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Terms of Reference (ToR) KUSCCO CFF Business Plan

Terms of Reference (ToR)

KUSCCO CFF Business Plan

1    Project Background

Small and medium enterprises (SMEs) present enormous opportunities for financial growth but are often underserved with limited access to appropriate financial products and services. The major challenges facing lenders that want to engage in Agro-SMEs finance fall under two major categories; high costs of service delivery and risks inherent in agriculture.

SMEs on the other hand are faced with the challenges of limited skills, poor market access, lack of adequate financial statements and generally opaque operations among other factors.

The World Council of Credit Unions (WOCCU), in partnership with Kenya Union of Savings and Credit Cooperatives (KUSCCO) and her departments and subsidiaries, seeks to enhance SACCO investments in Agro-SMEs and the General SME sector through its multi-year, multi-country, USAID-funded, Cooperative Development Program (CDP).

The program focus over the last six years has been on agricultural lending where participating SACCOs were supported to implement agricultural lending best practices based on the viability of agricultural projects, household cash flows and overall risks in agricultural lending as opposed to lending based purely on collateral. During this period the program developed the Agricultural and Rural Finance Toolkit, an agricultural lending methodology combining product policy and procedure templates, analysis tools, SACCO staff training materials and agricultural value chain intervention guides. However, the extent of adoption of the new methodology by the SACCOs is unclear, and it would be helpful to understand better what worked and did not work in the process of developing, testing and rollout out the new methodology and any impact it has had.

To ensure sustainability, the program supported the creation of the Agribusiness Unit inside KUSCCO’s Central Finance Fund (CFF) department which has also developed into a projects management unit to carry on the work of disseminating best practices in agricultural lending and other likeminded programs. The toolkit provided the technical foundation on which the Agribusiness Unit developed three of its four SACCO – targeted products and services, namely;

⦁    Loan products development for agricultural lending
⦁    Training on agricultural lending best practices
⦁    Agricultural insurance
⦁    KUSCCO Kilimo Scheme

The program is currently (2018 – 2022) supporting SME through the Technology and Innovation for Financial Inclusion (TIFI) project in Kenya. This phase will focus on expanding financial access for SMEs across multiple sectors through SACCOs. Therefore, the need to broaden the KUSCCO CFF mandate to SME is rife. Hence, consolidating the CFF business unit as an SME lending unit with various subunits is important to increase CFF portfolio, promote cost-effective technology solutions, and attract impact investors.

⦁    Rationale

WOCCU seeks the services of a reputable financial institution management consultant with a deep understanding and experience in the financial services Sector and SME sector in Kenya, coupled with proven expertise in business planning and strategy, to develop a suitable business plan for KUSCCO CFF that will guide the creation of a vibrant and sustainable SME product for supporting SACCOs in the country, harmonize the various and current agricultural products in the CFF portfolio, analyze trends in the CFF portfolio over time, recommend cost-effective technology solutions, and develop a prospectus to attract impact investors. These activities should take into account the current socio-economic, demographic (youth and women), and public health challenges related to the COVID-19 pandemic.

Through KUSCCO CFF, WOCCU would like to strategically house its program body of knowledge and experiences for easy, on-demand access by SACCOs in the country. This will require the introduction of a sustainable business model for anchoring the SME lending methodologies under the KUSCCO CFF. Such a model will be informed by the current and planned business practices, structure and financial position of the Union; the current and future business needs of the SACCO fraternity; and the competitive environment in the financial services space, particularly of financial services to SACCOs and those offered by SACCOs to the SMEs. The business model and the accompanying business plan will set forth the necessary strategy, structure, operational capabilities, funding requirements, and possible means of financing and proposed financial model to ensure functionality and continuity with diminished support from WOCCU over the next three years.

Overall Objective

The overall objective of this assignment is to:
Develop a business plan for KUSCCO CFF to provide guidance on the structuring, operation and delivery of SME products and services. The plan will elaborate mechanisms to spark SACCO interest, increase incomes and introduce new revenue streams based on the highlighted economic sectors.

3.  Specific Objectives

The specific objectives of this assignment are:

⦁    To assess KUSCCO CFF current structure and performance as a SACCOs’ wholesale financial service provider
⦁    To analyze target SACCOs challenges in accessing capital from other financial service providers.
⦁    To address the risk mitigation factors and reduction of default rate.
⦁    To review liquidity management tools of CFF and the SACCOs to ensure they are adequate for a complex environment and facilitate agile decision-making.
⦁    To review the recent SME market and the competitive environment research by WOCCU Kenya to establish the interest, capacity and financing needs of SACCOs and examine the availability of products and services offered by entities like KUSCCO CFF in the SME sectors.
⦁    To study the critical sustainability and growth factors for similar entities offering advisory and wholesale financial services to financial institutions, and more specifically to SACCOs. This objective should encompass mapping KUSCCO CFF’s current business model to identify strengths such as competitive advantages and weaknesses including operational and funding gaps, while comparing this to the market standards in terms of competitiveness and viability of products.
⦁    To propose modifications to KUSCCO CFF’s business model that will bring the Agro-SMEs and the general SME products into profitability and ultimately lead to improved service delivery to SACCOs and SACCO members. These modifications could be in product terms, processes, financing, marketing strategy, supporting technologies and so forth. Proposed changes should be aligned to the needs of SACCOs, based on current best practices, informed by industry trends and must leverage KUSCCO’s branch network.
⦁    To formulate a cross selling strategy that promotes collaboration and ties the Agro-SMEs and general SME products and services to the business pipeline and implementation channels of similar or complementary services in other KUSCCO departments.
⦁    To propose the most effective and sustainable approach for anchoring WOCCU initiatives within KUSCCO that will inform future implementation mechanisms and delivery channels for program interventions.
⦁    To harmonize the various agricultural products in the CFF portfolio, analyze trends in the CFF portfolio over time, recommend cost-effective technology solutions, and develop a prospectus to attract impact investors.
⦁    To advise on any adaptations recommended in light of COVID-19 and other future environmental/natural shocks.

