RFPs: Consultancy for Capacity Building of Microfinance Banks and Non-Deposit Taking Microfinance Institutions Expected to Participate in RK FINFA Project (Kenya)

AGRA in partnership with the Government of Kenya, International Fund for Agricultural Development (IFAD), Financial Sector Deepening-Kenya (FSD-K),  Cordaid and other Partners are implementing a six-year Programme: Rural Kenya  Financial Inclusion Facility (RK-FINFA) with the objective of increasing rural financial inclusion and green investments by agriculture value chain stakeholders

As part of the Implementation of RK-FINFA, the Government of Kenya in collaboration with AGRA is seeking bids from qualified Technical Service Providers (TSPs) to implement the Technical Support and Innovation Services (TSIS) whose aim is to enhance the capacities of selected financial institutions, smallholder producers and allied agribusinesses to avail and increase the uptake of financial services and products under RK-FINFA. The successful applicants under this specific call for proposals will work under the direct supervision of AGRA to develop a plan for and engage in the capacity building of at least 3 rural microfinance institutions (MFIs) expected to participate in the implementation of the programme.

Component

• Technical Support and innovation Services (TSIS)-Component 1
  • Component 1: Technical Support and Innovation Services (TSIS). This component is composed of two fully inter-linked sub-components, i.e. (i) strengthen Participating Financial Institution (PFI) capacities for innovation, rural outreach and green finance services in Kenya, and (ii) build MSME and smallholder sustainable investment capacities and financial literacy skills particularly tailored to reach women, youth and marginalized groups. The TSIS packages will support the PFIs in the implementation of the rural investment instruments, in line with each PFI’s respective rural and agriculture finance strategy.
    • Sub-component 1.1: PFI Capacity Building for Rural Outreach and Innovation. The expected outputs of this sub-component are: (i) the capacity of five (5)  participating commercial banks, six Micro Finance Banks and 30 Deposit Taking[1]SACCOs improved to provide rural and agriculture financial services including  products tailored to reach 30 per cent youth and 50 per cent women; (ii) the  capacity of all 41 PFIs built to implement and monitor green investment portfolios;  and (iii) Environmental and Social Management Systems operationalized/strengthened by 41 PFIs.
    • Sub-component 1.2: Business Development Services for Agribusinesses and Smallholders. The expected outputs of this subcomponent are: (i) 1,500 small and microenterprises receive Business Development Services (BDS) and can submit bankable business plans; and (ii) 50,000 male and female smallholder producers receive financial literacy training including for preparation of simple business plans appropriate for SACCO/MFB loan applications. The BDS is a key tool for social inclusion targeting of RK-FINFA: minimum of 50 per cent women and 30 per cent youth are included among all BDS clients.

Objectives

• The objective of this assignment is to strengthen capacities of at least 3 pre-selected rural microfinance institutions (BIMAS and others to be selected) for innovation, rural outreach and provision of green finance services in Kenya (supply side) and to  enhance their capacity to qualify for credit from Agricultural Finance Corporation  (AFC) under the green financing facility (GFF). The key technical support areas will be to expand the microfinance institutions rural agricultural finance outreach tailored for the needs of its clientele of organized small-scale producers.
• The expected outcome of the TSIS MFIs sub-component is to have 3 stronger rural financial institutions (MFIs) that can deliver “Green finance products” to rural MSMEs  and households at reduced cost and risk. Innovations in products, delivery channels, and collateral are expected to result from the TSPs support work so that more rural lending can take place in selected counties and value chains

Scope of Work

• The envisaged tasks on the technical support and innovation for MFIs include:
  • Validate and assess capacity needs of MFIs selected to deliver GFF to  smallholder farmers and rural MSMEs based on the initial information  already collected from the on-going IFAD funded projects by AGRA, NT and  AFC.
  • Support Microfinance Banks and Non-Deposit taking microfinance  institutions in developing their Green Finance Strategy, products and toolkits  for delivering the Green Finance to agro MSMES and smallholder producers  including a taxonomy and monitoring framework.
  • Develop (innovative) capacity building plan for the MFIs implementing the  GFF in consultation with individual MFIs and AFC as the GFF host institution.  Innovation is required in the delivery of the capacity building as well as in  the technical content of the support provided (innovation to take place in  financial products, risk mitigation, distribution channels or partnerships)
  • Implement the capacity building to address the needs identified under the  needs assessment ensuring that individual MFIs contribute 15% towards  capacity building costs, allocate adequate staff time and clearly define  expected outputs of the capacity building exercise.
  • Support development of knowledge management products in collaboration  with AGRA and RK- FINFA Project Management Unit at the National Treasury.
  • Conduct monitoring, evaluation and reporting in alignment with the RK[1]FINFA M&E framework including the facilitation of AFC staff to learn from the GFF implementation
  • Implement women, youth and social inclusion strategies in the lending products supported with focus on equipping rural finance institutions (MFIs) with adequate skills and tools.
  • Harness and use of in-house experts and provide technical backstopping support to the MFIs while their staff take over responsibilities.
  • Ensure Environmental and Social Governance standards and management systems strengthened or introduced to the participating MFIs, including risk management.

Payments

• Invoices
  • The consultant shall submit invoices to AGRA as per guidance provided in the contract. Payments are made upon AGRA’s approval of deliverables, which must incorporate AGRA’s comments.
• Reimbursable costs
  • Reimbursable expenses, pre-approved by AGRA, must be invoiced with valid receipts. They will be paid with the consultancy fees if documentation is complete and satisfactory.

Duration

• The assignment is expected to be carried out over a period of 24 months

Location and nature of the assignment

• The location of the assignment shall be in Kenya coordinated by AGRA and RK FINFA PMU. Within the first two years of the project, field activities will be conducted within the seven counties, namely Nyeri, Embu, Meru, Tharaka Nithi, Kirinyaga, and Nakuru  each of which hosts at least two IFAD supported value chain projects. Thereafter the geographic scope will expand to other rural counties in Kenya based on the demand  for the financial services being provided by the project

Eligibility Criteria

• Experience conducting similar work: Demonstrate a portfolio of at least 5 major projects in agricultural finance, financial literacy, or business development services, working with farmers, Bank, MFIs, SACCOs and agriSMEs, especially in partnership with international development agencies.
• Experience in backward and forward linkages: Evidence of linking financial service providers with the demand side of financial services after interventions such as financial literacy training, business plan development for MSMES, value chain integration, and green agricultural practices.
• Expertise in knowledge management: Proven ability to develop training materials, knowledge products, and digital platforms that enhance capacity building for rural communities.
• Track record in gender and youth inclusion: Success in implementing projects where 50% women and 30% youth participation has been achieved.
• Legally registered in Kenya: A Kenyan-registered entity with compliance to local laws, tax obligations, and labor regulations.

For more information, visit AGRA.