Terms of Reference for Technical Assistance to the Somali Microfinance Association (SOMMA)

Request For Proposal: Terms of Reference for Technical Assistance to the Somali Microfinance Association (SOMMA)

Closing date: 13/05/2025

1.0  About AECF

The AECF, LLC (Africa Enterprise Challenge Fund) is a leading non-profit development organization that supports innovative enterprises in the agribusiness and renewable energy sectors. Its aim is to reduce rural poverty, promote climate-resilient communities, and create 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 enhance 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 33 million lives, and created over 35,000 direct jobs. The AECF is headquartered in Kenya and has offices in Côte d’Ivoire, Tanzania, Nigeria, South Sudan, Benin, and Somalia.

2.0 About the FIG Somalia programme

Funded by the European Union, FIG is a component of the Inclusive Local and Economic Development (ILED) programme, whose objective is to revitalize and expand the local economy with a focus on livelihood enhancement, job creation, and broad-based inclusive growth for Somali women, youth, and producers through:

• Designing and offering appropriate and sustainable financial products and services to clients through its partner Financial Institutions (FI) and ensuring that targeted clients grow and become more bankable.
• Catalyzing a sustainable increase in lending to economic actors in Somalia, esp. youth, women, and producers.
• Building the capacity of the partner financial institutions to increasingly provide appropriate financial services for a wider scope of customers living in urban centres, and rural and decentralized areas in Somalia.
• Building the capacity of targeted end clients to use the financing for business growth.

3.0 Background of the consultancy

The Somali Microfinance Association (SOMMA) was established with support from the EU-funded Finance for Inclusive Growth (FIG) Somalia programme. Its primary goal is to foster financial inclusion for poor households in Somalia. SOMMA comprises seven-member Microfinance Institutions and receives applications from additional MFIs interested in joining the association.

SOMMA requires technical assistance (TA) to expand its membership and collect membership commissions. This will enhance its operations and effectively serve its members and the poor communities in Somalia.

In this context, AECF seeks an expert consulting firm to conduct an institutional capacity gap assessment for SOMMA. The objective is to identify and address these gaps, enabling SOMMA to function more effectively. As a key player in promoting financial inclusion, SOMMA will support microfinance institutions across Somalia, which are critical for providing access to financial services in target communities. Therefore, strengthening SOMMA’s institutional capacity is essential for better serving its members and advancing the development of the microfinance sector in Somalia. This assignment’s primary objective is to thoroughly assess SOMMA’s institutional capacity and formulate strategies to enhance its operational, management, and service delivery capabilities. The objective is to prepare SOMMA to effectively support its member microfinance institutions and contribute to developing a resilient microfinance sector in Somalia.

4.0 Scope of the consultancy

The Africa Enterprise Challenge Fund (AECF) seeks to engage a highly qualified consulting firm with substantial expertise in the microfinance sector in Somalia. The firm selected should have a proven track record in conducting financial institution capacity gap analyses, developing staff training programmes, and formulating policies and guidelines. Additionally, the firm should have experience creating financing products for MFIs, banks, and associations.

• Conduct an institutional capacity gap assessment and evaluate SOMMA’s organisational structure, governance, and operational efficiency.
• Identify gaps and areas for improvement across administrative, financial, and programmatic functions.
• Review existing policies, procedures, and guidelines, and propose enhancements to align with international best practices.
• Develop and implement missing policies to support governance, financial management, risk management, and member engagement.
• Create a strategy to increase SOMMA’s membership to 16 microfinance institutions through outreach and promotional activities.
• Develop a member MFI engagement and retention plan to foster long-term relationships.
• Organize and facilitate exposure visits for SOMMA management (the CEO and the Board chairperson) to Kenya or Uganda to learn from established microfinance associations in the selected country.
• Conduct workshops and training sessions for SOMMA staff and management to build capacity based on the Gap assessment findings.
• Develop robust reporting mechanisms to track SOMMA’s activities and assess impact.
• Support the preparation of SOMMA’s inaugural Somalia Micro Finance Institution Annual Performance Report.
• Establish key performance indicators (KPIs) to monitor and evaluate SOMMA’s effectiveness.

