Historique

UNCDF launched Mobile Money for the Poor (MM4P) in March 2012, a global thematic initiative to address the opportunities and challenges of implementing branchless banking and mobile money in challenging markets in Africa and Asia. With support from the Bill & Melinda Gates Foundation (BMGF), UNCDF is implementing a “ecosystem support” programme in Uganda to hasten the scalability of digital finance (DF), particularly in rural areas.  This includes a high level of training, technical assistance and grants to financial service providers, agent networks, bulk payers, aggregators and the government of Uganda. Based on MM4P Theory of Change, UNCDF’s objective is to help and hasten the shift of the Ugandan digital finance market from expansion stage until they are firmly in the consolidation stage.  Objective at end of 2019 is to reach at least 50% of the adult population actively using digital finance (90 days).

In Uganda, UNCDF is working to digitize payments in 5 agricultural value chains [Coffee, Tea, seed oil, maize and Dairy]. While the 04 value chains [Tea, seed oil, maize and Dairy] are still at the start-up phase, bulk payments in the coffee value chain with Kyagalanyi Coffee Limited, one of the leading coffee exporters, has been running for the last 2 years.

Background to the coffee digitization work with Kyagalanyi Coffee Limited and partners  

Kyagalanyi Coffee Limited is the oldest licensed coffee exporter in Uganda, following the liberalization of the Uganda coffee industry in 1992. The company is part of the Volcafe group, the coffee house of ED&F Man. Kyagalanyi is involved in the procurement, processing, export and marketing of Arabica and Robusta coffee. The company contributes about 16% of the total coffee exported by the country, which is primarily sold to the European Union, Japan, Australia and South Sudan. The company has its main processing plant in Namanve Industrial area as well as another in Mbale dedicated to processing Arabica coffee.

Kyagalanyi buys coffee throughout the country from;

• Traders that deliver coffee directly to the processing factories in Namanve and Kampala;
• Traders that deliver coffee directly to one of the four mobile buying units that KCL operates in the country; and,
• Farmers that deliver coffee to one of the four sustainable coffee schemes that Kyagalanyi operates in Uganda.

In its four sustainable coffee schemes, Kyagalanyi assists about 12,000 farmers to sustainably improve coffee yields and quality. Through its Kyagalanyi Coffee Services programme, the company offers a range of services to its farmers. This includes agronomy advice, seedlings, agro-input supply and certification.

Kyagalanyi operations in the Mt. Elgon area                                       

Kyagalanyi sources an important part of its Arabica exports from the Mt. Elgon area. The company has recently constructed its own pre-cleaning and drying facilities in Mbale town. This factory serves as its main buying unit for conventional Arabica. Kyagalanyi buys three main quality grades: premium parchment, failed-premium parchment, and ordinary parchment. All coffee is analyzed for quality and farmers and traders are paid accordingly.

The Mt. Elgon Washed Arabica Scheme works with over 6,000 farmers (2015) and is the largest of the four sustainable coffee schemes that Kyagalanyi operates in Uganda. The Farmer Support Organization has over 40 field staff that support the registered farmers with a range of services, including annual home visits. The staff use a mobile data collection form to collect baseline information on each member farmer. Farmers are organized in Producer Organisations (POs) of 20-40 farmers. The scheme farmers deliver their coffee either as cherries to one of the six medium-sized washing stations that the company operates on the mountain or they home-process the cherries and deliver parchment to one of the many collection centres. The washing stations are located in the districts of Kapchorwa, Bulambuli, Sironko, Mbale and Manafwa. The scheme is certified under the international certification labels of 4C, UTZ and Rainforest.

In addition, Kyagalanyi buys conventional coffee from approximately 830 traders (2014 season). The majority of these traders deliver premium parchment coffee.  They source their coffee from smaller traders and/or farmers on Mt. Elgon. Depending on their size, conventional traders have established their own stores on the mountain and move with large sums of cash buying and collecting coffee.

The traders registered with Kyagalanyi coffee factory can be grouped into three categories:

• Small-sized traders. These traders each engage with (10-50) farmers. Each farmer operates with an average capital of UGX 10,000,000
• Medium-sized traders. These traders engage with (50-100) farmers. Each of these farmers operates with an average capital of UGX 20,000,000
• Large-sized traders. These traders engage with (100-200) farmers. Each of these farmers operates with an average capital of UGX 50,000,000

In the Mt. Elgon area, the fly crop and main crop follow each other quickly. The main season starts in July/August and ends in December/January depending on the altitude and the weather. The large majority of buying transactions and payments take place during this period.

