Terms of Reference: 

Consultants for the elaboration of District SACCOs’ business planning, financial forecasting, and budgeting for licensing by the Central Bank 

1.  Background

German Sparkassenstiftung Eastern Africa (DSIK) is a German-based non-profit organization that is active in partnership projects in more than 50 countries worldwide. Among its key principles is the combination of local and international expertise to provide excellent technical advisory to its partner organizations. Among others, German Sparkassenstiftung works with the Ministry of Finance and Economic Planning (MINECOFIN). The partnership focusses mainly on the professionalization of the UMURENGE SACCOs, a sub-sector of the microfinance sector in Rwanda. In this aspect, German Sparkassenstiftung’s project activities are refinanced by the German Federal Ministry of Economic Cooperation and Development (BMZ).  

2.  Context 

As part of Rwanda’s long-term development plan, the aim of the Government of Rwanda is to transform the country into a high-income country and an economic trade, communication and financial hub by the year 2050. Towards achieving this, in 2008, a Saving and Credit Cooperative (SACCO) was established in each administrative sector (Umurenge), which means today there are 416 UMURENGE SACCOs (U-SACCOs) nationwide. The Umurenge (U-) SACCOs form a part of the National Savings Mobilization Strategy adopted for creating inclusive financial systems in Rwanda. All U-SACCOs are licensed as financial institutions and regulated by the National Bank of Rwanda (BNR). Each U-SACCO is an independent legal entity, with an average of six (6) employees. Currently, the U-SACCOs serve about 3.2 million members. However, the ability of U-SACCOs to meet their full potential is limited by several challenges including operations, management, capacity building, and accounting. 

To date, 63% of the U-SACCOs countrywide have started using an IT-based core banking software provided by the government, with the remaining SACCOs to be automated in the coming months. In addition to automation, interconnection of U-SACCOs can lead to improvements in service delivery, reporting, and governance through harmonized internal procedures, standardized operations, operational systems, policies and practices as well as audits. U-SACCOs’ interconnection can also improve financial capacity and reduce risks through pooled resources, widen the product range, and improve transparency. 

To tackle these issues, MINECOFIN is managing a project for USACCOs’ professionalization that covers the automation, consolidation, and the establishment of a Cooperative Bank. The expected results of U-SACCOs’ consolidation will be the formation of District SACCOs (DSACCOs) whereby all U-SACCOs of a district will be amalgamated into a D-SACCO. This nationwide merger of 416 U-SACCOs will result in 30 D-SACCOs, and each will have to apply for registration at Rwanda Cooperative Agency (RCA) and for a license from National Bank of Rwanda (BNR). 

In this respect and within the partnership activities with MINECOFIN, DSIK intends to recruit consultants to provide technical support in developing the 3 years’ business plan, financial forecasting and budgeting for four D-SACCOs. 

3.  Objective and scope of the mission

3.1  Objective of the mission

The consultant shall provide technical support to the UMURENGE SACCO consolidation project activities in collaboration with DSIK and MINECOFIN regarding business planning, financial forecasting, and budgeting; the key performance being the registration and the licensing of the amalgamated D-SACCO. This includes the consolidation of cleaned data of U-SACCOs of each district, the work on D-SACCO by-laws, business plan, financial forecasting and budgeting, the endorsement of key internal policies and procedures manuals aligned with the legal and regulatory framework in force as well as with international best practices in microfinance industry.

This assignment is divided into four lots. Therefore, each lot concerns the business planning, financial forecasting, and budgeting for licensing by BNR and registration with RCA activities for the amalgamated D-SACCOs in the districts listed below.

• Lot 1: GICUMBI
• Lot 2: RUBAVU
• Lot 3: RWAMAGANA
• Lot 4: NYAMAGABE

Thus, the ultimate objective of the work of the consultants under each lot is the preparation of a full application file for each D-SACCO complying with all registration and licensing requirements submitted to and approved by the Rwanda Cooperative Agency and the Central Bank, respectively. 

The consultant may submit a bid for single, multiple or for all the lots. The consultant is expected to clearly indicate which lots he/she is applying for in the letter of submission. This should also be reflected in the methodology. 

3.2  Scope of the mission

In general, the tasks listed below are expected to be accomplished by the consultants:

• Review the business plan concept note and templates that have been worked out by the MINECOFIN and DSIK project team, provide inputs and agree on the approach to be used;

