial products e.g. Murabaha, Qardhul Hassan, Mushaaraka, Mudaaraba, Ijara
• The Bank/MFI have standard policy and process including client protection policy
• Reputable and legally registered financial institution in Somaliland
• Has relevant experience in economic inclusion activities in the past with NGOs/UN
• The MFIs must have presence either premises or physical in the target project locations
• The Bank/MFI have digital banking systems (mobile banking) whereby remote villages with limited access to physical financial institutions could access and do transactions digitally

All interested financial institutions are requested to submit a detailed technical and financial proposal as separate attachments   in line with the objectives of the ToR by email [email protected] When applying, please indicate “Loan revolving fund” as the subject heading.

Application deadline is 15th August, 2022. 

Any canvassing will lead to automatic disqualification

For more information, Please contact 0634101004 or [email protected]

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