BACKGROUND
Enterprise Partners (EP) is a 7-year (2013-2020) wealth creation programme which, inclusive of women and the environment, aims to support the private sector and Ethiopia’s economic growth. By applying the Making Markets Work for the Poor (M4P) approach for sustainable results, it aims to facilitate market development in order to spur innovation and investment that creates jobs and increases incomes for the poor. It does so with a combination of technical assistance and market facilitation in resolving market failures. EP is being implemented by a consortium led by DAI Europe, and includes First Consult, Enclude and ITAD.
Background specific to this assignment
The Government of Ethiopia (GoE), in cooperation with the World Bank Group, the European Investment Bank and the DFID-funded Enterprise Partners, is implementing the SME Finance Project aimed at enhancing access to finance opportunities for SMEs in Ethiopia. The Development Bank of Ethiopia (DBE) is the implementing agency for the $269 million credit facility aimed at supporting SMEs through leasing finance and working capital finance through DBE, commercial banks, microfinance institutions and lease finance companies.
The Ethiopia SME Finance Study (2014) represents the analytical background for the project. The study, conducted by the World Bank at the request of the GoE, looked at (the lack of) SME finance as one of the possible obstacles to job creation. The study has demonstrated the existence of a so-called “missing middle” phenomenon in Ethiopia, whereby small enterprises are more credit constrained than either micro or medium/large enterprises. The study also highlighted the inadequacies of Ethiopia’s financial sector to address the financing needs of SMEs, and the existence of severe limitations in the overall enabling environment for SME lending (e.g. the lack of a collateral registry). Moreover, it also highlighted the importance of lease finance as a complementary source of funding for boosting the Ethiopian economy by providing long-term finance to SMEs, which need funds to expand, but often do not have the credit history or collateral sufficient for credit from conventional financing sources.
The project has four components: Component 1: Financial services to SMEs; Component 2: Enabling environment for SME Finance; Component 3: Business Development Services to SMEs; Component 4: Project’s management, communication and impact evaluation.
Under component 1, the project provides participating financial intermediaries with a line of credit facility for the provision of leasing and working capital to eligible SMEs. This liquidity support is complemented with technical assistance (TA) aimed at supporting participating financial institution in designing, piloting, and rolling out financial products, utilizing innovative lending methodologies (i.e. cash flow based lending) to successfully expand their outreach to target SMEs.
DBE provides direct financing to SMEs, and wholesale finance to other financial intermediaries for on-lending to SMEs through two windows: a lease finance window and a lending/working capital window.
A TA facility is established to complement and reinforce the credit facility. In order to make the credit facility more effective, participating financing institutions will receive high-quality, tailored technical assistance. This capacity building will aim to develop the staff of participating financing institutions to serve SMEs adequately – training them in assessing SME business proposals and developing suitable financial products and lending methodologies for the target group. Participating financial institutions will assume full credit risk of lending to SMEs and are free to set pricing and loan conditions, including relevant policies and procedures, commensurate with their cost structure, capital base and risk profile.
In the lending window, MFIs and commercial banks were selected to participate in the programme.
The final project beneficiaries will be eligible SMEs operating in the manufacturing, agro-processing, tourism and construction industries. SMEs are defined in terms of number of employees (e.g. from 6 to 100 employees).Working capital loans to SMEs will be limited to a maximum of Birr 10 million per SME, while lease finance loans will be aligned with the DBE Lease Financing Policy requirements: i.e. a maximum lease loan size of Birr 30 million.
OBJECTIVE
The objective of the assignment is to ensure the quality of SME lending e-learning platform project deliverables against the set targets and best practices. The e-learning platform is aiming to transfer skills and knowledge, best practices on SME lending to a large number of MFIs/Banks staff on a sustainable basis.
SPECIFIC TASKS
Working Agreements
DELIVERABLE & TIMEFRAME
The assignment is expected to begin mid -August 2020 and completed by end of September 2020. The below proposed days per deliverables are indicative and could be revised in discussion with the consultant/expert and, but not exceeding the maximum of 10 days.
You can get full ToR document from the link below
TOR-SME Lending E-learning Platform Devt quality assurance advisor.for posting.docx
CONSULTANTS REQUIREMENT
The advisor should have the following experience: