Palladium is a global leader in the design, development and delivery of Positive Impact - the intentional creation of enduring social and economic value. We work with foundations, investors, governments, corporations, communities and civil society to formulate strategies and implement solutions that generate lasting social, environmental and financial benefits.
For the past 50 years, we have been making Positive Impact possible. With a team of more than 2,500 employees operating in 90 plus countries and a global network of more than 35,000 technical experts, Palladium has improved - and is committed to continuing to improve - economies, societies and most importantly, people’s lives.
Palladium is a child-safe organisation, and screens applicants for suitability to work with children. We also provide equal employment to all participants and employees without regard to race, color, religion, gender, age, disability, sexual orientation, veteran or marital status. The USAID Economic Competitiveness Project (Project) is a five year activity designed to increase El Salvador’s key economic sectors competitiveness by strengthening capacity of micro, small and medium enterprises (MSMEs) to compete in domestic and export markets, and improve the national and subnational business environment to encourage private sector investment, innovation, and business expansion to foster economic growth and job creation.
The Project approach to access to finance addresses the supply, demand, and enabling environment aspects of MSME finance simultaneously. Our approach is structured around (1) credit supply-side concerns,
(2) facilitating MSME credit demand,
(3) and incentivizing intermediation services and improving the enabling environment.
One of the main activities within the project is to engage BDSPs and private consultants under performance-based subcontracts to facilitate access to finance. The USAID Economic Competitiveness Project will provide assistance to targeted recipients in order to cater to the recipient’s needs. This calls for the availability of Financial Facilitators (FF) with proven track records in assisting MSME enterprises.
Financial Facilitators shall provide services to MSMEs including, but not limited to, USAID Economic Competitiveness Project client firms and partner financial institutions to stimulate financing and investment to MSME firms. Services under this scope of work may include, but are not limited to the following:
1. Arrange credit and other investments from Financial Intermediaries (FIs) and/or of investment funds for MSMEs firms approved by the Project.
The financial facilitation may include but is not limited to:
a. Identification of financial institution (s) potentially interested in financing targeted MSMEs;
b. Development of MSME client engagement letters and presentation of these to the Project for approval
c. Business plan development (when applicable) and activation of loan or equity application processes on behalf of a
MSME or the Project client firm within the MSME sector;
d. Preparation and submission of proposals to each FI attracted to MSMEs and the Project client firm within the MSME
sector;
e. Arranging meetings with the Credit Officers/Credit Committees, and negotiate loan terms with the FIs;
f. Following through to obtain the FI’s Terms Sheets and ensure advancement of credit and/or equity to the client MSME.
g. Link Project client firms to private/equity- quasi equity investors and facilitate any negotiation of equity investment /
quasi equity into client firm’s enterprise on their behalf. (Debentures convertible into shares and other acquisition stake options to be explored by FF provider and accepted by grant recipient).
2. Debt Restructuring, which may include but is not limited to:
a. Conducting a situational analysis by engaging the MSME firm or the Pojrect client firm within the MSME sector, in a
dialogue about a delinquent loan.
b. Present the agreed structure outlining the financial difficulties of the client firm and obtain a possible solution with the FI.
c. Negotiate new loan servicing terms that is fair, reasonable, and acceptable by the MSME firm or the Project client firm within the MSME sector.
d. Facilitate access to other financial products such as inventory credit and warehouse receipts financing and interface
between the FI advancing the inventory credit and negotiating a fair and reasonable deal that is acceptable by the client firm.
3. Assessment of the internal management systems of the Project client firms to identify gaps for capacity building.
Identification of capacity building needs for financial institutions or the Finance Facilitator itself, needed for transactions to
take place. This capacity building may be provided by the Project.
III. DELIVERABLES
1. MSME Firm Approval
The Finance Facilitator shall be required to submit a client engagement letter signed by the FF and the MSME firm it wishes to support for approval by Chief of Party (COP) or the DCOP, prior to engaging in any service delivery (including follow on services) as described above.
This client engagement letter shall include the following:
* Name and description of the MSME firm;
* The economic sector to be supported;
* The proposed technical assistance to be provided (if applicable);
* The proposed timeline of assistance; and
* The estimated size, type of financing, and the details of the arrangement for MSME payment to Financial Facilitators (amounts, form of payment and timeline for payment).
Requests will be evaluated and returned to the Finance Facilitator with a decision for support within seven (7) working days of receipt.
The Project strongly encourages and welcomes the facilitation of financing for women-led MSMEs, or to MSMEs that will be able to employ more women once they receive financing. Furthermore, each potential engagement will be screened for potential environmental issues.
2. Reporting/Results
The Finance Facilitator shall submit the below three (3) deliverables for each approved MSME firm assisted:
1. Work plan to secure the financing: The work plan should be developed in consultation with the client firm and in a format which is agreed to by the Project.
2. Loan application(s)/or equivalent submitted to financial institution(s): The Finance Facilitator must demonstrate that fully completed loan applications (or other document agreed to in writing by the Project) to formally request credit or investment from a Financial Institution (FI) has been submitted and received by the FI.
