RFP 00239490- Provision of Diaspora Investment Research Consultancy

Published May 15, 2023 · Updated May 15, 2023

Terms of Reference

Exploration of diaspora investment into small businesses in Dadaab, Kenya

Who is the Danish Refugee Council

Founded in 1956, the Danish Refugee Council (DRC) is a leading international NGO and one of the few with a specific expertise in forced displacement. Active in 40 countries with 9,000 employees and supported by 7,500 volunteers, DRC protects, advocates, and builds sustainable futures for refugees and other displacement affected people and communities. DRC works during displacement at all stages: In the acute crisis, in displacement, when settling and integrating in a new place, or upon return. DRC provides protection and life-saving humanitarian assistance; supports displaced persons in becoming self-reliant and included into hosting societies; and works with civil society and responsible authorities to promote protection of rights and peaceful coexistence.

DRC has been operational in Kenya since 2005 and has been working with refugee and host communities to build self-reliance through small business ownership. DRC is present in Garissa (Dadaab & Garissa), Turkana (Kakuma, Kalobeyei & Lodwar), Nairobi and Mandera counties. Kenya hosts a population of 561,836 refugees and asylum seekers, predominantly of Somali and South Sudanese origin. The vast majority reside in Dadaab, Kakuma and Kalobeyei refugee camps, with around 88,884 living in Nairobi and other urban towns.

DRC has, since 2010, operated a diaspora programme to strengthen the constructive aspects of diaspora engagement in former home countries. So far focus has been on Somali, Afghan, Ukrainian, Ethiopian, and Syrian diaspora, and has included a funding mechanism, emergency response, business engagement/job creation, protection information, diaspora civil society mobilization, and advocacy.

Purpose of the Consultancy

The overall purpose of this consultancy is to establish the knowledgebase for development of a diaspora component as part of DRCs endeavor to improving employment and livelihood opportunities in Dadaab refugee camp in Kenya through engagement with existing or new diaspora business actors and with relevant local / international stakeholders.

Background

Many households and small business owners in the Dadaab refugee camp rely on remittances provided by friends and family in the diaspora to sustain their incomes and business operations. Refugees have restricted access to financial services in Kenyan financial markets due to a lack of proper documentation, so finance provided through diaspora communities is vital for small business owners. However, strong financial services connections must be created in order to give refugees and members of the host community the chance to change from a model of ongoing dependence to self-reliance. Additionally, there is still a lack of emphasis on developing an environment that facilitates business financing for refugees in Kenya.

To improve and leverage the opportunity that diaspora remittances provide in the Dadaab camp, DRC would like to better understand diaspora finance flows to small business owners to assess the viability of developing investment opportunities based on existing practices. With the research DRC will explore ways to leverage the effects of the existing engagement by diaspora, including viability of digitizing of diaspora remittances

Objective of the Consultancy

DRC Kenya is looking to engage a consultant to:

Assess /document the economic impact of ongoing diaspora economic engagement among businesses in Dadaab
Describe existing types and modalities of diaspora economic engagement (from individual remittances in support of household consumption, to large scale business investments).
Identify the main diaspora related stakeholders in Kenya and abroad that can be leveraged to further support with small business growth in Dadaab. Such stakeholders may include diaspora individuals, diaspora associations (abroad), charities established in the diaspora, chambers of commerce in Kenya, authorities, etc.
Assess any clan dynamics that may affect diaspora engagement and investment into small businesses within Somali communities in Dadaab
Assess availability of existing financial actors and products for growth of small businesses in refugee and host communities. Describe the extent to which the existing financial products relate to remittances or diaspora finance.
Analyze the challenges and barriers that small businesses face in accessing suitable finance for business growth and where diaspora finance can support
Map out a potential way forward for developing an approach to supporting diaspora investments into small businesses in Dadaab, including the viability of a digital platform to facilitate finance flows

The findings from the research will be used to inform subsequent programming in addressing existing challenges to diaspora engagement and to further enhance positive impact of diaspora engagement in small business development in Dadaab area and other areas where there are strong Somali diaspora links in the country, e.g. Nairobi.

Scope of Work and Methodology

Reflecting the above objectives, the consultant is – more specifically – required to deliver the following outputs.

Baseline mapping of diaspora economic and business engagement in Dadaab including:
- A short literature review of existing surveys and studies of diaspora investment into Dadaab – A survey of businesses that have received diaspora investments or engaged in other types of collaboration / partnerships with diaspora over the past 3 years. This may include small businesses supported through diaspora remittances, businesses started and run remotely by diaspora, local businesses with diaspora investment, businesses with active diaspora partners, diaspora facilitating market access in the region or beyond, etc. – A survey of businesses that have not received diaspora finance and the challenges they face in linking into diaspora finance networks – Approximate amounts invested by diaspora over the past 3 years (average per individual business and total per sector – if possible). – Approximate amounts going to the area as individual remittances in support of households basic needs.

