Term of Reference (ToR) to Conduct Inclusive Financial services Analysis in Woldiya, Amhara Region

Project Title: Economic Recovery for Conflict-Affected Population (ER-CAP)

Consultancy Title: Inclusive Financial Services Analysis

Project Location(s): Ethiopia; Amhara (Woldiya), Afar (Abala) and Tigray (Mekelle) for Internally Displaced People (IDP) and Returnee Women, Youth, and Other Marginalized Groups and host community.

About First Consult Development

First Consult Development (FCD) is an economic development organization dedicated to empowering vulnerable communities by designing and implementing sustainable projects across various sectors, including agriculture, manufacturing, and services. Our multidisciplinary teams leverage local expertise to drive enterprise growth, improve access to finance, and foster skill development. With a proven track record, we’ve successfully created jobs, generated wealth, and attracted investments, ultimately leading to the formation and growth of thriving businesses.

Background

The Economic Recovery for Conflict-Affected Population Project (ER-CAP) is a five-year project aiming to improve the economic adaptation, protection, and recovery of populations affected by conflict. The programme, led by Mercy Corps in collaboration with the Danish Refugee Council (DRC) and First Consult, uses an integrated conflict-sensitive, systems-strengthening, climate-smart, and inclusive approach to enhancing systems that support the economic recovery of communities in three regions. The programme aims to benefit 43,540 individuals, with a specific focus on Internally Displaced Persons (IDP) and returnee women, youth, and other marginalized groups. The expected outcomes include resilient livelihoods, improved access to financial products and services, and enhanced capacity to mitigate protection risks through access to justice and psychosocial support. ER-CAP will support conflict-affected communities and improve their livelihoods by strengthening Micro, Small, and Medium Enterprises (MSMEs) including women and youth-led MSMEs, improving crop and livestock and other potential value chains, and facilitating access to off-farm non-farm income-generating opportunities. Our plan includes assessing relevant agricultural and non-agricultural market systems, facilitating market-driven short-term technical skills training, and improving inclusive employment opportunities through input-output market linkages and advocacy.

The programme will also facilitate access and use of affordable and innovative financial products and technology for conflict-affected communities and MSMEs through strategic partnerships with financial services providers and layering on existing government initiatives, the aim is to facilitate Know-Your-Customer requirements, integrated financial literacy training, and expand mobile and agent banking. Finally, the ER-CAP programme will enhance the protection capacity of conflict-affected communities in Amhara, Afar and Tigray by establishing protection desks and information hubs, providing access to legal solutions, psychosocial support peer support mechanisms, technical support, and coaching for marginalized groups, and conducting Gender Equality and Social Inclusion (GESI) dialogues. Additionally, it will pilot early economic recovery approaches to support vulnerable groups in displacement settings and identify viable business ideas for economic development activities.

 

Objective of the study

• Understand the existing and emerging financial institutions including their services, products, and innovations. Formal (Banks and MFIs), and Semi-formal (SACCOs).
• Understand the financial needs of IDPs, returnees, and host communities and the needs of MSMEs in the target area, focusing on women and youth owned MSMEs.
• Understand any legal/regulatory gaps preventing the uptake and usage of financial services and products from both a demand and supply-side perspective.
• Align and create access to financial resources for participants engaged in the value chains identified during the market systems analysis.

Scope

• The Program team in Addis Ababa and Field based team members from all the consortium partners will be part of the assessment during information gathering and analysis.
• The consultant will prepare an inclusive assessment report by taking into consideration the findings and recommendations from the other complementing study done by ER-CAP Programme.
• The study will be conducted in the Amhara region -Woldiya city Administration and surrounding kebeles.

Deliverables

Task 1: Inclusive Financial services

• Identify and map the existing and emerging financial service providers (formal, semi-formal, informal FIs, and mobile money operators) in the operational region.
• Identify the financial service providers (both formal and semi-formal) current financial capacity, financial products, features (such as loan tenure, interest rates etc)
• Identify and map opportunities and constraints for serving conflict-affected communities including assessing the relevance of the existing products and services that the institutions are providing currently to conflict-affected populations.
• Assess the current capacity/capabilities and challenges that financial institutions face in developing new products that are attractive to MSMEs, IDPs, and returnees and protect the interests of both borrowers and lenders.
• Assess gender-based supply-side challenges and obstacles including FIs’ capacity to serve the women-owned MSMEs especially IDPs, and returnees using standard credit policies and procedures.
• Assess whether the institutions are capable and willing to develop and/or provide innovative financing tools to IDPs and returnees (E.g.: a matrix approach like the WILL-SKILL framework to identify potential).
• Provide market intelligence that would build a sound business case for FIs to profitably serve IDPs, returnees, and host communities.
• Assess the legal requirements of financial institutions by considering the ease of doing business towards the inclusion of conflict-affected populations.
• Assess the capacity-building initiatives that are required to spur IDPs, returnees, and host communities’ uptake and usage of financial services from formal financial institutions.
• Assess the capacity-building initiatives that are required from the supply side to enable them to serve the target groups better. E.g. Governance, de-risking, training etc
• Assess the interest and capacity of the target groups (women, youth, and marginalized groups) about savings, loans, insurance, and other financial services needs to engage in economic activities.
• Conduct six Focused group discussion (FGDs) with host communities, IDP and returnees.
• Conduct Key informant interview (KII) with financial institutions, government offices (i.e. Woreda, Coopartive office, etc.)
• Assess the barriers, behaviors, and motivations of the target groups towards access and use of financial services and products.
• Assess the legal/regulatory gaps preventing these segments from the usage of formal financial services from both demand and supply-side perspectives.
• Align the inclusive financial services analysis with the market systems analysis.
• Propose potential interventions (through designing alternative financing mechanisms) to tailor the needs of the target populations with capable and willing financial institutions to improve the delivery of inclusive and innovative financial services.

