Request for Proposal: Terms of reference for market research and product development of shariah-compliant products and services in Kakuma-Kalobeyei area – December 2024

1. The Africa Enterprise Challenge Fund

The AECF, LLC (Africa Enterprise Challenge Fund) is a leading non-profit development organisation that supports innovative enterprises in the agribusiness and renewable energy sectors with the aim of reducing rural poverty, promoting climate resilient communities, and creating jobs.

We catalyze the private sector by surfacing and commercializing new ideas, business models and technologies designed to increase agricultural productivity, improve farmer incomes, expand clean energy access, reduce greenhouse gas emissions, and improve resilience to the effects of climate change. We finance high risk businesses that struggle to access commercial funding; we are committed to working in frontier markets, fragile contexts, and high-risk economies where few mainstream financing institutions dare to go.

To date, we have supported over 510 businesses in 26 countries in Sub-Saharan Africa, impacted more than 33million lives and created over 35,000 direct jobs.

AECF is headquartered in Kenya and has offices in Côte d’Ivoire, Tanzania, Nigeria, South Sudan, Benin, and Somalia.

2. About Kakuma Kalobeyei Challenge Fund (KKCF)

Kakuma Kalobeyei Challenge Fund (KKCF) is a five-year Program of the International Finance Corporation (IFC), implemented with Africa Enterprise Challenge Fund (AECF), Turkana County Government, and UNHCR. KKCF originates from the market data from IFC’s “Kakuma as a Marketplace” study which quantified Kakuma’s economy and confirmed that it was a dynamic and potential market-place. This triggered a lot of interest that contributed to KKCF’s conceptualization and Program development.

KKCF is designed to support private sector investment and unlock the economic potential of refugees and their hosts in Kakuma Kalobeyei refugee hosting area in Turkana West District of Turkana County. KKCF aims to attract private companies and grow the local entrepreneurship potential to create job opportunities, present more consumption choices, and contribute to fair pricing of products and services. KKCF targets all sizes of companies from small to medium-size family businesses to social enterprises and large firms. For more information, visit https://kkcfke.org/

KKCF applies a competitive financing mechanism for disbursing donor funding to incentivize companies to start or scale existing operations in the Kakuma-Kalobeyei area. The process begins by advertising a call for proposals, applicants are then subjected to a competitive selection process leading to identification of companies that are best aligned to the Kakuma-Kalobeyei market dynamics to then deliver intended socio-economic impact to the host and refugee communities while also contributing to the development of Turkana County.

With the Kakuma-Kalobeyei area being a marginalized and fragile setting, KKCF supports these companies to manage business limitations prevalent in such challenging environments including limited access to financing, low availability of technically qualified and experienced staff, complex social and cultural conditions, slow and bureaucratic regulatory environment and fragmented, low income and remote markets with poor infrastructure. KKCF support includes provision of concessionally costed capital, technical assistance and policy advocacy to improve the business environment. This collaborative Program focuses on building commercially viable and sustainable businesses that can:

• Increase incomes for both refugees and host communities.
• Provide essential goods and services.
• Create jobs and stimulate economic growth.
• Improve living standards for those in the refugee camp and surrounding communities.

KKCF is currently working with 105 commercially viable and sustainable Micro enterprises and 19 Small and Medium Enterprises (SMEs) across diverse economic sectors. One of the 19 SMEs is a Sacco Societies Regulatory Authority (SASRA) deposit taking Savings and Credit Cooperative Society (SACCO). The SACCO has been in operation for an year and is looking to broaden its product offerings by developing Sharia-Compliant financial products tailored to the needs of the host and refugee community.

3. About the Assignment

3.1 Purpose of the assignment

AECF is seeking the services of a consultant/Consulting Firm to support the SACCO, to conduct market research to identify the financial needs and preferences of the Islamic segment in Kakuma-Kalobeyei, create prototype design, develop policies and procedures, pilot test and carry out an evaluation, refine the prototype design, support the roll out the product and provide financial products’ implementation oversight. The SACCO has a national membership of over 33,000 members nationally, 3,500 of whom have been enrolled from the Kakuma – Kalobeyei area.

The purpose of these terms is to define the scope, responsibilities, expectations, and deliverables of the engagement expected by AECF from the selected Consultant. The successful service providers must demonstrate experience and understanding of the refugee context and the Islamic banking/finance practices.

3.2 Specific duties and responsibilities (the “Services”) of the Consultant

The Consultant will be expected to deliver on the following scope of the assignment:

3.2.1     Market research

• Conduct a comprehensive market analysis of the Islamic segment in Kakuma including the potential target group and products already available at the market.
• Identify the financial needs, preferences, and Patterns of potential customers.
• Analyze the competitive landscape, including existing financial products and services tailored to the Islamic segment.
• Assess regulatory and compliance requirements for Islamic banking products.

3.2.2     Develop product prototypes

• One loan and one savings product, either newly developed or adapted from existing SACCO products that meet the identified needs of the target segment.
• Adapt the existing share capital contribution and rebate structure to Shariah-Compliance investment principles.
• Ensure products are Shariah-Compliant.
• Support the SACCO’s with relevant approvals and certification to offer Shariah-Compliant products.
• Develop the costing structure of the products.
• Develop sustainable/profitable strategies and risk management frameworks for the new products.

3.2.3     Develop P&P and training materials

• Develop the policies and procedures manual for the products including the necessary application and evaluation forms etc.
• Develop the training materials related to the products.
• Sensitizing and training of the SACCO management and selected investment officers identified for pilot testing.