This could include:
* A letter of “acknowledgement of receipt” or evidence of an email from a FI that states the FI has received the following documents:
- The company’s business plan;
- Loan application form;
- The required supporting documentation;
- Proposal for short, medium, or long term credit; and
- Historical and/or proforma financial statements.
* A statement indicating all information required from the Project client firm has been submitted by the Finance Facilitator to the FI. The Project, at its discretion, may require further documentation of a particular transaction before certifying this deliverable.
3. Disbursement of Credit or Investment Capital:
The Finance Facilitator must demonstrate successful completion of a
financing deal through disbursement of an initial loan amount or investment capital infusion. Proof of disbursement in the
form of a written attestation from the FI or financier must be provided to the Project before this deliverable can be considered complete. The Project, at its discretion, may require further documentation of a particular transaction before certifying this deliverable.
All deliverables and any other documentation shall be submitted to David Huezo, Expanded Access to Financing for MSMEs Manager.
3. Progress Reports
The Finance Facilitator will be required to submit progress reports on a quarterly basis, updating the Project staff on the
status of each financing/investment deal underway.
These reports shall be submitted in a format to be agreed upon. Information should include:
a. Name of organization/client
b. Overview of accomplishments such as:
* Name (s) of FI (s) providing the debt or equity credit to the client
* Value of loan or investment obtained for client
* Interest rate
* Price per share
* Grace period (if any)
* Location of loan recipient
* Total value of fees paid to FF broken down by source
* Repayment of loan(s)
* Any other relevant indicators requested
As part of the FF’s commitment to working with the Project, the Finance Facilitator agrees to be a part of organizational capacity building assessments as required by the project. The Finance Facilitator shall also participate (as required) in networking and lessons learned activities.
The Finance Facilitator will be required to provide information on finance success stories to the Project communications team.
IV. MILESTONES AND PAYMENT
Fees for services can be billed upon successful completion of deliverables specified above for each client engagement. At
the Finance Facilitator’s discretion, a supplemental fee may be negotiated separately with individual clients. Such
supplemental fees must be fully disclosed to the Project in reports to COP and/or DCOP.
The Finance Facilitator will be solely responsible for collection of supplemental fees from client firms for its services. Fixed fees itemized in the schedule below are considered to be inclusive of all labor and expenses including travel and profit.
Payment schedule for approved MSME assignments will be set as follows:
The Project anticipates that the Finance Facilitator might provide a follow-on loan services to existing clients, thus the size of payment to FFs for each subsequent loan or investment of a similar nature to the same MSME will be as follows:
* Second loan of a similar type will be reimbursed 50% of the initial fee schedule
* Third loan of a similar type will be reimbursed 25% of the initial fee schedule.
Subsequent loans/investments following the initial 3 loans will be the sole responsibility of the Finance Facilitator and the Project will not pay any additional fees or reimbursement to the Finance Facilitator.
The Finance Facilitator will be responsible for all the logistics and operational costs related to the organization of the activities specified in this Subcontract.
The Finance Facilitator will be required to present an invoice requesting payment for a completed deliverable along with the supporting documentation described in Section III. Payment to the Finance Facilitator shall be made within 30 calendar days days after approval and confirmation of deliverables and receipt of invoice.
The structure of the client firm contribution is negotiated between the Finance Facilitator and the client in the aforementioned client engagement letter. The negotiation of the terms of the engagement are between the Finance Facilitator and the client firm. The Finance Facilitator shall disclose the terms of the engagement to the Project by providing a copy of the engagement letter.
The Finance Facilitator is solely responsible for collection of fees from client firms for its services. The Project is under no obligation to cover the client firm fee balance, if any. The Finance Facilitator can negotiate with the client firm that their fee will be deducted from the bank loan and paid directly to the Finance Facilitator by a bank.
Professional experience:
* Minimum 5 years of successful experience performing consulting services for companies in areas such as:i. Securing financing from banks and other financial institutions; ii. Market development strategy / financial planning for exporting companies;
iii. Business plans;
iv. Debt Restructuring;
v. New Ventures/diversification of products/markets;
vi. Financial institutions that provide financing to the MSME sector; or
vii. Entities (BDSPs) that support the MSME sector.
Academic background:
* Degree in Business Administration/Economics/Finance/Engineering. MBA is desirable.
Proven strong skill set in financial advisory services:
* Financial and management assessment of companies.
* Strategy & Business Plans preparation and implementation
* Identify company´s financing needs; prepare, present and successfully secure approval in financial institutions.
* Value/Supply chains: analysis of funding requirements and securing financing for the participants.
REPORTING
The Finance Facilitator will report directly to David Huezo, Expanded Access to Financing for MSMEs Manager
The Economic Competitiveness Project (ECP) is a five-year USAID-funded project that will strengthen the capacities of micro, small and medium enterprises (MSMEs) and improve the business enabling environment to increase the country's competitiveness in key economic sectors, expanding domestic and export market competition. The ECP mission aims to benefit 12,000 MSMEs, underscoring its focus to marginalized groups leading and owning MSMEs. The Project will foster job creation and economic growth by encouraging partnership with private sector, national and subnational governments, universities, civil society organizations, and technical/vocational institutes.