Payment Methods at Kyagalanyi Coffee LTD                                        

Coffee LTD

All 5,500 certified farmers delivering cherries to the washing stations are paid in cash on an individual basis and given individual receipts. The transaction size varies from a few thousand shilling to 10,000,000 shillings ($4,000). During the season, the washing station managers travel every second day with 50,000,000-70,000,000 shillings ($45,000-$60,000) from Mbale to the washing stations.

The 2,000 parchment farmers deliver their certified home-processed parchment to one of 77 collection centres. There the Promoter Farmer of the group purchases the parchment. The Promoter Farmers are small traders. The Promoter Farmer pays farmers in cash and writes individual receipts. Individual payments range from a few thousand to 1,000,000 shillings ($400). The parchment is collected with a Kyagalanyi truck and delivered to Mbale. After quality analysis and weighing, Kyagalanyi pays the Promoter Farmer through Bank transfer. Promoter Farmer payments range from 2,000,000- 20,000,000 shillings ($1,000-$8,000) per transaction. The Promoter Farmers then take out the cash and travel with it to their villages to pay the farmers in their group.

The 830 conventional traders used to be paid by cheque. In 2014, Kyagalanyi requested all traders to open an account with Crane bank and traders are now paid through the bank transfer. Individual transactions range from 2,000,000-50,000,000 shillings ($1,000-$45,000). Traders withdraw the money as cash and travel to the mountain and use it for their next purchasing round.

Cash transactions pose a number of challenges.

• Cash transactions at the washing stations are difficult to monitor for KCL since they have to wait for weekly reports. This creates possibilities for theft.
• KCL staff members face a risk of losing cash through theft and robbery, both during travel and at the washing stations.
• Time is wasted in travel since the washing station managers have to move at least twice in a week down to Mbale to pick money and every station is in a radius of around 40 km.
• More time is lost since they have to first report to the KCL Mbale office to pick a check before they go to the bank for cashing.
• Traders and farmers face a risk losing cash during travel and at home
• The culture of saving is compromised because of the lack of access to financial institutions.
• Writing receipts is time consuming and expensive (one receipt costs 67 UGX).

Implementing Digital Payments in the coffee value chain                                       

In Q1 2015 MM4P began preparations with MTN and KCL to digitize payments in their cash eco-systems across the multiple players that intersect with the coffee value chain.  In the planning phase, key factors to creating an ecosystem within which digital bulk payments would uptake were identified, including the following.

a) Human Resources. MM4P supported MTN with a Project Management resource through their implementing partners, Micro Save, to support all stakeholders in coordinating project deliverables given headcount constraints at both MTN and KCL.

b) Network Availability and Stability. Given the remoteness and hilly terrain of the location, there was very limited mobile phone connectivity at most of the KCL coffee washing stations within the pilot area. MM4P supported MTN in developing a business case for investing in network infrastructure at the Kapchorwa coffee washing station.  MM4P also extended MTN a grant to de-risk the infrastructure investment in the event of revenue loss.  There are still Internet connectivity challenges at 2 of the washing stations in the pilot area.

c) Transaction Tariffs. Primary research overwhelmingly picked up Cash-Out transaction tariffs as a barrier to mobile money adoption in the pilot community. Through technical assistance from YO Uganda, MM4P tested off-setting MTN’s Cash-Out tariffs in Q4 2016 to incentivize uptake among farmers

d) Technical Support. With support of Vital Wave, MM4P supported KCL in the selection of a technical service provider, YO Uganda, to supply:

• Technical integration between MTN’s Mobile Money Platform and KCL’s Financial Accounting platform;
• Customization on the basic bulk payments platform solution provided by MTN to meet KCL financial accounting requirements; and,
• Training of KCL staff on solution and 24hrs after sales support.

e) Agent Footprint and Quality. Primary research confirmed that the agent spread in the pilot area was very thin with high incidences of absenteeism. Of the active agents, the majority were under-capitalized and could not adequately meet customer needs 4 out of 5 times a subscriber requested service. Based on the experience with MTN, whereby the MNO had limited resources on the ground in the project area that were able to support the project, MM4P contracted YO Uganda to handle all agent recruitment and onboarding processes to accelerate agent spread. To ensure activation of quality agents, a grant was extended to YO Uganda to develop an Agent MIS to effectively monitor agent-rebalancing levels. A roving rebalancing solution is also being piloted to support the recruited agents.

f) Merchant Payments. In order to create additional use cases for the farmers for e-value beyond peer-to-peer transfers, YO Uganda was tasked to recruit and support a merchant network in the pilot areas. Onboarding of Merchants is still low given liquidation and KYC challenges as well as a value proposition that is not suited to the needs of rural merchants.

