Microfinance Investment Support Facility for Afghanistan (MISFA)
Access to Finance Project
Call for Proposals: Capacity Building Fund (B) Systems Strengthening Window
The Islamic Republic of Afghanistan has received grant from the International Development Association (IDA) for the Access to Finance Project. MISFA is responsible for implementation of a component of the project that aims at improving access to financial services for micro and small enterprises. In this connection, MISFA intends to apply the proceeds of the grant to support capacity building of financial institutions that provide financial services in Afghanistan. The support is provided under Capacity Building Fund has two windows: (A) Innovation Window and (B) Systems Strengthening Window. This call for proposals relates to (B) System Strengthening Window.
The main objective of the Systems Strengthening Window is to support efforts from Microfinance Institutions (MFIs) and Community Based Savings Promotion Institutions (CSPIs) to strengthen their systems and their human resources (MIS, internal control, risk management, etc.) based on a detailed capacity strengthening plan.
The following institutions registered under relevant laws of Islamic Republic of Afghanistan are eligible to apply:
- Microfinance Institutions (MFIs);
- Deposit Taking Microfinance Institutions (DMFIs);
- Community Saving Groups or Community based Saving Promotion Institutions (CSG/CSPIs);
- Credit Unions/Credit Cooperatives;
- Any other financial institutions with an explicit development mandate.
In addition to the criteria above, the applicant shall consider the followings when they submit their concept notes:
- The proposed budget shall not exceed the maximum amount of USD 500,000 or its equivalent in Afghani, but the proposed budget shall be submitted in Afghani currency only;
- The applicant should have at least three years relevant experience; and
- The Capacity Building Fund will not include on-lending funds.
- Selection Criteria:
The general selection criteria for eligible institutions include:
- Institutions shall be registered with the appropriate body under the relevant laws of the Islamic Republic of Afghanistan;
- Institutions’ overarching goals and/or proposed activity(ies) should have linkages with the overall objectives of the Access to Finance Project;
- Institutions shall demonstrate compliance with the laws and regulations of the Islamic Republic of Afghanistan; and
- Institutions shall not be engaged in illegal or illicit activities, including money-laundering or other criminal activity.
The selection criteria for MFIs/DMFIs/Credit Unions/Credit Cooperatives/Financial Institutions will also include:
- The registration and organizational purpose shall be to engage in developmental finance in Afghanistan.
- The financial institutions applying for capacity building grants shall comply with or show willingness to comply with MISFA’s performance standards.
- Institutions shall demonstrate positive trends towards operational self-sufficiency;
CSG/CSPIs should also:
- Demonstrate an adequate sustainability plan for their core business; or
- Present an exit strategy highlighting mechanisms for graduation and/or transfer of their clients/beneficiaries to other institutions/networks/programs at the end of their project.
- Eligible Activities:
Following is a list of activities considered eligible for funding:
- Strengthening institution’s governance structure.
- Development and improvement of institutional policies and procedures.
- Technical support in improving internal control, risk management, internal audit, and operating, financial, and human resource practices.
- Support to strengthen IT/MIS systems.
- Capacity building of employees.
- Technical assistance to help institutions’ transition to become DMFI
- Establishment of new development finance institutions.
- Other activities aimed at strengthening institutions’ capacity to improve access to financial services.
- Application and selection Process:
Interested applicants/institutions to receive the grant and who meet the eligibility criteria should submit their detailed proposals for one or more activities listed above, in the format provided in this Invitation for Proposals, through email or by person in sealed packets, clearly indicating their names to the address given below, not later than COB March 29, 2020.
Each applicant institution can submit in total five Proposals (for Innovation Window and Systems Strengthening Window).
The fund will finance consultancy services, incremental operating costs and goods (works not covered) to the institutions whose proposals have been accepted. Consultancy services and goods shall be procured in accordance with the Commercial Practices approved by the World Bank. A copy of the Guidance Note – Commercial Practices will be shared with the grantees when signing the agreement.
