MESPT-CREDIT-03-2022: Training on Agri and Green Financing (Eligible to Individual Consultants)

INTRODUCTION

Micro Enterprise Support Programme Trust (MESPT) is a development organization focused on enhancing, Agricultural Enterprise Development and Market linkages, Agricultural productivity and Food Safety, Financial Access and Inclusion and Green Transformation. MESPT interventions are through small holder farmers and Agricultural SMEs aimed at increasing productivity, incomes and enhancing competitiveness for decent job creation, especially among women and youth.

The engagement of private sector towards achievement of the desired results within focus thematic areas continues to be critical and calls for integrated support mechanisms. MESPT has taken this role to facilitate both forward and backward linkages and build sustainable partnership to sustainably support the eco-system.

MESPT has a tripartite business model that entails working with;

• Small holder farmers – supported to increase productivity and profitability, linked to markets. Focusing on unlocking agricultural potential among women and youth.
• Micro Small and Medium Enterprises (including farmer co-operatives) – Agricultural processors, aggregators, and exporters with direct interface with smallholder farmers to facilitate trade while linking them to financial intermediaries who can lend them working capital and asset financing solutions.
• Financial service providers – We partner with selected FIs/ FSPs by providing them affordable debt financing in wholesale for onward lending to the Agri MSMEs and small holder farmers to enable them to confront the financial challenges in their business ventures. The FIs also benefit from our technical assistance and business advisories.

Vision

“Build a more Prosperous Society”

Mission

To provide sustainable business development and financial services to small holder farmers and Agri SME’s

1. RATIONALE

Enhancing capacities of financial service providers through skills development contributes to a large extent to increased understanding and development of sustainable financing solutions in agricultural sector. Agricultural financing calls for a different approach and increased risk appetite among financial service providers(FSPs). Inadequate information along the value chains, limited knowledge of key risk factors and mitigation and lack of awareness of blended financial instruments have contributed to limited scale of agricultural financing.

Limited financial access and inclusion has been sighted as one of fundamental barriers towards achievement of the desired growth levels in Agricultural sector. The financial service providers have continually deprived the agricultural sector financial investments sighting high risk, uncertainty, lack of markets, minimal margins, uncoordinated support system and lack of verifiable data for decision making. On the other hand, consumers of credit have accused financial service providers of development of unfavorable financial solutions in respect to high interest rates, miss-aligned structures, lack of long-term investments, lack of flexible and patient capital, and enhanced requirements making easy access impossible thus contributing to exclusion among vulnerable groups such as women and youth.

There are fundamental differences between borrowers and lenders. This has contributed to limited focus by financial service providers on agricultural sector. It is against this background that this consultancy has been conceived and designed to disseminate key principles in Agricultural Value Chain and Green Financing. In addition, this training will provide wide practical skills and networking opportunities for enhanced participation in Agricultural and Green financing.

OBJECTIVES OF THE ASSIGNMENT

The objective of this consultancy is to facilitate training to the staff of the selected Financial Service Providers (FSPs) on Agri-value chain and Green financing.

SPECIFIC OBJECTIVES

The objectives of the consultancy are to:

• Development of training modules on agriculture value chain and green financing
• Undertaking necessary training to the staff of the selected financial institutions on agricultural and green financing
• Building the internal capacity (skill set) among staff of the selected FSPs to better serve small holder farmers and other value chain players.
• Enhancing the knowledge base of FSPs in understanding the basics of Agronomy and Agricultural Gross margin analysis concepts
• Enhancing risk management strategies within FSPs in Agricultural and green financing
• Promoting models and mechanism for green financing within the financial sector.
• Enhancing internal capacities of selected FSPs in undertaking monitoring and evaluation to track the efficiency, social impact, and success of the Agri value chain financing.

SCOPE OF WORKS

Working closely with financial institutions management and MESPT credit and Business development manager, the consultant will be required to conduct a 5-day classroom set up training for staff from identified financial institutions on Agri and Green transformation lending skills.

The course will be open to technical staff of the identified financial institutions.

The consultant is expected to use innovative approaches in developing and delivering the course to cater for audiences with differing levels of experience and knowledge.