• Review the due diligence results of each U-SACCO of the assigned district as a basis for financial consolidation of U-SACCOs into the D-SACCO;
• Consolidate cleaned U-SACCO financial data and information on district level (D-SACCO) as baseline for business planning including the endorsement of the net worth of each U-SACCO, the resulting nominal value of share in general and by separating the nominal value of share for members with full paid capital and members with partially paid capital; from the U-SACCO net worth, indicate the recapitalization need in case the capital adequacy ratio (CAR) is less than 15%; Basis will be the financial statements end of 2023 which the consultant need to compare with the financial statements per cut-off date. This validated data shall be used as the basis for consolidation and financial projections.
• Design and conduct SACCO workshops and work out a specific D-SACCO business plan including the financial forecast for three (3) years and a first financial budget following the D-SACCO’ s structure as agreed upon in the project team (see details in appendix 1); Endorse D-SACCO basic texts including by-laws, internal policies, and procedure manuals deemed necessary for the new D-SACCO to be formed and for their respective registration and licensing applications;
• Submit the complete file complying with the regulatory requirements for the registration of cooperatives by RCA to the D-SACCO for approval to the Project Management Team, and submit the validated version to RCA for approval;
• Submit the complete application file for the licensing to the D-SACCO for approval to the Project Management Team and the validated version to BNR for approval; Work out the final report of the mission, including all supporting documents.

4.  Deliverables

The minimum deliverables per lot are the following:

• Inception report including a detailed work plan and staff assignment plan
• Present comprehensive District-specific three (3) years’ business plan; validated by the Project Management Team and approved by representatives of the future D-SACCO;
• A complete application file for registration and licensing of the D-SACCO to RCA and to BNR respectively;
• Provide feedback and responses to comments, recommendations, or additional information from the BNR with regard to the D-SACCO application for license until the license certificate is issued for each applicant. In this regard, the concerned consultant will remain available for the monitoring of the registration and licensing application from its submission date to the date of the registration and licensing certificate issuance.
• Final report

5.  Profile

For this consultancy assignment, the Project Team is looking for consultants that fulfil the following requirements: 

• At least a bachelor’s degree in finance, accounting, economics, business administration. 
• Professional certificate in related topics, e.g. CPA, CFA, ACCA will be seen as an advantage;
• Experience of at least 5 years in the microfinance or banking sector at a senior position being involved in business planning, financial projections, and preparation of annual budgets.
• Skills in elaborating a project, feasibility study, business planning and financial forecasts of MFIs or other financial institutions (to be justified by at least three names of banks/MFIs for which the consultant has developed business plans);
• Skills in facilitating workshops on the consolidation/amalgamation/merger of financial institutions including SACCOs.
• Experience in conducting due diligence or audits of financial institutions will be of advantage.
• Being on BNR’s list of approved microfinance external auditors will be an added advantage.
• Familiarity with the Rwandan economic context and financial sector.
• Ability to communicate fluently both orally and in writing in English. Kinyarwanda and/or French are of advantage.
• Ready to conduct on-site visits and workshops with the SACCOs in the respective districts.

6.  Duration of the consultancy assignment 

The consultancy assignment is meant to produce all results specified in Section 3.2 and 4. for each lot.  

The duration for this assignment is a maximum of 40 consultant days per lot in a time frame of max. 3 months per lot. Those days can be spread between team members and are to be taken in line with the project progress, requirements and external factors (e.g., due date for license application). DSIK and MINECOFIN reserves the right to fix the start and end date of the assignment. 

7.  Remuneration and payment terms

The amount of remuneration and the terms of payment will be specified in the contract for the provision of services. 

The payment terms are listed below:

• An advance of 30%, upon request of the Consultant after signing the contract and providing the team inception report;
• 50% after business plan formulation and submission of a 3-years business plan.
• 20% after completion and approval of application file for D-SACCO submitted to RCA and BNR for registration and licensing respectively, updated application after feedback received, monitoring of application until license is issued, and presentation of the final report.

8.  How to apply

8.1  Submission of technical and financial offer

The consultant will submit the technical and financial offers as two (2) separate PDFs :

The 1st PDF will contain the technical offer consisting of the following elements:

• A signed letter of submission for the technical offer, including an indication of which lots the consultant is bidding for;
• A note on understanding the mission;
• The methodological approach, including a workplan per lot indicating how and when to reach the required deliverables;
• A draft table of contents for the business plan
• Indication of the forecasting tool to be used (please note: any related costs will be covered by the consultant);
• Detailed curricula vitae of all involved team members including the achievements in business planning in similar or specific fields; (max. 5 pages) as well as a staff assignment plan for each lot;
• References indicating experience elaborating three (3) business plans of financial institutions, preferably big MFIs/SACCOs, (MFIs/SACCOs with at least a total asset of 1 billion Rwandan Francs and with at least 5 branches).

The 2nd PDF will contain the financial offer composed of the following elements:

• A signed letter of submission for the financial offer;
• The consultant's fees based on the given consultant days considering the timing of the implementation of the mandate.
• Any other costs (to be detailed by the consultant).

The interested and qualified consultants are requested to submit the two soft copies (pdf) to the German Sparkassenstiftung Eastern Africa by email through the following email address: procurement.kigali@dsik.org by 2^nd February, latest 2pm local time. Any offer received after the deadline will not be reviewed.

8.2  Evaluation criteria

The selection of candidates will be performed in two stages.

Stage 1: will be based on the quality of the technical offer and on the financial offer presented by the consultant.

Each Lot will be evaluated separately. 

The technical offer will be evaluated based the following criteria: