AFRICAN DEVELOPMENT BANK
REQUEST FOR EXPRESSIONS OF INTEREST RECRUITMENT OF AN INDIVIDUAL FINANCIAL SERVICES EXPERT TO SUPPORT THE YOUTH ENTREPRENEURSHIP INVESTMENT BANKS (YEIB) INITIATIVE
Human Capital, Youth and Skills Development Department (AHHD)
Financial Sector Development Department (PIFD)
Avenue Jean-Paul II, 01 BP 1387 Abidjan 01, Côte d’Ivoire
Email : j.ndao@afdb.org and m.r.ndiaye@afdb.org; cc: t.muzira@afdb.org; h.elwassimy@afdb.org and r.zegers@afdb.org
- The African Development Bank (AfDB) is the premier pan-African development institution promoting economic growth and social progress across the continent. The Bank delivers financial and technical support to Regional Member Countries (RMCs) through transformative projects that significantly reduce poverty and bring inclusive and sustainable economic growth. In order to sharply focus the objectives of the Ten-Year Strategy (2013 – 2022) and ensure greater developmental impact, five priorities (High 5s) have been identified for scaling up and accelerate the Bank’s delivery, namely: Feed Africa, Industrialize Africa, Power Africa, Integrate Africa, and Improve the quality of life for the people of Africa. In order to accelerate the improvement of the life for the people of Africa, the Bank approved in 2016 the Jobs for Youth in Africa Strategy (JfYA) with the objective to create 25 million jobs and equip 50 million youth with skills for enhanced employability and entrepreneurial success by 2025 ;
- In 2019, the youth unemployment rate was over 30% in North Africa, compared to the regional aggregate unemployment rate of 12% and almost 9% in Sub-Saharan Africa, compared with 5.9% on aggregate for the sub-region. However, at closer analysis, underemployment, and employment in the informal economy, are the clear employment challenges facing Africa’s youth ;
- Economically active as workers in the informal economy or as own account workers, informal work affects 95% of young African workers. Africa’s informal sector is dominated by Micro, Small and Medium Enterprises. (MSMEs), many of which are hindered in their growth by access to affordable finance and quality business development services. Labour intensive by makeup, MSMEs are globally a driving source of employment and inclusive growth. It is estimated that in Africa, the Small and Medium Enterprise (SMEs) sector accounts for more than 80% of jobs created annually and that MSMEs contribute to 33% of Africa’s GDP ;
- However, almost 60% of MSMEs in Africa cite access to finance as the main bottleneck to their growth and risk to their survival. This is because most traditional financial institutions typically overestimate the risk of lending to MSMEs, they are therefore risk averse when it comes to lending to micro, small and even medium enterprises. This has led to an SME credit gap in Africa estimated at over USD 330 billion (almost 15% of Africa’s GDP) and left 51% of the continent’s 44 million formal MSMEs without the finance necessary they need to grow ;
- With no credit history limited work experience and little or no savings, youth entrepreneurs are even less attractive as borrowers to financial institutions. Youth entrepreneurs are also discouraged from borrowing formally. Only 3% of youth in Sub-Saharan Africa borrow for business and only 10% managed to save at a financial institution; they also lack assets to serve as collateral to secure loans from financial institutions, and thus mostly rely on financial support from their family and friends ;
- Considering that most of the new labour market entrants will end up unemployed and discouraged and given the stimulus effect of entrepreneurship to job creation, it is vital that youth are adequately supported as entrepreneurs and provided with the opportunities to become a productive force in African economies – creating their own jobs and for their peers, while fostering economic growth. Harnessed by African economies shifting from being mainly natural resource dependent to being more diversified, service-led, manufacturing intensive, and technology inclined, youth and youth entrepreneurs are strategic to propel Africa onto an advanced growth path ;
- The African Development Bank Group, through its Human Capital, Youth and Skills Development and Financial Sector Development Departments, is therefore seeking the services of an individual financial services expert to support the youth entrepreneurship investment banks (YEIB) initiative. The assignment is in two parts: (i) to support the Bank in the design of the YEIB Initiative and (ii) to support the implementation of YEIBs. The purpose of this assignment is to support AfDB’s regional member countries’ local counterparties in the design of or implementation of additional financial services for youth entrepreneurs as well as to ensure better structures and functioning (and referral systems) of already existing financial services in relevant YEIB countries. The FS expert may also facilitate regional financial support structures.). At a national level, each YEIB will provide financial and non-financial services to youth entrepreneurs. A Regional Centre of Excellence (or “Centre”) will most likely complement the YEIB model and facilitate its roll-out for regional member countries. It is expected that the Financial Services (FS) expert will be part of the Centre ;
- The key role of a YEIB at the country level is to be an ecosystem anchor, a convener and coordinator and to bring together all relevant financial and non-financial parties and partners to play their respective roles more effectively in supporting youth entrepreneurs ;
- The Center would oversee the entire initiative across Africa and act as a platform for pan African ecosystem development activities that no single YEIB can do alone
- The typical investment structure for a national YEIB could be envisaged as a dual HoldCo, one adapted to local investors and donors, contributing in local currency, and a parallel HoldCo with offshore domicile to facilitate international investors and donors, who will contribute in hard currency ;
- The key role of a YEIB at the country level is to be an ecosystem anchor, a convener and coordinator and to bring together all relevant financial and non-financial parties and partners to play their respective roles more effectively in supporting youth entrepreneurs ;
- At a national level, YEIB interventions could target two key distinct youth entrepreneur segments: (i) high growth and scalable youth businesses (which tend to be tech or tech-enabled, and sponsored by youth who have university or technical education); and (ii) annuity-type businesses with reasonable growth prospects (will tend to be production or service oriented businesses, and sponsored by youth who have primarily vocational TVET training). Given the significant differences between the two (2) types of entrepreneurs in their backgrounds, characteristics and their support needs, the underlying instruments and services will likely differ ;
- Responsibilities of the financial services expert will focus on supporting the overall YEIB initiative on finance, investment, and partnership opportunities. The FS expert will provide technical support during the design and operational phases of the YEIB initiative. Specifically, this will include, but will not be limited to :
Design phase :
- Providing technical guidance during the YEIB Feasibility Study phase, including supporting the Bank and firm recruited to carry out the study ;
- Lead, when relevant, the market mapping and analysis of national lending institutions with a strong focus on financing for growing entrepreneurial firms and SMEs and analyze the positioning and value-added of the country YEIB ;
- Guiding the establishment of YEIBs based on best practice, trends and offerings on new financial products and financial technology solutions ;
- Participating in securing investors for the YEIBs ;
- Designing an investment roadshow calendar, schedule and taking part in meetings with potential funders and RMCs ;
- Pursuing and closing formal funding commitments from targeted investors and RMCs; and
- Supporting the overall establishment of YEIBs in RMCs and related tasks as required.
