Scope of Work:
A complete MSME Operation will be expected to support loan origination, including Operation, project documentation, manuals and training materials.
The aim of this project is to provide recommendations on improving access to finance to MSME owned. It will study the available financing sources (formal and informal) as per needs of MSMEs and recommend financial solutions. However, the main focus will be determining the formal financing solutions for MSMEs. It will also assist Azizi Bank in establishing a dedicated MSME Unit, designing specific products as per needs of these MSMEs and developing the policies and procedural manuals. While doing so, the consultant will survey the existing financial products available through surveys, focus groups, workshops, etc. It will highlight the reasons of a product’s success or its failure (as deemed appropriate). It will ultimately contribute to enhancing the ability of MSME entrepreneurs to pursue economic opportunities and to grow their businesses. It is clearly understood that if MSME Customer cannot access financial resources, they are at disadvantage in comparison to corporate entrepreneurs. For the purpose, the hired consultant will do a diagnostic survey in Afghanistan. Moreover, the consultant will also give an overview of international best practices and share success stories of jurisdictions where MSME financing has been enhanced. It will also do the stock taking of the current initiatives taken by various organizations in Afghanistan to improve financing to small and medium entrepreneurs.
The consultant should provide a proper Implementation Plan of their proposed recommendations along with schedule and cost estimate.
Following are the key deliverables of the consultant:
· Conducting a diagnostic survey on SME access to finance.
· Action plan with timelines and sequence of actions/ roadmaps prioritized with cost estimates and responsible authorities. Also, a mechanism to monitor the progress of the plan will be needed
· Establishing dedicated MSME Unit
· Assisting bank to design and develop products as per specific financing needs of MSMEs.
· The comparison may be made with other economies of comparable scale and nature.
· The report should seek to fully understand the barriers for MSE in use of deposit, loan, payment and insurance products. These barriers can be classified into demand side, supply side and legal & regulatory barriers.
· The report should also recommend appropriate product design features that can be helpful in overcoming these barriers.
· List of essential trainings with reasons and justifications why the proposed trainings/ awareness campaigns are important. Some of such training may include non-financial advisory services (business plan development, feasibilities, filing tax return, product branding, product packing, etc). one Master Trainer should also be developed.
· Drafting of mechanism for Proper targeting of MSME entrepreneurs with growth potential and identification of relevant programs.
· Establishment of full MSME credit management system, including application workflow and decision making mechanism.
· Establishment of MSME scoring model, MSME loan assessment procedures, monitoring and recovery mechanism.
· Implementation Plan to execute the proposed activities as mentioned in report
· Financial requirements to execute the plan