For further information and clarifications, please contact us through:
Mohammad Khalid Abid, Procurement Specialist
Microfinance Investment Support Facility for Afghanistan (MISFA)
House #195, Esmat Muslim Street, Shahr-e-Naw, Kabul-Afghanistan
Copy to: firstname.lastname@example.org & email@example.com
- Template for Detailed Proposal
Request for Proposal
PROPOSAL COVER PAGE
The Name of Applicant
Proposed Project Title (e.g. Establishment of Sharia Department for SME Loans etc)
Type of Funding requested (Under Strengthening or Innovation Window)
1. ORGANIZATIONAL DETAILS
1.1 INTRODCUTION AND COMPANY PROFILE
Please provide details as: complete name, contact details and address
1.2 PAST EXPERIENCE (maximum one page)
This may include the financial condition of the organization for the last three years including
· gross loan portfolio
· average loan size
· women borrowers
· active clients
· the total outstanding
· PAR product wise
· growth rate
· number of provinces under coverage
· write off
· # of branches etc.
Provide additional information if any, on the specific financial product that is considered under this grant.
In case of organizations other than MFIs, include information that entails their overall organizational achievements and specific achievements to the proposed project under this grant.
1.3 ORGANIZATIONAL CHART (maximum two pages)
Updated Organization Chart that should include;
· Number of departments and number of staff (e.g. Department of Risk Management (5), Head of Risk Management (1), Risk Management Officers (3), Office Assistant vacant (1))
Management Profile (brief summary of the SMT, maximum one page)
Name and Designation of key staff involved in the proposed project, their role (person leading, implementing, and person involved in monitoring)
1.4 FINANCIAL REPORT
Financial audited report/financial statement for last 2 years (please attach to the proposal)
1.5 AISA LICENSE
Updated AISA license (please attach to the proposal)
2. DESCRIPTION OF THE PROPOSED PROJECT
2.1 EXECUTIVE SUMMARY (maximum two pages)
The executive summary of the proposed project should include all of the below sections in separate paragraphs. It is recommended to develop this section at the very end.
· the current status of the organization in regards to the proposed activity (e.g., lack of SME department)
· why institution cannot resolve the gap
· proposed solution & implementation mechanism (e.g. hiring consultant, purchase of equipments etc) and duration of the proposed project
· how it helps the organization to achieve its objectives or what are the outcomes
· sustainability of the proposed project
· monitoring & evaluation mechanism
· allocated budget
2.2 CURRENT STATUS OF THE ORGANIZATION (maximum one page)
What is the current status of the current affairs of the organization in relation to the proposed project, it should provide adequate detail about the current status of the proposed project
· If the organization proposes strengthening the SME department, it should be accompanied by information such as:
o background of the activity, e.g. does the organization intend to create a new department for SME, if no, how long has the department been operating, the number of staff and client etc, and why does the organization need this specific project
o Identify the challenges/obstacles the organization is facing now, and this being the reason to propose SME project. The challenges/obstacles should be realistic
o explain how each of the problems identified is effecting the organization in terms of growth, outreach, profitability, innovation, management efficiency, internal control/compliance etc
2.3 USING OWN OR PARENT COMPANY RESOURCES (minimum two paragraphs)
Why the organization cannot resolve the gap using own or parent company resources?
Some reasons may be the following but please do not limit it to the following, and it is not ought to be similar for all proposed project:
· financial constraints
· limited number of human resources
· organization capacity to undertake this specific activity
2.4 PROPOSED SOLUTION AND IMPLMENTATION MECHANISM (maximum four pages)
Describe in detail the proposed solution and implementation mechanism, please keep in view the following points:
· The proposed solution should respond to the problem identified in the previous section (2.2).
