Financial Regulatory Framework Assessment

Background

Background

 The environment of financial institutions in Guinea Bissau is underdeveloped. There are only 5 commercial Banks providing limited conventional services that are costly, lack inclusiveness and fail to address market demand. The Financial system is not aligned with the national economic development priorities. The World Bank’s Doing Business Index ranks Guinea-Bissau 174 out of 190 countries. It is estimated that only 2.7 percent of businesses in Guinea-Bissau has access to bank credit and financial services, as opposed to 20.7 percent of businesses in Sub-Saharan Africa as a whole.1 Credit is often only granted to the country’s largest firms that operate on cashew farming and excludes most small businesses, and are short-term, thereby limiting opportunities for investment. The bank’s margins are high due to limited market size, high transactions costs and institutional instability. Furthermore, the microfinance sector is setback by regulatory and supervisory weaknesses, despite mechanisms introduced by the Central Bank of West African States (BCEAO).2 In 2018, a study by Samuel Hall showed that 48% of Guinean receive funds3 through remittances. Another study estimates that remittances benefit 70% of Guinea-Bissau families4. According to World Bank Development Indicators Database, in 2019, remittances from Guinea-Bissau diaspora amounted to around 131 million USD, up from around 128 million USD and 56.5 million USD in 2018 and 2016, respectively. Meanwhile, the share of remittances in GDP grew from 5% in 2016 to 8.8% and 9.8% in 2018 and 2019, respectively5. Currently, remittances are sent using expensive methods such as bank transfers, Western Union, and Money Gram or informal methods such as sending cash with travelers. The estimated cost of annual transfers, in 2017, were around 10% of total annual transfers.

The financial inclusion initiative will focus on enhancing financial inclusion through the creation and provision of innovative low-costs financial services and solutions that caters to the most vulnerable groups in local communities, MSMES, women, and the informal sector to improve inclusiveness in value chains, with a focus on youth and women entrepreneurship empowerment.

Currently, there financial services provided MTN and Orange Money that are used for payments for public services payment (e.g., electricity) and cash transfers among businesses and individuals. Cash express has been launched recently by Ecobank. However, the services are cost prohibitive and have limited outreach as well as suffer from low capacity and bad customer service.

Financial services will include financial literacy, mobile banking, and other digital solutions (e.g., Fintech digital solutions). The provision of such financial services will better connect the diaspora with the recipient community, reduce transactions costs and increase the inflow of remittances, leading to the stimulation of consumption, saving and investment and will, therefore, have significant positive impact on poverty. Innovative digital financial solutions are expected to result in an average of 60% reduction in transactions costs. The financial services that are planned under this proposal will also support private sector, particularly MSMEs, recovery, as recommended by the “Building Back Better for SMEs in Guinea Bissau” study, which was commissioned by UNDP to assess the impact of COVID-19 on SMEs.

Duties and Responsibilities

Duties and Responsibilities

Objectives of the Assignment

The main objective of this assignment is two folds: First, to review the current financial and banking regulatory and policy framework in Guinea Bissau, particularly relating to microfinance, financial services (e.g. digital and non-digital payments, checking and savings accounts and money transfers), access of domestic financial services to the diaspora and financial inclusion.  The assessment should identify gaps and bottlenecks and concrete and applicable recommendations to address them, particularly in relation to the provision of innovative digital and non-digital financial services designed to enhance financial inclusion and increase access to domestic financial services for the diaspora. Second, to assess the capacity of the regulatory body, identify gaps and recommend necessary capacity building initiatives. It The assessments should identify entry points for the project, and UNDP, to make the financial regulatory landscape more conducive to financial inclusion and microfinance and enhance related capacities.

Tasks of the consultant

The main task of the consultant:

• Review financial and banking policies and regulations, particularly in relation to financial inclusion, micro finance, degitalization and credit.
• Review doing business regulations and policies related to financial inclusion, micro finance, degitalization and credit.
• Conduct gaps and needs assessment of financial, banking and business policies and regulations, particularly in relation to financial inclusion, micro finance, degitalization and credit.
• Analyse the roadmap for financial inclusion in UEMOA (WAEMU)
• Identify gaps and weakness that impede the development of financial inclusion, facilitatation of investment, microfinance, degitalization and business growth, particularly MSMEs.
• Develop a set of concrete and applicable recommendations, in line with UEMOA (WAEMU) and international polcies and regulation, to address gaps and challenges.
• Identify entry points for the project to address gaps, support the design and implementation innovative financial solutions and and/or provide capacity building to financial institutions.