3.2.4     Pilot testing

• Design and implement a pilot testing phase for the newly developed products.
• Develop testing protocols and metrics for assessing product performance and customer satisfaction.
• Rollout the pilot.

3.2.5     Evaluation of the pilot

• Collect and analyze data from the pilot phase to refine the products.
• Make the necessary adjustments to improve the prototype design.

3.2.6     Commercialization

• Provide guidance and support to investee during the implementation phase.
• Train SACCO staff on the new products and services to ensure they understand the features and benefits.
• Assist in developing marketing and promotional strategies for the new products and services.

3.2.7     Periodic Review

• Conduct periodic reviews to assess the performance of the products and the implementation process.
• Provide recommendations for improvements based on the reviews.
• Ensure continuous alignment with customer needs and market trends.

3.2.8     Reporting

• Provide regular progress reports.
• Present findings from market research, product development, and pilot testing phases.
• Make recommendations for product launch and further development based on pilot test results.

4. Deliverables

The Consultant/Consulting Firm is expected to deliver the following:

1. A comprehensive market research report detailing findings and insights on the demand and supply for the Islamic finance in Kakuma.
2. One loan product and one savings Shariah-Compliant product tailored to the needs of the target segment.
3. Policies and procedure manuals for the developed products.
4. Recruitment of qualified personnel and Certification of products / institution.
5. A piloting evaluation report detailing areas of improvement.
6. Refinement of the products following the pilot.
7. Final presentation to Sacco’s management team on the products developed.
8. Roll out of the Shariah-Compliant products.
9. Periodic review reports with recommendations for further product and process improvements.

5. Duration of the Assignment

The assignment is expected to commence in February 2025 and is expected to be completed in 6 months from the commencement date.

6. Reporting

The Consultant will report to the Senior Advisory Specialist at the AECF and KKCF Program Manager.

7. Proposal Submission

Interested and qualified consulting individuals or teams are invited to submit their proposal(s) comprising the following:

1. A technical proposal, max 10 pages (excluding annexes)

• An understanding of the consultancy requirements.
• Methodology and work plan for performing the assignment underpinned by a demonstration of value for money
• Detailed reference list indicating the scope and magnitude of similar assignments.
• Relevant services undertaken in the past five (5) years.
• Letters of reference from at least 3 previous companies/assignments
• Registration and other relevant statutory documents (this apply to Institutional consultants).

2. A financial proposal

• Clearly showing the proposed team member, roles, and proposed days and the proposed professional fee (daily rate and total amount per team member). The financial proposal shall also include an indication of reimbursables (travel, communication etc.). Currency to be in KES

N/B: Technical and Financial proposals be submitted separately. Combining the financial and technical document as one document will automatically disqualify the applicant.

 8. Qualifications and Experience

The Consultant/Consulting Firms should possess the following skills and/or credentials:

• Minimum of 5 years of experience in working with SACCOS and MSMEs in similar assignments for lead consultants.
• Extensive experience in market research
• Strong understanding of Shariah-Compliant financial principles.
• Proven track record of successfully developing and launching Islamic financial products.
• Experience in providing implementation oversight and staff training.
• Excellent analytical, communication, and reporting skills.
• Knowledge of the development sector and in particular working in the Kakuma/Kalobeyei area is an added advantage.
• Certification in Islamic finance.
• Advanced degree in related field will be a plus.

9. Evaluation Criteria

An evaluation committee will be formed by the AECF and may include employees of the businesses to be supported. All members will be bound by the same standards of confidentiality. The consultant should ensure that they fully respond to all criteria to be comprehensively evaluated.

The AECF may request and receive clarification from any consultant when evaluating a proposal. The evaluation committee may invite some or all the consultants to appear before the committee to clarify their proposals. In such an event, the evaluation committee may consider such clarifications in evaluating proposals.

In deciding the final selection of qualified bidder, the technical quality of the proposal will be given a weighting of 80% based on the evaluation criteria. Only the financial proposal of those bidders who qualify technically will be opened. The financial proposal will be allocated a weighting of 20% and the proposals will be ranked in terms of total points scored.

The mandatory and desirable criteria against which proposals will be evaluated are identified in the table below.

  10. Pricing

The AECF is obliged by the Kenyan tax authorities to withhold taxes on service contract fees as well as ensure that VAT, is charged where applicable. Applicants are advised to ensure that they have a clear understanding of their tax position with regards to provisions of Kenya tax legislation when developing their proposals.

11. Application Details

The AECF is an Equal Opportunity Employer. The AECF considers all interested candidates based on merit without regard to race, gender, colour, national origin, religion, sexual orientation, age, marital status, veteran status, disability, or any other characteristic protected by applicable law.

• Interested consultancy are requested to submit their technical and financial proposal to aecfprocurement@aecfafrica.org by 19^th December 2024, 5pm EAT
• All questions should be directed to the procurement email by 12^th December 2024, 5pm EAT.
• The subject of the email should be CONSULTANCY FOR MARKET RESEARCH AND PRODUCT DEVELOPMENT OF SHARIAH-COMPLIANT PRODUCTS AND SERVICES IN KAKUMA-KALOBEYEI AREA”. The AECF shall not be liable for not opening proposals that are submitted with a different subject or responding to questions that did not meet the deadline as indicated.

 12. Disclaimer

AECF reserves the right to determine the structure of the process, number of short-listed participants, the right to withdraw from the proposal process, the right to change this timetable at any time without notice and reserves the right to withdraw this tender at any time, without prior notice and without liability to compensate and/or reimburse any party.

The AECF does not charge an application fee for participation in the tendering process and has not appointed any agents or intermediaries to facilitate applications. Applicants are advised to reach out directly to the AECF Procurement Department.