The Training is expected to focus on but not limited to:

• Understanding the Principles and key approaches of Agri Value Chain Financing
• Explore opportunities to introduce or expand Agri value chain finance.
• Opportunities and risk mitigation through agricultural value chain finance. Demonstration of financial interconnectivity within value chains and why financiers avoid agricultural financing.
• Development of skills for identifying and maximizing on financing opportunities across the Agri-value chains.
• Agricultural value chain financing mechanism-Contract farming, off-taker agreements Lead firm/farmer financing, Input supplier credit facilities, receivable discounting among other mechanisms.
• Importance of green financing and models to facilitate green financing focusing on domestic/household, farm, and enterprise level utilization.
• Flexible Agri and Green credit modelling, structuring-terms, conditions, pricing, collection models, covenants, collateral arrangement among others. What are key considerations in loan structuring – value chain cashflow cycle, market availability, development stage among others.
• Individual verses group credit analysis in Agricultural Value Chain Lending Mechanism. Investment analysis, production, yield and income analysis among others.
• Risk management models in Agricultural Value Chain lending including technical support/ business development services, de-risking solutions, among others.
• Loan monitoring and recovery using Agricultural Value Chain lending Mechanisms (recovery through Co-operative Societies, Lead Farmer and Market facilitator etc). this should include importance for social, environmental monitoring.
• Data collection skills and management by use of standard monitoring and evaluation tools and processes.

METHODOLOGY

It is recommended that for maximum value generation for this assignment, the consultant will adopt participatory approach that includes use of practical case studies and theories within the contemporary agricultural setup.

The consultant is expected to provide a detailed practical methodology, detailed curriculum and training plan/schedule

KEY DELIVERABLES

Milestone 1:

Inception report that highlights (i) Agreed work plan with MESPT (ii) proposed course outline/structure

At least Seven days before agreed training date, the consultants will provide MESPT with:

Training materials/modules in power point, training manual and possible group work etc.

Fully developed case studies to be used in delivery of the course.

Milestone 2:

Deliver the training within the agreed schedule and time periods.

Undertake daily session evaluations and final evaluations and share the same with MESPT and participants. Original evaluation forms or online feedback.

Milestone 3:

Within 7 days after completion of the training share training report incorporating, course outline, training modules, list of attendants, photos and feedback from participants vide evaluation templates, findings and recommendations for future application.

ASSIGNMENT TIMELINES

The assignment will commence immediately after signing the contract with MESPT. The actual training will be carried out in a maximum of 5 (five) with additional three days for preparatory and reporting. During implementation of this assignment, periodic briefing to Credit and Business Development Manager will be appreciated.

CONSULTANT REQUIREMENTS

• In-depth knowledge and experience in Microfinance finance, Agricultural/ Agri value chain finance, Climate/Green finance, Development finance, financial inclusion, Enterprise development and/or Agricultural Value Chain Development
• Demonstrated understanding of concepts for financial and inclusive finance and value chain approaches.
• In-depth experience in undertaking trainings to staff of financial institutions more so for agricultural and green financing models. Evidence of 3 similar assignments for the past 4 years.
• In-depth Knowledge of credit and finance risk analysis and management.
• Master’s degree in relevant field- (Agricultural Economics, Business Management, and development) and 5 years relevant technical experience (Training programs)
• Certification of National Industrial Training Authority, International Labor Organization (ILO) will be an added advantage

INSTITUTIONAL ARRANGEMENT

The Consultant(s) will work under the direct supervision of the Credit & Business Development Manager to adapt and deliver the consultancy appropriately to meet MESPT expectations. During his/her assignment, the consultant will be provided with all necessary information.

DOCUMENTATION REQUIREMENTS

• Covering letter explaining how your experience addresses the requirements of the TOR.
• CV(s) of consultant(s) involved in the exercise
• Provide a copy of certificate of registration and KRA Pin Certificate where applicable
• A copy of valid KRA Tax compliance Certificate-individual
• 3 references of relevant past works, scope, role and contact for the last 5 years
• Provide detailed proposal with a detailed Work plan demonstrating the number of man-days to be employed and budget for this work.

PAYMENT PLAN

The payment plan to the Consultant will be as follows: –

• First payment-30% of agreed cumulative budget upon signing of the contract and satisfactory completion of milestone I
• Second payment-50% of agreed cumulative budget upon satisfactory completion of Milestone II 
• Third and final payment-20% of agreed cumulative budget upon satisfactory completion of Milestone III