4.    Activities

In the implementation of this assignment, the consultant will carry out the following activities:
a)    Organize and conduct an inception meeting with KUSCCO CFF, other KUSCCO team members as advised and WOCCU to discuss the expectations of this assignment.
b)    Review related materials on previous studies and SME finance materials by WOCCU and KUSCCO, and other financial institutions.
c)    Assess the business environment within which KUSCCO CFF operates and analyze the competitive landscape and business opportunities for the department.
d)    Conduct a thorough analysis of KUSCCO CFF business model and its performance with continuous consultations with all stakeholders. This task will be conducted with special attention to the SME products and with consideration of the SME methodology to be proposed under the TIFI project.
e)    Report on the findings of the KUSCCO CFF assessment and other study activities.
f)    Develop a business plan for the department, with special attention to SME products and services, taking into account the objectives stated above.
g)    Facilitate a meeting with KUSCCO and WOCCU to discuss and review the draft business plan before it is finalized.
h)   Focus on cost of funds available for lending to the SACCOs for SMEs based on trend analysis of the portfolio quality by KUSCCO regions, and SME sectors.

5.    Deliverables/Outputs

a)    A technical and financial proposal in response to this request for proposals.
b)    An inception meeting to discuss the expectations of KUSCCO and WOCCU on this assignment.
c)    An inception report detailing the proposed implementation criteria for this assignment with input from KUSCCO and WOCCU.
d)    A report on the findings of the market research and assessment of KUSCCO CFF that will inform the development of a business plan.
e)    A business plan for KUSCCO CFF department inclusion of the Situational Analysis, Market Analysis, Growth strategy, Competitor analysis, Industry analysis, sales and Marketing strategy, Business development / partnership strategy, Product/technology strategy, Competitive strategy, Marketing plan, Financial plan, and Business processes and operations plan – including the best technology solutions.
f)    A stakeholders’ validation meeting to discuss the draft business plan before it is finalized.
g)    Final meeting to hand over the business plan document.

6.    Duration

The assignment is expected to take 75 calendar days after signing of the contract.

7.    Payment Modalities

The consultant will receive payment on completion of the following milestones.
a)    30% on presentation of the Inception Report.
b)    30% after completion, submission and acceptance of the draft financial business environment findings and KUSCCO CFF Assessment Report.
c)   40% after completion, submission and acceptance of the final KUSCCO CFF Business Plan.

8.    Application Procedure


Qualified and interested firms 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. and copy to This email address is being protected from spambots. You need JavaScript enabled to view it. not later than 17.00hrs, September 21, 2020. The application should contain the following:

a)    A technical proposal with brief description of no more than 5 pages of why the firm is the most suitable for the assignment, with details of the organization and previous work of a similar nature, that the organization has conducted. It should give a detailed clear methodology, on how the firm will approach and complete the assignment.

b)    The technical proposal should also contain personnel CVs, indicating education background/professional qualifications, past experiences, as well as the contact details (email and telephone number) of the Consultants to perform this contract. A detailed description of the Consultants’ experience should also be provided and at least three (3) professional references;

c)    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
⦁    Fee

9    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%.

a) The technical evaluation will include the following:
⦁    Fulfillment of all statutory obligations for businesses in Kenya (Valid KRA Pin, Tax Compliance Certificate) – 5%

b)    Firm’s experience in successfully conducting work of a similar nature and magnitude.
⦁    Education and experience of key staff assigned to this project – 15%
⦁    Extensive expertise, knowledge, and experience of the financial services market, SACCO sector in Kenya and intimate knowledge of the structure and operating mechanism of SACCO apex bodies – 25%
⦁    Extensive expertise and experience in market research, institutional assessment and business planning for institutions of a similar size and complexity – 25%
⦁    Overall Methodology – 30%

 The financial evaluation will include the following;
a)    The Firm’s experience in successfully conducting assignments of this magnitude – 50%
b)    Total proposed budget for the completion of this Study – 50%

10    General circumstances

a)    Obligations: The Consultant shall complete the assignment set out in these Terms of Reference for this contract with due diligence, efficiency and economy, in accordance with generally accepted professional techniques and practices. The Consultant must respect the impartiality and independence of WOCCU and in connection with this contract must neither seek nor accept instructions from anyone other than WOCCU. During the term of this contract the Consultant must refrain from any conduct that would adversely reflect on WOCCU and must not engage in any activity that is incompatible with the administrative instructions and policies and procedures of WOCCU. The Consultant must exercise the utmost discretion in all matters relating to this contract.
b)    Title rights: WOCCU shall be entitled to all property rights, including but not limited to patents, copyrights and trademarks, regarding material created by the Consultant which bears a direct relation to, or is made to perform, this contract.
c)   Penalties for underperformance: Payment of fees to the Consultant under this contract, including each installment, is subject to the Consultant’s full and complete performance of his or her obligations under this contract regarding such payment to WOCCU’s satisfaction, and WOCCU’s certification to that effect.
d)    Taxation: WOCCU accepts no liability for any taxes, duty or other contribution payable by the Consultant on payments made under this contract.

ISO 9001


We commit to consistently promote SACCOs through advocacy and provision of quality technical and financial products that exceed the members’ expectations.
We shall comply with the statutory requirements and actively pursue continuous improvement of the ISO 9001:2015 Quality Management System (QMS) processes, capabilities and effectiveness

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