Palladium is a global leader in the design, development and delivery of Positive Impact - the intentional creation of enduring social and economic value. We work with foundations, investors, governments, corporations, communities and civil society to formulate strategies and implement solutions that generate lasting social, environmental and financial benefits.
For the past 50 years, we have been making Positive Impact possible. With a team of more than 2,500 employees operating in 90 plus countries and a global network of more than 35,000 technical experts, Palladium has improved - and is committed to continuing to improve - economies, societies and most importantly, people's lives.
Palladium is a child-safe organisation, and screens applicants for suitability to work with children. We also provide equal employment to all participants and employees without regard to race, color, religion, gender, age, disability, sexual orientation, veteran or marital status.
Project Overview and Role
The Feed the Future Kenya Investment Mechanism (KIM) is a five-year (2018-2023) project that will unlock significant finance and investment to key agricultural value chains (VCs) and the clean energy sector by addressing supply-side, demand-side, and enabling environment-related constraints to investment. By mobilizing substantial capital from the public and private sectors and building partnerships between stakeholders in the financial ecosystem, KIM will contribute to USAID's overall goal of fostering broad-based, sustained, and inclusive economic growth in Kenya.
The project aims to address the two principal market failures that have constrained investors from providing capital to certain segments of the clean energy and agriculture sectors: (1) insufficient quality consulting services (financial, transaction advisory, strategy, and business performance) for agribusiness and clean energy small and medium enterprises (SMEs) and (2) limited scalability of financial products tailored to agriculture and clean energy. To address these market failures, KIM will: (1) create a sustainable, market-based ecosystem for finance and investment by providing smart incentives to business advisory service providers (BASPs) and Financial Institutions (FIs); and (2) implement a partnership-based operating model. KIM will establish a diverse range of sustainable partnerships--with and among strategic lead firms, FIs, government counterparts, SMEs, and development partners--which will be critical to (a) scaling and replicating creative approaches to unlock financing, (b) testing innovative business models, and (c) reducing perceived and real risks of financing SMEs in the agriculture and clean energy sectors.
KIM is designed to mobilize capital for SMEs in the clean energy sector and agribusinesses in the horticulture, dairy, and livestock VCs. By the end of the project, KIM interventions must yield 25 strategic partnerships, 1,600 transactions closed by BASPs and FIs, and $400M in finance and investment leveraged from FIs at an average transaction size of $250,000. KIM will create a more competitive financial services environment for agriculture and clean energy, by building the capacity of FIs to package financing projects in the target sectors, stimulating portfolio expansion through pay-for-performance (P4P) approaches, and assisting FIs to reinvigorate their Development Credit Authority (DCA) programs to significantly expand utilization of this key risk-mitigation tool. A key Year 1 task in support of this effort is to conduct a rapid FI mapping exercise to identify promising FI partners and determine capacity building priorities for these FIs, socialize FIs to the P4P concept, identify critical success factors and barriers to increased DCA usage, and establish baseline information on lending and DCA utilization rates.
Musoni Microfinance was founded in 2010 and is the first MFI to be 100% mobile and leverages innovative technology to provide financial services to micro-entrepreneurs and small-holder farmers in Kenya. The mission is "to grow, build, and maximize the potential of the businesses of the low-income and under-banked of Kenya through the provision of affordable, flexible, and customer-orientated financial services". Musoni Microfinance delivers financial services that bring financial and social impact to its clients through three core financial products in Group Lending, Individual, and Agricultural loans. They have since 2010 disbursed over 280,000 loans, worth $92 million across 30 locations in 12 counties of Kenya. Over 60% of the group loan farmer clients are women, who are directly targeted through localized marketing campaigns that are deliberately executed in areas with a higher population of women (rural, market places, churches). To date, Musoni has financed and trained over 78,000 clients with 32% being smallholder farmers. Musoni has one of the best quality loan book in the market with an average PAR 1 and PAR 30 of 6% and 3.5% respectively.
Despite the many opportunities and potential in value chain financing, Musoni has mainly focused on financing "crop production"- through input and land preparation finance. However, smallholder farmers also require financing to invest in post-harvest practices that can reduce food losses, improve the quality of products, and add value to the crops produced via processing. Furthermore, as the effects of climate change grow, smallholder farmers have to increasingly invest in sustainable production systems and climate adaptation technologies. Musoni is therefore keen to provide new financial products that target other value chain actors and respond to the other financial needs of the existing agriculture clients. Musoni intends to to expand the agri-finance services offered under its Kilimo Booster product in the next five years, This will be achieved through the expansion of Kilimo Booster to include innovative leasing and collateral securitization products.
Kenya Investment Mechanism, KIM intends to hire a short term consultant who will support Musoni Microfinance Ltd to review the Kilimo Booster product to include warehouse receipts and innovative collateralized lending mechanisms which provides opportunities to expand the levels of post-harvest financing being provided to farmers and/or processors, and other agribusinesses.
The short-term consultant will be responsible for the following:
METHODOLOGY AND ACTIVITIES
- Market Research: The consultant and Musoni will select a sample of agriculture value chains and conduct market research to develop a better understanding of the specific supply chains and their economics, identify key agribusinesses and their clients/suppliers and map opportunities for lending.
- Risk Assessment: The consultant will Identify inherent risks, quantify them and identify ways of managing risks around specific commodities and supply chains.
- Facilitate a validation workshop.
- Redesign of Kilimo Booster: Incorporating the market research and risk mitigation findings, the consultant will review the current product features to better meet the needs of existing and potential clients of Musoni.
This assignment will generate the following deliverables:
- A market research report on specific agricultural supply chains and their economics identified key agribusinesses and their clients/suppliers and mapped opportunities for lending.
- A risk assessment report detailing all inherent risks, quantities and identified ways of managing risks around the specific commodities and supply chains.
- A validation workshop report with recommendations on the proposed additional features to the Kilimo Booster product.
- Final report on the redesigned product with a detailed implementation plan and budget and systems to monitor performance against plan
Estimated LOE for this consultancy is 32 days. Kenya Investment Mechanism will provide technical oversight and supervision through the DCA Advisor with overall guidance by the COP.
Required Experience and Qualifications of the consultant;
- A masters degree in finance, business administration, economics or a Bachelors degree with more than 10 years working experience
- At least 10 years experience in banking, micro finance, research and product development
- At least 5 years experience market research, and design of financial products
- Be a strategic thinker with solid business judgment and analytical problem solving abilities
- Extensive experience in microfinance lending and product development/design
- Extensive experience in microfinance operations, credit policies and risk management
- A strong knowledge of financial reports and analysis
- Strong written and verbal communication skills
- Experience in loan guarantee mechanisms will be an added advantage