VCF Profitability Case Study Consultant

Background of the Project and Assignment

The Government of Indonesia partners with the Government of Australia on an initiative to boost smallholder farmers’ incomes: The Australia-Indonesia Partnership for Rural Economic Development (AIP-Rural).

 

AIP-Rural is a suite of programs that improves smallholder farmers’ access to new markets, better inputs, knowhow, technology, irrigation, and small loans. Its goal is to achieve a sustainable 30% increase in the net incomes of 1,000,000 male and female smallholder farmers in Eastern Indonesia by 2022. AIP-Rural operates in East Java, West and East of Nusa Tenggara, Papua and West Papua.

 

The program focuses on agricultural sectors that display strong growth potential and are the main source of income for many smallholder farmers. All of this is done via co-investing in new business models with local, regional, national and international market players to create business models that improve the agriculture sector’s competitiveness, especially for smallholder farmers.

 

AIP-Rural’s four programs are:

 

Promoting Rural Income through Support for Markets in Agriculture (PRISMA)

A program dedicated to supporting the Government of Indonesia’s mid-term development strategy to eradicate rural poverty. The program aims to improve agriculture competitiveness – productivity, profit, access to new or better markets, and innovation – for rural farmers. PRISMA aims to achieve a 30% increase in the net incomes of 300,000 male and female smallholder farmers in Eastern Indonesia by the program’s completion.

 

Tertiary Irrigation Technical Assistance (TIRTA)

TIRTA is a program that aims to improve smallholder farmers’ access to irrigation. It supports the creation of tertiary irrigation schemes that are managed by HIPPA (water user associations) and local investors (lead farmers or local entrepreneurs). The program’s goal is to increase the net income of 10,000 farmers by 60% through improvements to the efficiency, technical and economic viability of at least 35 tertiary irrigation projects.

 

Strengthening Agriculture Finance in Rural Areas (SAFIRA)

This is a program that improves smallholder farmers’ access to essential financial services, such as business and investment capital loans. The program facilitates a financial service model that can answer to farmers’ specific needs through a partnership between formal and informal financial institutions in rural areas. The program will also expand smallholder farmers’ financial access through key market stakeholders (including but not limited to input retailers, collectors, traders and manufacturing companies) in the value chain.

 

Applied Research and Innovation System in Agriculture (ARISA)

ARISA is a partnership between Indonesia’s Agency for the Assessment and Application of Technology (BPPT) and Australia’s science and technology think tank, the Commonwealth Scientific and Industrial Research Organization (CSIRO), that aims to disseminate applied and adaptive research in agriculture that will have practical and significant impacts on the incomes of farmers. Its goal is to support innovations that can increase the incomes of 10,000 small farmers in Eastern Indonesia by the end of 2018.

 

Strengthening Agricultural Rural Finance in Rural Areas (SAFIRA) is a three-year project that is part of the Government of Indonesia (GoI) strategy to accelerate poverty reduction through inclusive economic development. SAFIRA will focus initially on East Java, West Nusa Tenggara (NTB), and East Nusa Tenggara (NTT). 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 program will focus on agriculture value chain finance (VCF) to expand smallholder farmer access to finance. VCF is made possible by value chain relationships and undocumented agreements. SAFIRA 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 VCF so that finance may flow through the chain.

Part of SAFIRA’s intention is to support financial institutions and other value-chain actors to utilize the available information about VCF and strengthen the institutional capacity in VCF at each level. As part of this, SAFIRA would like to build the evidence base for VCF and investing in smallholder farmers involved in agriculture, from our own experience.

Purpose of The Consultancy

SAFIRA would like to engage a consultant to conduct a review of a selected partner and generate a case study of how that partner was able to profitably lend to smallholder farmers dealing with issues such as larger transaction costs, perceived and real risks, etc.

Roles and Responsibilities

review and develop the case study. Activities should include:

• A meeting with selected partners to gain an insight and relevant facts
• Discussion with the partner about what information they would be willing to make public and what might be sensitive
• Collection and analysis of partners profitability (income statement, P&L from VCF unit if possible)
• Seeing the report through drafting, editing and finalisation stages
• Reviewing report with partner

The report should include:

• A user-friendly analysis of partner profitability in lending to value chain actors
• Conditions that were required on the ground to see this return
• A rough ‘best practices’ summary of what has worked
• Lessons learned by the partner and by SAFIRA

The consultant will maintain coordination with SAFIRA Team Leader and Coordinator during the assignment.

Key Selection Criteria

Essential skills and experience:

• Fluent in English and Bahasa Indonesia
• Solid, unwavering understanding of financial concepts and profitability with minimum 10 years experiences
• Experts in report writing both in English and Bahasa Indonesia
• Minimum education is bachelor degree in economics, finance, business, statistic, or other related discipline.
• Strong record working in agriculture financing issues in Indonesia
• Ability to work independently and as a member of a team.
• Professional presentation and communication skills both in English and Bahasa Indonesia.

Functional Relationships

This position reports to the SAFIRA Team Leader with support from the program Coordinator.

 

Input and Location

The total input for this assignment is up to 25 days with information as follows:

• The consultant work will be done on weekdays, weekend and Indonesia national holidays in Surabaya with travel to the field as necessary
• All reimbursable costs (including local transportation) will be paid against actual costs incurred.
• Hotels will be arranged by AIP-Rural.
• Consulting Fee and Per-diem will be paid based on actual working days and meals which are not provided by the training session.
• Consulting Fee and Per-diem will be paid after the consultant send the timesheet, respective deliverables and expense report according to the actual expenses.

Expected Output and Deliverables

The output of this assignment will be as follows:

Deliverable	Due Date 2018
Develop design of profitability case study	8 May
Data and information collection	15 May
First draft data analysis and report	20 May
Presentation to SAFIRA team	22 May
Final report	31 May

 

How to Apply

Please apply via following link:  VCF Profitability Case Study Consultant

Female candidates are encouraged to apply.

Applications close on 6^th April 2018