Project Overview and Role
Strengthening Agricultural Finance in Rural Areas (SAFIRA) is a 3 years project that is part of the Government of Indonesia (GoI) strategy to accelerate poverty reduction through inclusive economic development. It is supported by BAPPENAS and the Australian Government’s Department of Foreign Affairs (DFAT) under the Australia-Indonesia Partnership for Rural Economic Development (AIP-Rural).
The SAFIRA project will work with partner financial institutions (PFIs), small and medium enterprises (SMEs) (e.g. seed producers, other input suppliers, collectors, processors, other traders) and farmers, to equip them with the skills and capability to engage in sustainable applications of agricultural value chain financing (VCF).
AIP-Rural is a suite of programs that improves smallholder farmers’ access to new markets, better inputs, knowhow and technology, irrigation and small loans. AIP-Rural operates in Eastern Indonesia and focuses on agricultural sectors that have strong growth potential and are the main source of income for a large number of smallholder farmers.
As with other AIP-Rural projects, the key goal of SAFIRA is to increase access to finance and improve the net incomes of its beneficiaries, in this case 12,000 smallholder farmers. The project will also monitor other indicators, such as the volume and quality of its PFIs’ agricultural portfolios.
This position shall focus on identifying, analysing and documenting existing and missing linkages in access to finance for Rice Farmers in Kabupaten Gresik and recommend improvements to fill any gap between demand and supply of the financial services.
The Consultant(s) shall :
1. Conduct Market Analysis of the main players in the Rice Value Chain in Gresik (such as banks, collectors/traders, processors and input suppliers) and their inter relationships, the market potential for rice farmers and other main players to access finance and also the obstacles that may arise and efforts needed to overcome these obstacles
2. Demand side :
Study and describe the various profiles of rice farmers in Gresik, in terms of :
• Their typical demand for finance
• Financial needs for rice cultivation per cycle and per hectare and the existing financial support that they already have
• Owned assets (including the legal status of the assets)
• Average farmer’s business profile and their profitability per cycle and per hectare
Identify and describe the various profiles of rice collectors/traders in Gresik and input suppliers in Gresik, distinguishing between (a) cooperatives/ KUDs and (b) SMEs/entrepreneurs, and their scale of operation (i) small, (ii)medium and (iii) large in terms of :
• Numbers operating their businesses in Gresik
• Service area
• Term of payment of rice purchasing from the farmers or inputs supplied and their cyclical cash flow profile
• Business management capacity
• Owned assets/capital
• Any financing services provided by rice traders or input suppliers to the farmers.
• Their typical demand for finance especially by small and medium traders or input suppliers
• Current rice traders and input suppliers Sales/Turnover profile
3. Supply side :
Identify the profile of Financial Services Providers in and near to Gresik, in terms of :
• Availability of Financial Services and support that the rice farmers, small rice traders and input suppliers can access
• Details of the institutions (eg. Commercial Banks, BPRs, Cooperatives/ KUDs, MFIs)
• The availability of Agriculture Loan Product and its requirements (including collateral)
• Analyze the information sources to derive robust, defensible estimates of the current annual volume of financing in the rice sector of Gresik (as defined) and the approximate numbers of customers reached and, if possible, the breakdown at Sub District (Kecamatan) level.
4. Gap : analyse above demand and supply and conclude what is the gap is between them
5. Analyse the cause for the gap, including the obstacles that are faced by the rice farmers and rice traders in accessing financial services.
6. Recommendation for closing the gap :
Development/ introduction of appropriate value chain financial products : identify what new financial services products could be developed/introduced locally to address the gap and to fit in the value chain as well (where appropriate refer to best practices in providing rice farmers and traders with access to finance, available in Indonesia and/or surrounding countries).
The Consultant can rely on desk top analysis to a large extent, but will include field visits and in-depth interviews and other interactions with financial and other institutions, where feasible within the project time constraints, as needed for data clarification and verification.
Expected Output and Deliverable
The Consultant is expected to submit the following :
1. A PowerPoint presentation of no more than twenty (20) slides summarising the findings.
2. A final report in a format to be agreed covering all of the detailed tasks listed above
All materials should be in Bahasa Indonesia with item (1) also in English.
The following information provides the timing of the key activities in implementing the Study.
- Contracting of the consulting firm - 10 November
- Agree format for report (2) - 17 November
- Draft report (2) - 21 November
- Agreement on amendments to draft report (2) and outline of reports (1) - 28 November
- Final reports - 10 December
Key Selection Criteria
- Specific skills in writing sector or market studies (or other related studies), with general strengths in written and oral communications
- A strong track record in design and implementation of Value Chain Finance, Agriculture Finance, SME agribusiness finance and Financial Analysis of the Agriculture SMEs.
- Broader expertise in the agricultural sector and more general private sector development programs.
- Strong conceptual foundation on VCF and/or market development approach and practical experience in its application in different contexts.
- Previous experience in developing financial service design is an advantage
Proposals should include:
• A proposed work plan by estimated days for executing this assignment, in no more than 3 pages;
• An indication of the days available for the entire project during the period of 10 November to 10 December 2016; and
• Confirmation of the rates to be charged by the Consultant(s) on a daily basis in Indonesian Rupiah (IDR).
Please send Proposals by the Close of Business (Surabaya time) on Tuesday, 8 November 2016 with the subject heading VCF Consultant to: email@example.com
In submitting my application, I certify that:
• the information provided in my CV is accurate and hereby authorize Palladium to make whatsoever enquiries it may consider reasonable and necessary to undertake in the course of the selection process in relation to information I have provided in my CV or any other matter which may relate to my suitability for the position; and
• I have not been convicted of an offence of, or relating to, bribery, fraud or child abuse, nor am I subject to any proceedings or investigation which could lead to a conviction.