 

Deliverables

• Develop and present a detailed workplan, which include field work and consultations, within the first 7 days of the assignment.
• Complete a first round of consultations with central bank, commercial banks, microfinance institutions, APBIF, agencies providing financial services (e.g. money transfers and payment service) and other relevant stakeholders within 30 days
• Submit an annotated outline of the report, and a summary report of the results of consultations within 45 days.
• Submit a first draft of the report within 21 days of receiving feedback on the annotated outline.
• Submit a semi-final draft of the report and the capacity building plan within 21 days of receiving comments and feedback on the first draft and in light of the second round of consultations
• Submit finalized drafts of all required deliverables within 21 days of the receipt of comments and feedback on the semi-final drafts.

Terms of Payment:

• 50% after submission and acceptance of first draft the deliverables.
• 50% upon submission and acceptance of final draft of the deliverables.

Competencies

Competencies

Core

• Demonstrates integrity by modeling the UN’s values and ethical standards
• Promotes the vision, mission, and strategic goals of UNDP
• Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability
• Treats all people fairly without favoritism
• Ability to work with a multi-cultural and diverse team

Technical/Functional

• Excellent analytical skills
• Excellent quantitative skills
• Excellent communication skills
• Results driven, ability to work under pressure and to meet required deadlines
• Good understanding and practice of capacity development
• Cultural sensitivity
• Diplomatic skills

Required Skills and Experience

Education

• Advanced university degree in Finance, Economics and/or related fields.

Experience

• Have at least 10 years of experience working on microfinance and financial inclusion in developing countries. Have at least 7 years of working experience on financial regulations related to microfinance and financial inclusion in developing countries.
• Have experience working with UN agencies and governmental entities, especially on the financial inclusion in developing countries and LDCs.
• Experience working in countries with week financial governance institutions and scarce data.
• Experience working in SIDS, LDCs and/or African countries are preferred.

Language

• Excellent written and spoken English and Portuguese and/or French.

Application procedure

The application package containing to file (one technical proposal and one financial proposal).

Technical proposal

The technical proposal will contain the following (to be uploaded as one file):

• A brief description of why the applicant considers her/himself the most suitable for the assignment; and
• Personal CV or P11 indicating all past experience from similar projects and specifying the relevant assignment period (from/to), as well as the email and telephone contacts of at least three (3) professional references.

Financial proposal

Scope of Price Proposal and Schedule of Payments:

• Financial proposals must be expressed as “an all-inclusive daily fee” in USD.
• Payment will be made upon submission of a certificate of payment request, indicating outputs achieved and days worked to be verified and cleared for payment by the supervisor.

Travel

If travel is required, the travel costs will be covered by UNDP in accordance with UNDP rules and procedures

Criteria for Selection of the Best Offer:

The selection of the best offer will be based on a Combined Scoring method – where the technical evaluation (desk review) will be weighted a maximum of 70% and combined with the price offer which will be weighted a maximum of 30%. The 70% rating shall be based on how well the Offer or meets the minimum qualifications/competencies described above.

Evaluation Criteria

The technical evaluation will be based on the following criteria with the corresponding points (out of a total 70 points):

• Master’s Degree in fields related to finance, economics, banking, business, law (with concentration on business and financial regulations) or equivalent field (25 points)
• At least 5 years of professional experience in financial inclusion, microfinance and banking in developing countries (15 points)
• At least 5 years of professional experience in financial and banking regulations, policies and  legaslations (15 points)
• Experience in supporting digital fincnial product development (15 points)
• Have experience working with UN agencies and governmental entities (10 points)
• Experience working in countries with weak governance institutions and scarce data (10 points)
• Experience working in SIDS, LDCs and/or African countries are preferred (10 points)

Financial Evaluation

Only applicants with a minimum of 45 points on their technical proposal will be considered for financial evaluation. The following formula will be used to evaluate financial proposal: p = 30 (µ/z),

Where

• p=points for the financial proposal being evaluated
• µ=price of the lowest priced proposal
• z = price of the proposal being evaluated

The contract will be awarded to the applicant who receives the highest combined score.