Task 2: Cross-cutting issues: Gender Equality and Social Inclusion

• Identify the barriers or the stigma towards lending to women, youth, and other marginalized groups (people with disabilities, elders).
• Assess the current dynamics and how the post-conflict scenario affected the ability of women, youth, and other marginalized groups to access basic financial services.
• Defining interests, needs, and capacities of women, men, and youth in the conflict-affected areas.
• Recognize and analyze intersecting factors such as gender, age, disability, and socio-economic status (current settlement situation, family status, economic engagement, etc.)

 

Methodology

The assessment will deploy a qualitative survey using different tools for both primary and secondary data sources. Purposive sampling based on data saturation (collecting data from a range of different sites and stakeholders until you start receiving the same information). The data collection will consider all the operation areas including Woldiya and surrounding districts.

Some of the tools proposed include but not limited to:

• Semi-structured interviews with market stakeholders
• Semi-structured interviews with formal and informal community leaders
• Focus group discussions with community members.
• Market mapping
• Desk review from trusted sources including NGOs, Gov’t, Universities, Research outputs, and others.
• Key informant interview (KII)

Coordination and Partners Involved

Proper coordination with key partners at the field level is of paramount importance for the success of the assessment. Hence, it is required to closely work with all potential partners, the local community, IDPs, Returnees, Women, youth, other marginalized groups of the community, and the consortium members throughout the whole process of the assessment. Some of the key partners include:

• Target population (IDPs, Returnees, and host community women and youth);
• Women’s social and development groups.
• Religious and traditional leaders.
• Micro, small, medium, and large enterprises including Traders, retailers, and aggregators.
• Government representatives and regulatory bodies.
• Financial Institutions and Service providers.
• Digital technology providers (Money transfer, job matching, e-commerce, etc.).
• Technical Training Providers (Public and private).
• Business Development Service Providers.
• Producers (Crop and livestock producers).
• Employers and employment agencies.

Responsibilities

The Consultant is expected to:

• Submit an inception report detailing the methodology to be used including the main research methods, the sampling techniques, the proposed source of data, procedure for data collection and analysis. The proposed assessment tools will be discussed and approved by First Consult Development before the commencement of the actual data collection.
• Conduct assessments based on the details as discussed under each task.
• Submit a first draft report incorporating suggestions and recommendations of the reference groups.
• Submit a final report (electronic copies of PDF and Word formats).
• Submit an electronic copy of all data collection tools, raw data, and data sets used.

First Consult Development is expected to:

• Recruit the consultant and finalize the consultancy agreement.
• Share relevant documents with the consultant.
• Provide inputs for the assessment, methodology, data collection tools, and report.
• Closely follow up the assessment process ensuring quality control, daily debriefing, and meeting timelines.
• Engage the consortium members in every step of the assessment to ensure inclusive intervention design and quick implementation immediately after the assessment is completed.

Timeframe / Schedule and Location:

The consultancy firm will work with ER-CAP project teams and its partners in the Amhara region and national teams. The study is expected to be completed within a maximum of Thirty days upon signing of the agreement.

Working arrangement and Reporting

The consulting firm will be working under a contract with First Consult Development and will report directly to the First Consult Development-ER-CAP Access to finance lead.

The consultancy firm is expected to work within the required deadlines and be available in accordance with schedule, which can be adapted as needed.

• Having a team of experts for each technical capacity and practice across the humanitarian sector in IDP and host community settings in Ethiopia, especially the Amhara, Afar and Tigray Regions.
• Previous experience of at least 5 years with NGOs and INGOs working on related assignments in the context of IDPs and host communities.
• Experience in facilitating in undertaking qualitative data collection and analysis.
• Excellent presentation and representation skills in multicultural contexts.
• Ability to work under pressure and meet tight deadlines.
• Ability to translate complex technical ideas to a non-technical audience both verbally and in writing.
• Knowledge and experience of embedding cross-cutting approaches as an aspect of organizational change.
• Fluent written and spoken English and team members fluent in Amharic are required.

Evaluation Criteria

	Description	Weight
1	Technical Competency	70%
1.1	Understanding of ToR	20%
1.2	Methodology and Work plan	30%
1.3	Team composition both professional and gender balanced and Internal System	20%
2.	Financial feasibility/budget)- detail cost structure needs to be included	30%

 

• Those candidates who scored below 50% on the technical evaluation will not be considered for financial evaluation.

Instructions for the Technical and Financial Proposal

Interested consulting confirms to send a technical and financial proposal detailing the experience and qualifications of your firm to execute the assignment. The potential consultant should prepare a budget based on the proposed methodology and resources required for the assignment. The financial proposal should include daily fees for the assigned personnel and the total cost to execute the assignment.