- Identify, map, and categorize existing diaspora business engagement and investment models in the target area. Engagement models can range from small scale cash support from diaspora to family / relatives to set up businesses, personal investments in local business partners, to investing with an expected return on investment. Diaspora philanthropic initiatives in support of local business development can be included and described as a diaspora engagement model.
Identification of potential engagement models for diaspora investment.

Upon preliminary presentation of the engagement models identified during the baseline mapping, the most relevant engagement models should be selected in consultation with DRC Kenya. Each selected engagement model should be described in detail around:

Who are the partners, and what is their relationship?
Who took the initiative – what were the motives?
Choice of business sector
Collection of information for choice of sector, and market opportunities
Financing of the investment (savings, loans etc.), and cost sharing among partners
Different finance modalities and their value to small businesses in supporting growth
Regulation of internal collaboration and decision making (including on profit – sharing or reinvestment)
Potential for replication/scale to other small businesses and investments
Identification of main challenges, best practices and opportunities for selected engagement models.

For each of selected engagement model the consultant should:

Identify and describe the main common challenges faced by diaspora while engaging in local businesses. Such challenges could among others relate to finance, regulatory restrictions/red tape, availability of information on local conditions, engagement with local business partners, or relatives around business start-up.
Identify challenges faced by local companies/entrepreneurs in working with diaspora businesspeople.
Explore clan dynamics and the potential impacts on decision making towards investments into viable business opportunities where there is less affiliation.
For each engagement model, document lessons learned and best practices that were applied by diaspora actors and local companies to overcome the challenges. Such lessons learned and best practices will potentially serve to inspire others in the diaspora or among the local companies to engage.
Capture diaspora actors’ recommendations for the type of support needed to expand existing activities and to boost the level of diaspora engagement for small business development in Dadaab.
Identify prominent diaspora communities that could be potential partners in expanding or starting up activities in Dadaab and their interest in investing in small businesses more broadly.
Describe existing financial products available to refugees and host business development
- Map existing financial actors providing services to refugees and hosts
- Describe existing financial products available for business development, and the extent to which any of them relate to remittances / diaspora investment
- Assess the use of the financial products for business development
- Describe the challenges to access existing financial products
Explore financing modalities that could leverage existing diaspora engagement practices in support of small businesses.
Identify challenges and opportunities with current approaches to finance flows for small business investment, including transaction costs and transparency.
Outline the potential financial products that can leverage existing diaspora engagement practices, including digital platforms in supporting finance flows to small businesses. This would include and assessment of both small business owners and diaspora investors’ appetite for such products.
Map out next steps including potential partners for the development of relevant financing products for diaspora investment, if relevant.

General comments on methodology

As this research is largely exploratory with a mix of primary and secondary sources of information the overall methodology should use a combination of qualitative and quantitative data where available. The documentation of the selected engagement models should use a qualitative methodology based on

Data gathering of small business owners in Dadaab
KIIs with relevant stakeholders (Somali diaspora abroad and in Kenya), including money transfer operators, chambers of commerce, business associations (among diaspora and in Kenya), community leaders (abroad and Kenya), diaspora business entrepreneurs (diaspora and Kenya), diaspora investors, business owners, senders and recipients of remittances who have used these productively, etc.
FGDs with business owners in Dadaab (representatives from each identified business model), and then, with their help, snowballing towards the relevant diaspora informants abroad.

The number of KIIs and FGDs will depend on the number of business models that will be identified during the baseline mapping. The number of business models to further document through KIIs and FGDs will be determined jointly with DRC.

Informants should aim to include 50 % local stakeholders (Somali community members in Dadaab) and 50% diaspora stakeholders (Somali diaspora).

Deliverables

The Consultant will submit the following deliverables as mentioned below:

Inception report

For approval from DRC, before proceeding to subsequent deliverables

Baseline mapping (Max 10 pages)

Upon presentation of the baseline findings, the engagement models to be further described during next phase will be selected by the consultant and DRC in close coordination

Description of selected diaspora engagement models (Max 5 pages per model + transcripts from FGDs /KIIs illustrating the inner dynamics, challenges and best practices of each model)

Besides the detailed description of each engagement model, the transcripts (including contact details) will be valuable for subsequent engagement with stakeholders.

Outline of potential financial products – including a digital platform – to leverage small business investment from diaspora

As per relevant engagement models.

Preparation and holding of debriefing workshop for DRC

Final report presenting data, analysis, conclusions and recommendations for DRC Kenya programming. (Max. 10 pages)

Contents of the final report should be presented in a debriefing workshop before the report is written

Final presentation to DRC and potentially also to stakeholders

The documentation should be delivered through email.

