AFRICAN DEVELOPMENT BANK 

BANQUE AFRICAINE DE DEVELOPPEMENT

REQUEST FOR EXPRESSIONS OF INTEREST

AFRICAN DEVELOPMENT BANK

Immeuble CCIA, Avenue Jean Paul II, 01 BP 1387, Abidjan 01 Cote d’Ivoire

[Gender Women and Civil Society Department (AHGC)

Email : M.DASSANOU@AFDB.ORG Copy to : R.IJIMBERE@AFDB.ORG; M.OMUKAGA@AFDB.ORG

1. The African Development Bank Group (AfDB or the Bank) hereby invites Consulting Firms to express their interest in the following assignment: Consultancy Services to conduct a multi-country baseline study on the Status of women entrepreneurs and their financial access in Africa henceforth “the assignment” being implemented by the Affirmative Finance Action for Women in Africa (AFAWA) in the Gender Women and Civil Society (AHGC) Department ;
2. The study will report on the status and structure of financing instruments available in the region and their appropriateness to support Women Small and Medium Enterprises (WSMEs). The Study will also look at WSMEs behaviors when it comes to financing and more so credit. Finally the study will issue recommendations to support the roll out of the AFAWA credit guarantee scheme being implemented in partnership with the African Guarantee Fund (AGF) ;

3. The services to be provided under the Assignment include :

• Status of the women SME market indicating the overall size per region/country including the sector concentration and the actual size of the financing gap/need. This should include the regulatory environment in terms of how conducive to women SMEs, the required loan collateral/alternative collateral and what regulations allow/not allow the Financial Institutions to do ;
• A review of financial instruments available in the market and how they are delivered and utilized, through which financial institutions. The research will also look at the availability and type of guarantee schemes to lessen the collateral requirements for women SMEs and their utilization rates, identify financial institutions that target women SMEs with a specific program/approach to increase access to finance and technical assistance that can be leveraged and the awareness of these programs at the level of the WSMEs ;
• Focusing on the end-beneficiary (women entrepreneurs): review risk behavior, gender differences in accessing and performance of loans. Assess the capacity gaps and technical assistance (TA) needs at the level of Financial Institutions and at the level of women SMEs.

4. The Bank invites Consulting Firms to express their interest in providing the above-described services. Interested eligible Consulting Firms shall provide information on their qualifications and experience Availability, appropriateness and usage of financing instruments by WEBs demonstrating their ability to provide the services (documentation, references for similar services, experience in comparable assignments, availability of qualified staff, etc.) ;

5. The eligibility criteria, the establishment of a short list and the selection procedure shall be in conformity with the Bank’s Procurement Policy Framework for projects financed by the Bank Group, October 2015 Edition, available on the Bank Website at http://www.afdb.org. Please, note that interest expressed by a Consulting Firm does not imply any obligation on the part of the Bank to include it in the shortlist ;

6. The estimated duration of assignment is six (6) months and the estimated starting date is November ;

7. Interested consultants may obtain further details in the TOR (attached) or at the address below during the Bank’s working hours from 08:00 to 17:00hours, Abidjan local time ;

8. Expressions of interest must be received at the address or to the email contacts below no later than October 20, 2020 at 17:00 PM UTC and specifically mentioning the name of the assignment baseline study on the Status of women entrepreneurs and their financial access in Africa. Expressions of interest should be written in English. Proficiency in French and any additional languages (e.g. Arabic, Portuguese) are an added advantage.

Address :

AFAWA Manager

Gender Women and Civil Society (AHGC) Department

African Development Bank

Avenue Jean Paul II; 01 BP 1387, Abidjan 01, Côte d’Ivoire

For the attention of : M.DASSANOU@AFDB.ORG

Copy to : R.IJIMBERE@AFDB.ORG; M.OMUKAGA@AFDB.ORG

AFRICAN DEVELOPMENT BANK   BANQUE AFRICAINE DE DEVELOPPEMENT

TERMS OF REFERENCE

CONSULTANCY – BASELINE STUDY ON THE STATUS OF WOMEN ENTREPRENEURS AND THEIR FINANCIAL ACCESS IN AFRICA

AFFIRMATIVE FINANCE ACTION FOR WOMEN IN AFRICA (AFAWA)

1. Background : 

1.1 Women entrepreneurship and access to finance : 

Data from the Global Entrepreneurship Monitor (2017) estimate Women’s Entrepreneurial Activity (WEA) rate at 24% in Africa. This data indicate that the share of African women starting a business is much higher in Africa than most world regions and is on an upward trend. In Sub- Saharan Africa, the WEA rate is reported at 26% while North Africa has only 8%, bringing to fore the socio-economic and cultural realities of the regions.

