Terms of Reference
FEASIBILITY ANALYSIS AND MARKET SEGMENTATION FOR WATER FINANCING THROUGH SACCOs
1. Background
Kenya Union of Savings & Credit Co-operatives (KUSCCO) is the umbrella body of savings and credit cooperatives (SACCOS) in Kenya. It was registered in 1973 to advocate for a level environment in which SACCOs can operate in. Thus, KUSCCO is actively engaged in all advocacy issues affecting growth and development of SACCOs. KUSCCO fulfils its core function of advocacy, it provides various business services and products to SACCOs, which include training, and advisory work, risk and financing through its Central Finance Fund (CFF). CFF is the inter-lending facility for all SACCOs affiliated to KUSCCO Ltd and operates on the same principles as the SACCO Societies. It mobilizes funds within the SACCO Movement, extends the credit boundaries and accelerates the lending capacities of SACCOs. CFF domiciles all lending projects and partnerships within KUSCCO.
Aqua for All is a not-for-profit organization working towards facilitating access to clean water and good sanitation for all (SDG 6). Aqua for All plays a catalyst role by supporting innovations and enabling business solutions to become viable. Mobilizing public and private capital in support of SDG 6 is at the core of its program approach.
KUSCCO and in partnership with Aqua for All intend to co-develop a program to support SACCOs in Kenya to develop and roll out savings and credit products for Water and Sanitation sector. To enable the design of a programme, a feasibility and market analysis study is proposed to assess demand and interest of SACCOs to lend for water and sanitation purposes.
2. Consultancy Overview
KUSCCO and Aqua for All seek to develop Maji Nyumbani programme which aims to catalyze provision of micro-loans for drinking water assets and infrastructure at home through SACCOs in Kenya. In its implementation phase, the program will build capacities of select SACCOs with national reach to provide water financing solutions for both households and community-based water enterprises active in their locality. SACCOs will receive technical assistance from the program to develop water loan products that respond to the needs of their members and communities, activate demand through promotions and targeted incentives, and lend with own capital as proof of concept. The target for this program will be SACCO serving low income and vulnerable persons across the country.
3. Specific objectives
A. Feasibility Analysis
The study should focus on the following tasks and outcomes:
• Provide a brief analysis of water sector structure: institutions, regulations and actors and the role of National and County Governments, resulting in synthesis as an introduction to water and sanitation sector for KUSCCO and selected sacco’s as a general reference.
• Undertake market analysis and paid-for-water and sanitation services value chain in select rural areas of Kenya – with major input from the field. This will include mapping and segmentation of micro and small scale water & sanitation businesses, retail enterprises, and other suppliers of water / sanitation products and water services in the select rural markets. Sourcing and verification should also be done through verification among selected Sacco members and their clients through interviews.
• Assessment of select SACCOs interest to lend for water & sanitation. This will include identification of SACCOs with/without loan products for water/sanitation, assessment of demand for water/sanitation solutions from their Back Office (BOSA) members and Front Office Savings Activity (FOSA) micro clients.
• Analysis for potential risks, and capacity needs of select cohort of SACCOs keen to participate in the pilot loan programme. This shall include assessment of lending infrastructure, its Governance and financial strength, and its liquidity position to meet demand for water /sanitation loans.
• SACCOs with water /sanitation loan products; no, portfolio size, product terms and conditions, product performance
• Analysis of the ability and willingness of SACCO clients to pay the loans
• Clarify experience and track record of SACCOs to be selected
• Assess and describe the loan process that the SACCOs have in place
• Exploration of need for and design of incentive structures on water and sanitation products within the cooperative sector
• Assessment of viability of the programme – as designed, and recommendation to KUSCCO on scope of SACCO water investment needs, technical assistance requirements (TA) and risks, and risk-sharing plan proposed for the pilot SACCOs
B. Re-designing of KUSCCO Maji Nyumbani Project
• (Re)designing programme proposal with verification of proposed targets for the implementation phase
• Validation of the proposed project with target SACCO and stakeholders based on findings.