Duration, Timeline, and Payment

The total expected duration to complete the assignment will be no more than 34 working days

The consultant shall be prepared to complete the assignment no later than 30 days after final data gathering

Proposed Composition of Team

Lead researcher

Eligibility, qualification, and experience required

Essential:

Extensive experience from research and documentation of private sector development – preferably in East Africa.
Track record of written publications on diaspora / private sector development / development / migration.
Experience in small business investment and an understanding of small business finance
Excellent analytical, interpersonal, communication and reporting skills.
Strong communication skills (oral and written) in English.

Desirable:

Experience from research and documentation of diaspora business engagement in private sector development.
Experience working with Somali communities.
A good understanding of Kenya’s cultural / economic context

Eligibility:

The consultant has the authorization to conduct research in Kenya

Qualification:

Relevant academic background. Post-graduate university degree in social sciences / business development or another relevant

Technical Supervision

The selected consultant will work under the supervision of:

Brenna Carmody, Head of Programme
Alistair Cowan, Regional Alternative Finance Coordinator

Location and Support

Address of the work assignment.

The Consultant will provide her/his own computer and mobile telephone. All relevant documents and literature will be given to the evaluators in soft copy once the evaluation begins.

DRC will cater for travel, accommodation and meals for the consultant.

Travel

The Consultant will travel from Nairobi to Garissa to conduct Key Informant Interviews and Focus Group Discussions with entrepreneurs, humanitarian, and development partners as well as Financial Service Providers in Dadaab.

Submission Process

Interested applicants who meet the required profile are invited to submit an expression of interest including:

A suitability statement including CV of participating consultants with details of qualifications, skills and experience.
Technical proposal that summarizes understanding of the TOR, methodology and tools to be used.
Work-plan indicating the activity schedule.
Financial proposal providing cost estimates and consultancy fees.
Two samples of similar previous assignments.
Contacts of three organizations that have recently contracted you to carry out a similar assignment.

Terms and Conditions

Applications must be in English.
The consultant has relevant equipment & tools for the assessment
The consultant shall not assign this contract or subcontract any portion of it without DRC’s prior written consent.
Any documentary materials that will be produced during this study belong to DRC, and the consultant may be allowed to keep a copy

Evaluation of Bids

Only those shortlisted will be contacted for an interview with the panel to ensure their understanding of the consultancy services.

consultant(s) provide examples of previous work carried out in this field of work especially in an urban refugee setting.

2. Technical approach (Weighted percentage – 50%)

a. The technical approach addresses the key aspects and deliverables of the ToR.

b. The strategy draws on sector good practice and is relevant to the task.

c. The technical approach will deliver the required outputs, within the deadlines.

Based on the initial screening, DRC Kenya will invite selected bidders for an interview

3. The financial offer will then be weighed against the technical proposal (cost/quality)

DRC Kenya will conduct reference checks from at least 2 previous works as an additional mandatory requirement before contracting.

The deadline for submitting the proposals is 24th May 2023 at 1700hrs EAT. Proposals must be submitted as word/PDF/excel files, ideally packaged in a zip folder. Proposals must be submitted to the following address tender.ken@drc.ngo with ‘Diaspora Investment Research’ in the subject line.

The term “Diaspora business actors” covers all types of diaspora engagement in local business – from financial support provided by diaspora to relatives for setting up businesses, over actual investment / involvement by diaspora business people in local businesses, to diaspora philanthropy in support of job creation for youth in the target area.

Please find complete bidding documents in the following link: RFP 00239490 PROVISION OF DIASPORA INVESTMENT RESEARCH CONSULTANCY

How to Apply

Bids can be submitted by email to the following dedicated, controlled, & secure email address: tender.ken@drc.ngo

When Bids are emailed, the following conditions shall be complied with:

The RFP number shall be inserted in the Subject Heading of the email
Separate emails shall be used for the ‘Financial Bid’ and ‘Technical Bid’, and the Subject Heading of the email shall indicate which type the email contains
- The financial bid shall only contain the financial bid form, Annex A.2
- The technical bid shall contain all other documents required by the tender, but excluding all pricing information
Bid documents required, shall be included as an attachment to the email in PDF, JPEG, TIF format, or the same type of files provided as a ZIP file. Documents in MS Word or excel formats, will result in the bid being disqualified.
Email attachments shall not exceed 4MB; otherwise, the bidder shall send his bid in multiple emails.

Failure to comply with the above may disqualify the Bid.

DRC is not responsible for the failure of the Internet, network, server, or any other hardware, or software, used by either the Bidder or DRC in the processing of emails.

DRC is not responsible for the non-receipt of Bids submitted by email as part of the e-Tendering process.

Bids to be submitted ONLY in electronically.