Blending Islamic Finance with Alternative Finance Instruments


Location : Home-based
Application Deadline :19-Dec-17 (Midnight New York, USA)
Time left :4d 11h 6m
Type of Contract :Individual Contract
Post Level :International Consultant
Languages Required :
English  
Duration of Initial Contract :Estimated December 2017 – February 2018
Expected Duration of Assignment :up to 40 working days


Background

Purpose
To lead a research team in exploring the opportunities and challenges of blending Islamic financial practices with alternative finance instruments and technologies in Indonesia and Turkey for SDG implementation.

Objective
To support the development of new financial mechanisms for Islamic Finance portfolio of UNDP with an aim to finance SDG-focused initiatives.  

Background 
The required investment for funding the Sustainable Development Goals (SDGs) has been estimated to be US$4.5 trillion per year. The Official Development Assistance is not sufficient to implement this agenda. The financing gap required for the SDGs is only 1.1 percent of the estimated value of global capital markets, which calls for exploring new global partnerships and innovative sources of finance to leverage private investments alongside official development assistance.

In this search for new sources of financing, UNDP finds emergence of new sources of financial mechanisms aimed at socially geared investment projects and development. Equally, increasing analysis and examination show how various mechanisms of Islamic finance can play a critical role in closing this gap and bringing countries closer to SDG achievement.

Islamic finance (IF) is one of the fastest-growing segments of the global financial industry with global assets expected to surpass US$3 trillion by 2020. Islamic finance has become increasingly relevant in funding development, also in non-Muslim countries. Islamic finance resonates clearly with the 2030 Agenda with strong socially responsible investment principles such as risk sharing, profit sharing and equity-like modes of financing and it views debt with suspicion. Also, Islamic finance must avoid investments in prohibited sectors such as tobacco, alcohol and drugs businesses.

Some of the dominant alternative finance mechanisms emerging are social impact investments and payment for success mechanisms, crowd-investment and financial applications of blockchain. SIBs have grown since 2010 to over 90 countries across the world. Various forms of crowdfunding are projected to overtake venture capitalist investment by 2018 and grow to over $100 billion as per World Bank statistics by 2020. Also, it is projected that over 10% of global GDP will be on blockchain by 2020.

Islamic social finance and fintech solutions have developed rather slowly despite the great potential. Many analyses are indicating that the current financial system often underestimates the emerging solutions that can leverage to create bigger development impact and often excludes the needs of the most marginalized and young businesses fail to fulfil the requirements of the banks. 
To explore the potential of Islamic finance in financing SDGs and how the alternative finance mechanisms and technologies could help in channelling the Islamic funds more effectively into impact initiatives, UNDP launched a project “Blending Islamic Finance with Alternative Finance Instruments”. The project is run by the Istanbul Regional Hub’s Alternative Lab in partnership with Bangkok Regional Hub and UNDP country offices of Turkey and Indonesia. 

The initiative will aim to blend alternative financing mechanisms with Islamic financing to create more inclusive and innovative financial services for people and businesses beyond the traditional financial products. The project will focus on identifying a number of tools and instruments, where alternative financing mechanisms can be blended with traditional Islamic finance instruments. Two concrete experimentations will test the blended finance instruments and their suitability to be established as new service lines for Islamic Finance. The best institutional frameworks for the development and implementation of the new financial instruments will be explored using examples in two countries Turkey and Indonesia.

To examine the opportunities and challenges in combining the Islamic finance with alternative finance mechanisms, UNDP is looking for an international consultant to carry out an ethnographic research in the pilot countries of Turkey and Indonesia.

 


Duties and Responsibilities

The consultant will lead a research on exploring the potentials of engaging Islamic finance into achieving Agenda 2030 and SDGs. The expert will be supported by the local national experts in both Turkey and Indonesia, who are feeding the information from the ground for the research, as well as by the UNDP country offices in Jakarta and Ankara. The consultant will be responsible for leading and guiding the team in the work for the mutual research.

The main focus areas of the research are: 

  • Describe the status of Islamic finance sector with its legislative framework in Turkey and Indonesia; 
  • Identify ways in which Islamic finance flows (such as zakat, waqf, takaful) currently take place in Indonesia and Turkey: both official and unofficial flows, volumes and trends over time and reasons for using different channels;
  • Describe concrete opportunities to leverage those towards certifiable social impact projects and enabling/limiting factors for Islamic finance;
  • Identify potential partner institutions (public, private, and NGOs) for Islamic finance- SDG- initiatives in Turkey and Indonesia;
  • Describe where and when alternative finance mechanisms and fintech (such as microfinancing, crowdfunding, sukuk bonds, blockchain) could enhance the mobilization of funds from Islamic finance sources to SDGs and how to secure that the new mechanisms are Shariah compliant.