5.0 Deliverables and timing

The assignment will span over six months. The following deliverables will be produced:

1. Inception report: A report confirming the assignment delivery methodology and updated work plan to be submitted within one week of the contract’s signature.
2. Report: A Comprehensive report detailing each milestone completed with evidence of the completed assignments to be submitted.
3. Final report: A report incorporating feedback from the AECF to be submitted within one week of receiving feedback on the draft report, with attachments of all developed policies, guidelines, annual reports, and training tools.

6.0 Qualifications

The consultancy firm/team must meet the following requirements:

• Possess significant experience (minimum of 5 years) in conducting similar assignments in Somalia’s financial sector, including institutional assessments, tailored training programmes, and policy developments of the financial sector institutions.
• Possess a comprehensive understanding of the Somali private financial sector, including in-depth knowledge of the Somali microfinance landscape, regulatory frameworks, market dynamics, and challenges faced by MFIs.
• Exhibit strong project management skills, including meeting deadlines and delivering high-quality outputs.
• Have excellent communication and facilitation skills to engage with SOMMA team members and stakeholders effectively.
• Strong skills in policy development and strategic planning.
• Expertise in training and capacity-building initiatives.
• Excellent reporting and documentation skills.
• Be independent and free from conflicts of interest that could compromise the objectivity of the assignment, ensuring the ability to conduct the task objectively and impartially without influence from relevant stakeholders.
• Be fully registered as a consultancy firm in Somalia. Preference will be given to consulting firms based in Somalia.
• Previous experience working with EU-funded similar programs is advantageous.
• Proven track record in organising and facilitating international exposure visits.

7.0 Proposal submission

1. Interested applicants should submit a full proposal as a response to the TOR.
2. CVs of all team members
3. A proposed methodology for the assignment
4. A proposed work plan with timelines and activity breakdown.
5. Technical and financial proposals must be submitted separately.

NOTE: THE TECHNICAL AND FINANCIAL OFFERS MUST BE SUBMITTED IN THE FORM OF TWO (2) SEPARATE DOCUMENTS. THE AMOUNTS IN THE FINANCIAL PROPOSAL MUST BE DENOMINATED IN USD.

8.0 Reporting

The consultancy firm/team will report to AECF, the FIG programme manager.

9.0 Evaluation Criteria

a) Mandatory Requirements:

1. Company profile.

2. Trading license, Certificate of incorporation, Certificate of Registration, and other statutory documents.

3. Valid Tax Compliance certificate (Applicable to firms).

4. Passport/National Identification of the lead consultant and key personnel (Applicable to independent consultants)

b) The AECF will form an evaluation committee, which may include employees of the businesses to be supported. The same standards of confidentiality will bind all members. The consultant should ensure 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 it to clarify their proposals. In such an event, the committee may consider such clarifications in evaluating proposals.

In deciding the final selection of a qualified bidder, the evaluation criteria will give the technical quality of the proposal a weighting of 70%. Only the financial proposal of those bidders who qualify technically will be opened. The financial proposal will be allocated a weighting of 30%, 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. Application

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

• Interested firms must submit their technical and financial proposal to aecfprocurement@aecfafrica.org by 13 May 2025, 5 pm EAT.

• The email’s subject should be ‘TERMS OF REFERENCE (TOR) FOR TECHNICAL ASSISTANCE TO THE SOMALI MICROFINANCE ASSOCIATION (SOMMA)‘. The AECF shall not be liable for not opening proposals submitted with a different subject or responding to questions that did not meet the deadline as indicated.
• All clarifications and or questions should be sent to aecfprocurement@aecfafrica.org by 5 May 2025, 5 pm EAT

11. Disclaimer

AECF reserves the right to determine the structure of the process, the 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.

Note: AECF does not charge an application fee to participate in the tender process and has not appointed agents or intermediaries to facilitate applications. Applicants are advised to contact the AECF Procurement Department directly.