MasterCard Index of Women Entrepreneurs (MIWE 2019) report indicates that some of the highest Women Business Ownership Rates are observed in Sub-Saharan Africa with Uganda (38.2%, rank 1), Ghana (37.9%, rank 2), Botswana (36.0%, rank 3), Malawi (31.1%, rank 7) and Angola (30.3%, rank 9). The figures exclude the informal economy. The evident entrepreneurial drive and motivation requires support to develop and prosper, particularly in addressing the challenges of access to finance and capacity development for women entrepreneurs. This growing trend of female entrepreneurship presents a considerable business growth opportunity for the financial services sector and an important resource for the continent as a whole. In Africa, an estimated $42 billion financing gap exists for women entrepreneurs across business value chains due to systemic challenges. Some of the hurdles include: high bank interest rates, lack of collateral guarantees, complicated credit application process, lack of business track record and discriminatory treatment from the banks. It is therefore important for financial institutions to exploit the opportunity to support these businesses to grow by ensuring they have the financial and business tools they need, as they are drivers of sustainable economic growth and inclusive development.

1.2 The Affirmative Finance Action for Women in Africa (AFAWA) :

Seeing the opportunity, the women SMEs present for the growth and development of the continent, the Bank has embarked on a major initiative to unlock their entrepreneurial capacity, increase women’s economic participation, and achieve maximum development impact. The Bank’s AFAWA initiative is a pan-African Availability, appropriateness and usage of financing instruments by WEBs initiative aiming to reduce the estimated USD 42 billion financing gap for women in Africa. Through the initiative the Bank aims to unlock USD 5 billion of financing for women SMEs via three components (i) access to finance for women entrepreneurs, (ii) capacity building; and (iii) enabling environment by addressing regulatory and legal constraints. To unlock women SME financing under the access to finance pillar, the Bank established the AFAWA Guarantee for Growth which will focus specifically on de-risking women’s portfolio and addressing the collateral challenges they face in accessing loans. Via the AFAWA Guarantee for growth the Bank aims to unlock USD 3 billion in new financing to women SMEs in the next 5 years.

To implement the AFAWA Guarantee for Growth, the Bank is partnering with the African Guarantee Fund (AGF) to provide partial credit guarantees (PCGs) to Partner Financial Institutions (PFIs) that lend to or are looking to address the financial and non-finance needs of women SMEs.

AGF is a Pan-African institution that promotes economic development, increases employment and reduces poverty in Africa by providing financial institutions with guarantees and other products specifically intended to support SMEs in Africa. AGF’s guarantees are AA- rated by Fitch Rating, which enable them to increase their lending towards SMEs while mitigating their risks.

2. Objective of the Assignment :

The objective of this assignment is to further understand the status of women SMEs and the financing gap, the investment opportunities, available innovative financial instruments and the need for capacity development programs at the level of the financial institutions and at the level of women SMEs at different stages to ensure that women can access financing. The Bank together with AGF seek to achieve this objective by conducting a multi-country baseline study on the status of WSME access to finance by country and sector as well as identify financial institutions with existing women’s market programs and their overall performance and gaps. The results of the study will help refine the strategy for rolling out the AFAWA G4G program, as well as provide baseline to enable tracking and measuring the impact of the program (indicators are attached).

3. Scope of Services :

The Consulting firm will work closely with the Bank AFAWA Team and AGF under the direct supervision of the AFAWA Manager.

This consultancy has 3 components as follows :

1. Status of the women SME market indicating the overall size per region/country including the sector concentration and the actual size of the financing gap/need. This should include the regulatory environment in terms of how conducive to women SMEs, the required loan collateral/alternative collateral and what regulations allow/not allow the Financial Institutions to do ;
2. A review of financial instruments available in the market and how they are delivered and utilized, through which financial institutions. The research will also look at the availability and type of guarantee schemes to lessen the collateral requirements for women SMEs and their utilization rates, identify financial institutions that target women SMEs with a specific program/approach to increase access to finance and technical assistance that can be leveraged and the awareness of these programs at the level of the WSMEs ;Availability, appropriateness and usage of financing instruments by WEBs ;
3. Focusing on the end-beneficiary (women entrepreneurs): review risk behavior, gender differences in accessing and performance of loans. Assess the capacity gaps and technical assistance (TA) needs at the level of Financial Institutions and at the level of women SMEs.

Methodology of the Assignment :

Using human-centered design, the study will adopt a mixed method approach, through an empirical analysis of access to finance ecosystem, combined with secondary data analysis, including financial sector analysis, focus groups discussions and stakeholder surveys and mystery shopping exercise.

The Consultancy Firm should include in the study direct contacts with financial institutions in the fifteen selected sample countries. The Consultancy Firm should also seek easily accessible information from financial industry associations, apex programs and funding structures as well as WMSMEs support initiatives active in the country.