In addition, the study should explore the role of UNDP and similar entities to work as an intermediary in channelling Islamic funds into SDG-related projects and describe what potential limitations there could be and what enabling actions are needed.
The findings will be gathered into a final report with concrete case examples (with specific data and evidence) for Turkey and Indonesia (at least 4 per country) for blending Islamic finance and alternative finance mechanisms and actions points for UNDP in creating an enabling framework for the blended finance projects. In addition, the consultant will prepare a presentation on the findings for UNDP.

Deliverables and timelines
Consultant is responsible for the following deliverables:

  • Deliverable 1 - A research plan with the timeline; Deadline: 1 week from signing the contract;
  • Deliverable 2 - Draft report with action points and case examples for Turkey and Indonesia; Deadline: 7 weeks from signing the contract;
  • Deliverable 3 - Final report with action points and case examples for Turkey and Indonesia; Deadline: 8 weeks from signing the contract;
  • Deliverable 4 - Presentation of findings; Deadline: 8 weeks from signing the contract.

The consultant will be paid a lump sum after delivering all the deliverables.


Competencies

Corporate competences:

  • 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;
  • Fulfills all obligations to gender sensitivity and zero tolerance for sexual harassment.

Functional competencies:

  • Proven capacity to produce reports and analyses in English;
  • Proven ability to create new concepts and ideas;
  • Proven team management skills;
  • Good qualitative and quantitative research skills;
  • Consistently ensures timeliness and quality of work;
  • Excellent interpersonal and team work skills.


Required Skills and Experience

Education:

  • Master’s degree or equivalent in the field of economics, law or related field

Experience:

  • Minimum 6 years of relevant professional experience in the Islamic financial sector;
  • Proven experience in working with financial technologies or alternative financing;
  • Experience with qualitative and quantitative research in economics.

Language skills:

  • Proficiency in English.

Evaluation of Applicants:
Individual consultants will be evaluated based on a cumulative analysis taking into consideration the combination of the applicants’ qualifications and financial proposal.

The award of the contract should be made to the individual consultant whose offer has been evaluated and determined as:
Responsive and compliant and
Having received the highest score out of a pre-determined set of weighted technical and financial criteria specific to the solicitation. 

Technical Criteria - 70% of total evaluation – max. 70 points:

  • Criteria A (Education) – max points 10;
  • Criteria B (Work experience in Islamic finance sector) – max points 20;
  • Criteria C (Experience on Altfin and/or Fintech): max points 15;
  • Criteria D (Qualitative and quantitative research skills) – max points 10;
  • Criteria E (Quality of the table of content of the research report) - max points 10;
  • Criteria F (Language) – max points: 5;

Financial Criteria - 30% of total evaluation – max. 30 points.

Only candidates who will obtain at least 70% of points in desk review will be considered for financial evaluation. 

Application procedures:
Qualified candidates are requested to apply online via this website. The application should contain:

  • Cover letter explaining why you are the most suitable candidate for the advertised position;
  • A draft table of content (max 1 page long) of the research report illustrating that the consultant understands the given assignment;
  • Filled P11 form including past experience in similar projects and contact details of referees (blank form can be downloaded from http://www.eurasia.undp.org/content/dam/rbec/docs/P11_modified_for_SCs_and_ICs.doc); please upload the P11 instead of your CV;
  • Financial Proposal* in USD - consisting of total all-inclusive lump sum amount for professional fee for tasks specified in this announcement. 

Incomplete applications will not be considered. Please make sure you have provided all requested materials.

*Please note that the financial proposal is all-inclusive and shall take into account various expenses incurred by the consultant/contractor during the contract period (e.g. fee, health insurance, vaccination, personal security needs and any other relevant expenses related to the performance of services...).  No travel costs are foreseen. If a need for travel arises, these costs will be paid separately as per UNDP rules and regulations.

Payments will be made only upon confirmation of UNDP on delivering on the contract obligations in a satisfactory manner.


UNDP is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence.


If you are experiencing difficulties with online job applications, please contact jobs.help@undp.org.

© 2016 United Nations Development Programme