Operational phase :
- Supporting YEIBs in the design, structure and implementation of diverse, alternative and innovative financial products, services, and instruments (including private equity, venture capital, angel network investing, crowdfunding, and guarantees MSMEs) that meet the financial needs of youth-led start-ups and SMEs and achieve the objective of the YEIB initiative ;
- Advising YEIBs on risk mitigation and alternative financing instruments to ensure efficiency and profitability ;
- Advise on the design of local financier/investor financing structures with different risk appetites that will assist in the establishment and availability of different risk instruments for youth entrepreneurs ;
- Support YEIBs in establishing systems and processes for initial screening, due diligence, and financing proposals of youth entrepreneurs, focusing on the positive job, social, and environmental impact potential; and
- Engaging in strategic dialogue with stakeholders, developing and deepening key local and regional partnerships for the YEIBs and Centre; establishing a pipeline of YEIB funders, investors, partners, and Regional Member Countries (RMCs).
- The Human Capital, Youth and Skills Development and Financial Sector Development Departments invite individual consultants to indicate their interest in providing the above-described services. Interested eligible individual consultants shall provide information on their qualifications and experience demonstrating their ability to provide the services (capability statement with references for similar services, experience in comparable assignments, availability of qualified staff, etc.) ;
- The eligibility criteria, the establishment of a short list and the selection procedure shall be in conformity with the Bank’s Procurement Policy for Recruitment of Individual Consultants ;
- The Bank is under no obligation to shortlist any individual consultant who expresses interest ;
- Interested individual consultants may obtain further information at the address below during the Bank’s working hours: 08:00 to 17:00 hours (GMT/Abidjan time), Monday to Friday ;
- The recruitment of the consultant will be in two stages. i) Shortlisting/evaluation of candidates based and the below criteria. A shortlist of three (3) to six (6) consultants will be established.
| General qualifications and relevance to the assignment | 25 |
| Strong expertise and knowledge of financial services, especially for start-ups and | 50 |
| SMEs and experience working in promoting financial services, especially alternative | |
| financing techniques, for youth, start-ups, and SMEs in emerging markets | |
| 3 |
| Experience working with international finance institutions and donors | 5 |
| Excellent communication and presentation skills in English and/or French (Language | 5 |
| Proficiency) | |
| Experience working on entrepreneurship development/SME development in Africa | 15 |
| (Knowledge of the African regional context) | |
| TOTAL SCORE | 100 |
- Consultants having scored over 70 at the shortlisting stage will be invited to take part in a panel interview.
- The consultant to be recruited should have the following qualifications :
- Master’s degree in finance, banking, economics, or closely related subject. An MBA or aPhD would be an advantage ;
- At least fifteen (15) years of demonstrated professional experience in and knowledge of start-ups financing and SME financing is required ;
- Expert understanding of suitable bank and non-banking products and instruments for start-ups and MSME financing and to facilitate access to finance ;
- Expert knowledge of specialized financial agencies/fund of funds or NBFIs dedicated to providing funding and guarantees to national and local financial intermediaries to advance the financing to local SME related target groups ;
- Strong understanding and experience in credit processes and methodologies of SME banking ;
- Experience in VC and angel investing and developing non-traditional financing instruments for the MSME sector in emerging and developing countries ;
- Proven experience working on start-up and SME financing challenges and in developing youth financing products ;
- Demonstrated knowledge of youth entrepreneurship issues/challenges ;
- Strong networks in Africa the investment and banking sector and private equity, venture capital, angel network investing, and guarantee sectors for MSMEs ;
- Proven experience in Africa or other developing countries ;
- Excellent analytical, writing, and presentation skills ;
- Highly developed communication skills; and
- Fluent in English or French, with a high level of proficiency in the other language.
- Expressions of interest must be submitted or sent by email to the address mentioned below no later than 15 October 2021 at 05:00 PM (GMT) and specifically mentioning: “Expression of Interest for Financial Services Expert”.
For the attention of :
Ms. Josephine Ndao, Email : j.ndao@afdb.org
Mr. Rachid Ndiaye, Email : m.r.ndiaye@afdb.org
Copy to :
Mr. Tapera Jeffrey Muzira, Email : t.muzira@afdb.org
Mr. Robert Zegers, Email: r.zegers@afdb.org
Mr. Hazem Elwassimy, E-mail: h.elwassimy@afdb.org