mfarmpay Inc. is part of the Mastercard StartPath family (Wave 12)
Assignment: Undertake feasibility studies to incorporate Credit Guarantee Instrument (CGI) as part of mfarmPay/agroPay product deployment for partner financial institutions and agri-lenders in Ghana
Reports to: Chief Product Manager
mfarmPay is a credit derisking service providing scientifically validated credit scoring infrastructure for rural smallholder African farmers complemented with climate information and agronomic advisory. mfarmPay aims to unlock billions of flexible financing, including climate financing, to create a sustainable farming business for financially underserved farmers across multiple frontier African economies.
Africa's agricultural production relies mainly on the output of rural smallholder farmers who are heavily constrained with three critical farming issues: lack of access to efficient commodity markets, lack of access to efficient climate information and adaptation knowledge products, and lack of innovative financial instruments to unlock credit towards them. These inefficiencies in the agricultural value chain prevent these farmers from fully harnessing and contributing meaningfully to the agrifood value chain. Critical among these is access to innovative and flexible financing for smallholder farmers, a key bottleneck to agricultural growth in Africa.
Agriculture plays a key role in Ghana’s economy, but the sector’s advancement is hampered by limited access to finance. The sector accounts for 21.2 percent of GDP and employs nearly 60 percent of the labor force. Despite its size and importance, access to agricultural finance in Ghana is challenging to obtain, however, and where it is available, is often prohibitively expensive. Agriculture receives substantially less commercial bank lending than other sectors; barely 5 percent of total credit to the private sector. Interest rates for commercial bank loans are quite high, averaging 30 percent per annum. Financing tenors tend to be shorter-term, prohibiting longer-term investments. As a result, firms and smallholders alike have limited ability to modernize and upgrade agricultural value chains and expand agricultural trade.
Relevance: It is clear there are a number of constraints to agriculture-related financing and a number of possible solutions to address this challenge. What is unclear is which solutions will be the most effective and efficient in stimulating financing to the missing middle for investment in agriculture, without crowding out local finance providers and distorting the finance markets. mfarmPay team posits that Credit Guarantee Instruments are known to provide added incentives for investments in numerous value chain segments but literature is scarce on its potential to unlock financing/credit towards smallholder farmers.
Technical Assistance Facility:
mfarmpay Inc., through its parent company, SyeComp, has received a technical assistance facility from the Mastercard Foundation Funds for Rural Prosperity Programme (FRP) to conduct an in-depth market feasibility to bundle Credit Guarantee Instrument with mfarmPay/agroPay product in Ghana to incentivize smallholder farmer financing by financial institutions to offer low interest rates, charges, and lend. The company thus requires the expert services of an Individual Business Development Services (BDS) Consultant or BDS Consulting firm to conduct the feasibility study.
An individual BDS Consultant or firm that has the required competency and can clearly demonstrate abilities to meet the relevant criteria for this assignment can submit a technical proposal ( including detailed work plan and methodology), portfolio of previous works, and full cost proposal for the assignment. Please quote the subject line: Consultancy: Feasibility Studies for Credit Guarantee Instrument Bundling with mfarmPay
Scope of Work:
Run a comprehensive assessment and conduct market research on Credit Guarantee Instruments, including a review of previous and currently active instruments and explore market fit with mfarmPay/agroPay
Propose a farmer-centered design and approach to bundling with mfarmPay/agroPay based on detailed risk run and operational feasibility
Suggest a unique go-to-market plan, including sustainability plan for mfarmPay/agroPay in Ghana which would be replicated in Kenya and Uganda.
Email your proposals to: elorm@mfarmpay.com
Cc.: edna@mfarmpay.com
Deadline for submission of proposals: October 7, 2021
Work duration: 8 weeks
Clarification enquiries: elorm@mfarmpay.com