Since the baseline assessment is also meant to contribute towards the strategy for the Bank’s meeting of its commitment of unlocking $3 Billion of financing for women entrepreneurs through the AFAWA Guarantee for Growth program, the study shall engage deeply and systematically with a sufficient sample of financial institutions in Africa. The study should shed some light on the demand and utilization for different types of guarantee products vis-à-vis alternative funding sources, especially in the context of the relevant regulatory framework, and the financial terms available to the institution, and provide a snapshot of market conditions for WSMEs finance in the particular country. It will be important for the consulting firm to understand how simple or difficult it is to leverage the guarantees, to understand the level of internal knowledge when it comes to leveraging the guarantees versus not. Mystery shopping exercises will be necessary to see how FI frontline officers go about addressing the issue of the credit guarantee for women entrepreneurs the demand. At regulatory level the study shall assess the types of guarantees allowed/preferred and why. Further, Women behaviors and risks they face, how they differ from men entrepreneurs in terms of loan seeking, repayment, savings and investments behavior. Also the size of business, sectors, preparedness and what FIs usually ask for when it comes to loans. Considering that women SMEs tend to operate out of their retail accounts instead of operating from a business account, the FIs should provide insights on how a program like AFAWA can help them in making the switch. Similarly there should be a survey done with women SMEs to understand depending on their levels (years of operations, size of business etc.…) what are the average financial needs, for what, where are knowledge gaps situated etc. Suggestions on the design and scope of the TA Facility are most welcome, especially on how to exploit synergies from the provision of capacity building for both financial institutions and women SMEs.

Each interview should produce plausible estimates of the proportion of incremental funding needs that might be covered by the AFAWA G4G.

The analysis will be complemented by desk-based research aiming at mapping out existing women’s market programs that can augment the roll out of the AFAWA G4G in regional member countries and to ensure alignment and synergies with the Bank’s current support to women SMEs. The mapping exercise will include a short description of each of the initiatives in terms of products and complementary services offered, target group and other relevant issues. It will also try to extract from these providers the lessons learnt, in terms of issues and challenges faced in the implementation.

Tentatively, the methodology will comprise :

1. Fact-finding missions to sixteen (16) countries: Morocco in North Africa; Cameroon and DRC in Central Africa; Kenya, Rwanda; Tanzania in East Africa; Angola, South Africa, Zambia in Southern Africa, and Benin, Burkina Faso, Côte d’Ivoire, Ghana, Niger, Nigeria and Togo in West Africa ;
2. Interviews and exchanges (via e-mail, video conferences, telephone) with staff of organizations operating women’s market programs.

It is anticipated that the Consultancy Firm will develop a standard methodology to be applied for each country study, including standardized questionnaires, checklists and format and synopsis for country reports.

The country studies will present information on: (i) macro-economic and financial sector indicators (the major part of this information will be obtained through desk study); (ii) baseline at national level of the number of formal women-owned enterprises (iii) financial sector structure and regulation; (iv) the commercial banking industry including liquidity situation (availability of short- and long-term funds), its capacity for and interest in expanding WMSMEs lending, its demand for different guarantee products and technical assistance support, etc.; (v) WMSMEs lending – trends and issues.

Based on the country and desk studies, the Consultancy Firm will produce a Synthesis Report, which together with the Country Reports will be presented in a draft version to the AFAWA proponents to obtain their consolidated comments. Following receipt of consolidated comments, the Consultancy Firm will produce a Final Report.

5. Expected key outputs and deliverables :

The Consulting Firm will undertake the activities detailed in section 3 and submit the following deliverables to the Bank : Deliverable 1: inception report– the consulting firm shall provide a work plan detailing the proposed approach and methodology to meet the requirements of the Assignment. The inception report in line with the ToR shall include the overall context of the study, the proposed methodology of the Consulting Firm for data collection and analysis and preliminary analysis of the study components. It will include a situational analysis in the selected countries and a work program with a list of periodic deliverables and corresponding timeframes. The work program needs to include a list of potential risks to completion of the assignment and ways in which these risks will be addressed. The Inception Report should be submitted within 2 weeks after the beginning of the assignment and presented to the Bank’s internal stakeholder meeting.

Deliverable 2: A draft and final Country Report presentation of the WMSMEs financial market landscape detailing the status of WMSMEs financing by country and sector, incremental funding needs, available financing instruments and recommendations on appropriate financial instruments that are both innovative and robust, based on the key findings of the market assessment.

Deliverable 3: A draft and final presentation Country Report of the WMSMEs financial instruments available and their appropriateness. It will include a section on how the capacity development component will help to de-risk WMSMEs.

Deliverable 4: Final Synthesis Report (in English) including an executive summary (in English and French, (max.3 pages) and a PowerPoint presentation summarizing main outcomes findings and recommendations from the study

(The      Bank       invites      shortlisted      consulting      firms      to       identify areas where further studies could be of use that may not have been in the purview of the present scope of work).

6. Implementation timeline :

It is expected that the duration for completing the study would not exceed 6 months from the date of contract signature. This period includes the time for the review of the deliverables and the organization of a validation workshop of the study.

Appendix 2: Country Specific Indicators :