• identification of strategic private sector and sector partnerships programs
• Elaboration on how the product roll out should be done
4. Deliverables/Outputs
i. An inception report detailing the understanding of the TOR, proposed methodology and tools, work plan, and deliverables.
ii. A synthesis summary on the findings of the sector analysis,
iii. A more detailed report on the feasibility and market analysis work, including a profile of the clientele and the needs of sacco’s to lend for water and sanitation
iv. Suggested selection of at least 20-30 SACCOs to participate in the program
v. Description of the proposed implementation programme, incl. timeline and required budgets incl. suggested governance, incentive structure, partnerships etc.
Minimum criteria for SACCOs to be interviewed during feasibility phase
The consultant will develop a sampling criterion for respondent SACCOs in consultation with KUSCCO and Aqua for All. At minimum, target SACCOs should meet the below criteria:
• Must be a registered member of KUSCCO
• The SACCO must be willing to participate in the water and sanitation program by allocating resources and availing its staff for technical assistance.
• Must be a Deposit taking SACCO with a wide outreach of members across the counties
• The SACCO must have financial liquidity to on-lend to its members to acquire WASH products
5. Duration of the Assignment
The assignment will be for a period of maximum 4 months, commencing January 2022. The consultant must be available for regular update meetings with KUSCCO and Aqua for All.
6. Payment Modalities
The consultant will receive payment on completion of the following milestones.
• 30% on presentation of the Inception Report.
• 30% after completion, submission and acceptance of the draft final feasibility report.
• 40% after completion, submission, and acceptance of the feasibility report.
7. Application Procedure
Qualified and interested consultants are hereby requested to apply by submitting their proposals to:
This email address is being protected from spambots. You need JavaScript enabled to view it.. Contact person is Marlies Batterink, Aqua for All, The Netherlands. Not later than 17.00hrs, on Friday 21st January.
The application should contain the following:
• A technical proposal with brief description of no more than 3 pages of why the consultant is the most suitable for the assignment, with details of experience and previous work of a similar nature, that the consultant has conducted. It should give a clear methodology, on how the consultant will approach and complete the assignment.
• The technical proposal should also contain a CV(s), indicating education background/professional qualifications, past experiences, as well as the contact details (email and telephone number) of the Consultant(s) to perform this contract. Financial Proposal that indicates the all-inclusive fixed total
contract price, supported by a breakdown of all the costs. These costs should be broken down by no less than the following: Personnel (including rates and level of effort), Fringe (benefits), Travel, Meetings, Materials.
8. Evaluation criteria
The Consultant will be evaluated against a combination of technical and financial criteria (combined scoring method). Maximum score is 100% out of which technical criteria equals 70% and financial criteria equals 30%.
The technical evaluation will include the following:
i. Fulfillment of all statutory obligations for businesses in Kenya (Valid KRA Pin, Tax Compliance
Certificate, Business Permit)
ii. Consultants experience in successfully conducting work of a similar nature. iii. Education and experience of the consultant assigned to this project
iv. Extensive expertise, knowledge, and experience of the financial services market, financial inclusion for Base of Pyramid (BoP) target group, SACCO sector in Kenya and intimate knowledge of the structure and operating mechanism of SACCO apex bodies
v. Extensive expertise and experience in hands-on market research, targeting BoP customers, institutional assessment, and product development for SACCOs/or micro finance institutions– 25%. Understanding and experience of water and sanitation sector and household/MSME finance needs is a plus.
vi. Overall Methodology
The financial evaluation will include the following.
i. The Firm’s experience in successfully conducting assignments of this magnitude ii. Total proposed budget for the completion of this Study
More information through: Marlies Batterink – programme manager East Africa at Aqua for All
This email address is being protected from spambots. You need JavaScript enabled to view it.