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Request for Proposals for Analysis of the Agribusiness Financial Services Market system and Proposed Agribusiness Financing Interventions

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AFR began its operations in 2010 with the core objective of stimulating the development of the financial sector in Rwanda.

Advert for Analysis of the Agribusiness financial services market system and proposed Agribusiness financing interventions

1.   Background

1.1.About Access to Finance Rwanda (AFR)

Access to Finance Rwanda (AFR) is a Rwandan not for profit organization established in March 2010 by the governments of the United Kingdom (UK) and Rwanda with support from the UK Foreign, Commonwealth and Development Office (FCDO). Current (2021) funders of AFR include FCDO, SIDA (Sweden), the MasterCard Foundation, and Jersey Overseas Aid (JOA).

AFR’s strategic focus is to facilitate financial sector development by partnering with financial service providers (FSPs) and other public and private stakeholders to increase access to and use of quality financial services by low-income populations and to support Rwanda’s economic growth and promote innovations and learning that result in sustainable expansion of the financial sector. AFR identifies constraints that prevent the financial sector from serving Rwanda’s low-income population and identifies opportunities to intervene to improve access to and use of financial services by the rural poor, women, youth and MSMEs.

In particular, AFR is committed to ensuring women benefit equally to men in all that it does. Women’s economic participation helps drive inclusive and sustainable economic growth at a national level and reduce poverty within communities and households. Societies that make better use of the skills, talents and time of all members will more likely prosper. Women are often more likely than men to use income to support development outcomes within their families. Increasing women’s earnings can strengthen their hand in decision-making in their households.

AFR recognizes that effective programmes need to proactively support economic empowerment of women; assuming that market systems and/or efforts to facilitate change in market systems are ‘gender neutral’ is not sufficient. To successfully close the ongoing gender gap and increase women’s financial inclusion and participation in the economy, it is necessary to intervene in a gender intentional manner if Women’s Economic Empowerment (WEE) is to be achieved. Consequently, AFR aims to facilitate the following five elements of WEE throughout the programme cycle (Jones, 2016):

  1. Economic advancement – increased income and return on labour
  2. Access to opportunities and life chances such as skills development or job openings
  3. Access to assets, services and needed supports to advance economically
  4. Decision-making authority in different spheres including household finances
  5. Manageable workloads for women

These five elements fall under two categories – access and agency. Considering both enable us to differentiate between what is or could be available to women (access), and the socio-cultural dimensions that may deter women from taking advantage of opportunities (agency). AFR aims to increase women’s access as well as agency in all its interventions.

AFR is guided by the Market System’s Development (MSD) approach which recognises that efforts to increase financial inclusion and financial sector development must be led by market system actors for change to be sustainable. AFR supports the Government of Rwanda’s development objectives by aligning its interventions to the national policy frameworks including the Financial Sector Development Programme, and the National Strategy for Transformation (NST) 2017-2024.

1.2. About the Agribusiness Sector in Rwanda

The agriculture sector is a major source of income and growth for Rwanda; it accounts for close to 70 percent of employment, more than 30 percent of Gross Domestic Product (GDP), and more than 50 percent of exports. Considerable government effort has been devoted to developing the sector.

The growth of agriculture in Rwanda has been highly dependent on a structured system where cooperative societies are used to train farmers and provide a ready market. The success of the agricultural sector in Rwanda has been heavily reliant on companies that have made it possible for farmers to ready their produce for the market e.g.: tea factories, coffee exporters, oil producers, maize processing plants, cassava processing plants, etc.

Furthermore, according to a study by the Food and Agricultural Organization (2010), if women had the same access to productive resources as men, they could increase yields on their farms by 20- 30 percent. This could raise total agricultural output in developing countries by 2.5-4 percent, which could in turn reduce the number of hungry people in the world by 12-17 percent.

Development of the agribusiness sector requires investments to improve on-farm productivity, post-harvest practices, agro-processing, and trade and marketing of agricultural commodities. In Rwanda, some banks and other financial institutions have made attempts to finance agribusinesses with limited success. It is evident based on past performance; the financial sector lacks the incentives and capacities to target and serve agribusinesses leading to severe financing constraints resulting in limited agro-processing and thus competitiveness in the market.

AFR has made a strong commitment to continue efforts aimed at sustainably unlocking agribusiness finance, building on achievements made in AFR’s first two Phases (2011-2021). AFR has identified the agribusiness sector as a key sector to contribute to economic growth, enhanced incomes and job creation. However, this can only happen if appropriate financing is provided. Current investment levels are low, in part because the sector is perceived as risky and yielding unattractive returns. Traditional and innovative sources of financing at the enterprise level as well as mobilization of large-scale resources for commercial agro-processing, will be a key contributor to agribusiness development in Rwanda.

In order to effectively support financial services and capital investment in the agribusiness sector, AFR requires a deep understanding of the sector including financing constraints on the demand- and supply-sides, the policy, legal, and regulatory constraints, and the availability and appropriateness of supporting functions.

It is against this background that AFR is seeking the services of an experienced firm/consultant to conduct a market system analysis of the agriculture financing sector. From this assessment, AFR is looking for recommendations on how it could best intervene to increase access, uptake and use of financial services for agribusinesses.

2.   Objectives of the consultancy

3.   Scope of work

How to Apply

All interested and qualified firms should submit their proposals (both Technical and Financial) separately, marked with clear subject line: “Analysis of the Agribusiness financial services market system and proposed Agribusiness financing interventions to; not later than Monday 9th August 2021 at 05:00 pm Central African Time (CAT).

KEY NOTE: Follow this link to the AFR website detailed information on this advertisement.