· The proposed solution should be evidenced based, you may refer to some type of assessment, internal review, survey, management decision etc. We need to make sure that it is a consultative process within the organization rather than individual decision (if possible, add the reference as an annex)
· Mention the objectives and outcomes that are measureable and realistic (e.g. introduce new product to increase outreach in five provinces by 20 percent targeting SME businesses, improved monitoring systems through introduction of updated policy and 10 staff being trained for duration of 3 months etc)
· Mention each of the activities; and details of the activity under the proposed project, some of the examples are as following:
o Conduct survey/assessment: Why this activity is undertaken, and what is the organization intending to achieve at the end, some additional information on number of enumerators, duration, number of questionnaires to fill, the person who leads and manages it should also be included.
o Hire staff/local consultant: Is anyone currently undertaking these tasks or is it a new position. The main Functions of the proposed staff should be part of this section while the Terms of Reference (Introduction, Objective, Job Description, Key Deliverables if applicable, Skills & Qualifications as per NTA salary scale) should be added as Annex.
o International consultant: Why not local consultants; objective of the consultancy, duration and main deliverables as part of this section, while the detailed ToR be added as Annex (background and concise statement of objective, an outline of the tasks to be carried out, schedule for completion of tasks that should include each deliverable and timeline, data services and facilities to be provided by the client, final outputs i.e. reports that will be required of the consultant [For Lump Sum contracts Payment schedule has to be linked to the output], composition of review committee to monitor consultants work, procedure for review of the deliverables)
o Trainings: Training Needs Assessment should be conducted beforehand and based on the findings, the specific training courses can be proposed, along with capacity building methodologies (the current status and the intended outcomes from the training, it should be very specific).
§ In case of exposure visit, the titles, names (if possible) and departments should be mentioned.
§ If the organization lacks the capacity to conduct a comprehensive TNA, they may recommend it as part of the proposal through outsourcing it to a local firm.
· Capacity Building through Local/International consultant: The benefits of using international or national consultants should be maximized by including an element of capacity development for the relevant organization staff (counterpart) to enable expansion of knowledge and skills.
o A detailed plan should be developed to ensure transfer of skills and knowledge, when the contract is signed.
· Each of the activities should be reflected and linked to other parts of the proposal including the monitoring, budget etc
· The organization can only propose to support one function under each proposal for this grant (two different works such as hiring a consultant for SME product and purchase of IT equipments is not advised).
o One may add more than one activity under each function (e.g. feasibility study of SME environment in Afghanistan along with gap assessment of the organization and development of policy manual for the product).
o In this case, each activity under the function should have separate timeline, monitoring indicators, budget etc.
· Implementation mechanism should be clearly outlined, how the proposed project will be implemented (internally/externally), will it be outsourced or implemented using the institution’s existing resources.
2.5 WORK PLAN
Develop a Work Plan including clear benchmarks for the Proposed Activity.
· The work plan should consist of a list of all activities/tasks, timeline/duration, deliverable/output, the person/department responsible to lead and monitor (Gant chart is recommended)
· Each of the activities/tasks in the work plan should be briefly explained in 1-3 lines.
· The required procurement process/steps should be considered while defining timeline for purchase of goods or services.
2.6 OUTCOMES OF THE PROPOSED PROJECT(minimum two pages)
How the proposed project helps your organization to improve and achieve organizational objectives, the organization need to make sure that the following information is reflected in a measurable, clear and precise manner
· Adequate description on how the proposed activity will benefit the organization in the short and long run
· value addition of the proposed project to the organization
· Following execution of the proposed project, how challenges/obstacles identified in section 2.2 is resolved and what would be its effect/benefits to the organization (e.g. Increase in number of clients, increase efficiency, strong internal control etc)
2.7 ACTIVITY TIME LINE
The proposed activities under the proposal should be completed before June 30, 2021 latest, independently of any delay that may occur in the approval process.
Expenses occurred after this date are not eligible for reimbursement.
Projects with lengthy implementation period will be rejected and will not be considered under this funding.
A detailed implementation timeline should be attached to your proposal.
2.8 OTHER RELEVANT INFORMATION
Maximum of one page (include any other information that will support your proposal).
3. SUSTAINABILITY OF THE PROPOSED PROJECT & RISK ANALYSIS
3.1 FINANCIAL & PROGRAMMATIC SUSTAINABILITY (maximum one page)
Provide financial and programmatic sustainability of the proposed project and details to continuation of project activities and sustenance of project outcomes after the grant expires. The organizations may look into the following areas:
· assure that a steady flow of funds for maintaining and continuing the proposed activity is planned e.g. absorb the proposed staff into the organizational payroll,
· ensure that the important components/activities under the proposed activity will continue and not freeze e.g. the equipments will be properly maintained, the license of the software will be update, the survey/assessment will continue to enrich the organization
· international and national consultants should be accompanied by a counterpart to maximize element of capacity development transfer and expansion of knowledge and skills. A plan should be developed for the purpose later.
3.2 RISK ANALYSIS
Define, analyze and mitigate anticipated risks/obstacles to the proposed project that may be posed during the project cycle using the following template
NATURE OF RISK
Timely implementation of project
· Adhere strictly to work plan, through preparing monthly plan and follow up
· Monitoring and Supervision of the activities on monthly basis
· Report on progress to the SMT on monthly basis
Project Manager, M&E Dept
4. MONITORING AND EVALUATION
Develop list of key performance indicators as appropriate for the proposed project that is specific, measurable, achievable, realistic and time bound (SMART) along with the baseline and targets. This will be useful to measure the progress/achievement of the proposed activity.
The following two tables should carefully designed (key performance indicators, logical framework)
KEY PERFORMANCE INDICATORS
Establishment of SME Department (reduction of portfolio at risk, increase in outreach, growth)
Capacity building of Internal Audit Staff (enhancement in scope e.g., did not have the capacity to review the funding agreement or any specific function)
Capacity Building of Loan Officers (increase collection performance, decrease case load)
INDICATORS OF ACHIEVEMENT (verifiable)
MEANS OF VERIFICATION
Minimize/Prevent level of Duplicate Loans in order to improve the portfolio quality
Overall reduction in duplicate loans
Proposed Activity Evaluation Report
Macroeconomic situation remains constant
Prevention from duplicate borrowers and guarantors
Number of cases prevented from duplication
Branch Review Reports
Customer’s willingness (to register through device)
Coverage by biometric system
Build Capacity of the Staff
# of branches covered by biometric system
# of Biometric machines installed
# of borrowers and guarantors verified through this system
# of staff able to utilize the system
Branch Review Reports
Proposed Activity Progress Report
Training Plan & Reports
Procurement of Biometric Machines
Installation of biometric machines
Pilot test of the biometric machines
Training for the staff at different management level across departments
# of machines purchased and installed
Pilot Phase Assessment Report
# of staff trained for using this system
Availability of Vendors for supply of biometric devices
Proposed Activity progress is aligned to the Work plan
5. FINANCIAL DETAILS
The maximum budget amount is AFN 39,000,000 ($500,000), proposals with extra amount will be rejected.
Detailed budget along with break down for: goods, consultancy, admin & logistic, and any other cost (As per attached Ms Excel Sheet)
A realistic and well-thought-through cost estimate is essential in order to earmark budgetary resources. Following items needs to be considered:
· Separate budget sheet for each of the activity (e.g. equipments, consultancy, operations, trainings etc) and one summary budget sheet.
· Detailed budget line items including unit price, # of units, subtotal e.g. for a proposed training, one should add the # of days, # of participants, per-diem rate for each day and total, the unit cost for food etc.
· Lump sum budget is not acceptable for any budget line item (such as training Afs 1,000,000) but in rare cases if it is outsourcing to other firm.
· Summary Budget Sheet should be added to this section while the detailed budget sheets should be added to the annexure in Ms Excel Workbook.
· Each budget line item in same currency e.g. if the daily rate is calculated in AFN then the total should be in AFN as well.
· Budget shall be submitted in Afghani currency only
· Each budget line item should be explained briefly in a single or two lines in the narrative proposal
· Each of the budget line item should be reflected in the description of the proposed project and the monitoring and evaluation section.
· bases of estimation/budget in remarks
ANY COST SHARED BY THE APPLICANT