g) Mobile Phone Penetration. Given limited spread of the electricity grid in the pilot area we leveraged, MTN’s existing partnership with Fenix International, a solar solutions provider, to couple a mobile phone with their solar solution package on a pay-go / hire-purchase model. The intention was to have a complete solution of a phone and a mechanism via which it could be charged.  MM4P is currently designing a pilot to:

• Subsidize the cost of a solar solution bundled with a phone;
• Guarantee cover of defaults made by subscribers on the repayment of the kits; and,
• Develop a lockable smart phone solution on the same pay-go basis as the solar solution.

h) Booster Team. Phone and Mobile Money literacy amongst the subscribers was poor during phase I of the pilot and hindered uptake of mobile money within the community. Mirroring MTN’s field staff structure, MM4P contracted YO Uganda to oversee a team of 24 field support resources to onboard and educate subscribers on mobile money and navigating the mobile phone menus. This focused and dedicated customer engagement strategy has resulted in the onboarding of 15,000 subscribers between July 2016 and November 2016.

Mobile Money Reward Scheme. Despite all the above-mentioned interventions, mobile money adoption is still below target. To increase uptake, MM4P extended a grant to YO Uganda in November 2016 to provide a reward to farmers as well as staff at KCL’s washing stations to incentivise farmers to accept mobile money, rather than cash for their coffee sold to KCL. With the end of the coffee season this test has just finished and its impact will be evaluated in the coming weeks.

The challenge the consultancy assignment seeks to address                                  

Despite that fact that UNCDF has supported MTN and KCL to create a favorable DFS uptake environment, pilot performance is still off target with regards to adoption. As of November 2016, less than 3,000 unique farmers, of the 7,000 targeted, had accepted mobile money as a mode of payment. The key players in the digitization efforts are reluctant and/or slow to switch from cash to digital payments;

• For KCL, the management made the decision to go digital, but they are reluctant to make a complete switch from cash to e-value due to concerns about driving farmers towards their competition who will be paying farmers in cash. As a result, top KCL management is not pushing washing station managers to drive digital payments over cash. KCL is currently deciding whether to digitize an additional 3 washing stations.
• For farmers, when presented with a choice to receive payments in either cash or mobile money, in the absence of a clear value proposition or incentives, farmers overwhelmingly choose cash. Their choice seems driven by comfort with a familiar currency.

It is against this background that UNCDF and CGAP are partnering on this project to engage the services of a consultant to undertake an activity-based costing (ABC) exercise to get a better insight and strengthen the value proposition for transitioning from cash to digital payments for the off-takers and farmers and a business case for the MNO [MTN] to drive traction towards bulk payments in agriculture.

• Off-takers: Conduct a thorough costing exercise for cash payments from off-takers to farmers to understand how cash payments compare with digital payments.
• Traders: Conduct a thorough costing exercise for cash payments from traders to farmers to understand how cash payments compare with digital payments.
• Smallholder farmers: Undertake an extensive costing exercise highlighting and comparing the cost implications of cash versus digital payments to farmers for their coffee payouts.
• MNO: Develop a business case for a Mobile Network Operator (e.g. MTN) in Uganda to explore and deepen the value proposition to invest and dedicate resources towards bulk payment projects.

The results of the exercise will inform UNCDF and CGAP’s work in bulk payments and drive adoption and usage of mobile money across the 5 agricultural value chains that UNCDF is working.

Devoirs et responsabilités

Inception

The selected consultant will engage with the farmers and Kyagalanyi Coffee management to clearly understand the cost structure, the process, risks, challenges and level of effort involved in processing cash and digital payments. This engagement will require face-to-face meetings, document and process review, focus group discussions and individual interviews, among other activities. To guide the work, the consultant will first develop a work plan in line with the scope activities for discussion and refinement with UNCDF and CGAP.

Implementation

The selected consultant will follow the agreed implement plan of activities presented in the work plan in-line with the scope of the activities and work closely with CGAP and UNCDF.

Delivery

The Consultant will deliver costing models for off-takers and farmers and a business case for MTN with detailed notes to guide how the models can be used.

Schedule: All deliverables related to this costing assignment will be completed before 15 May, 2017.

Deliverables: The selected firm/consultant will be expected to generate the following deliverables:

• An implementation plan that details the strategy, key themes to explore, questions to ask, processes to interrogate and activities to be undertaken while executing this work.
• ABC model for off-takers that highlights and compares the cost implications for cash payments versus digital payments.
• ABC model for farmers that highlights and compares the cost implications for cash payments versus digital payments.
• Detailed notes to guide users on understanding and using the costing models.
• A Business Case for MTN Uganda ltd that presents a justification for their engagement in bulk payments in the coffee value chain on the basis of the expected commercial benefit.

Acceptable Criteria for Deliverables: Deliverables will be considered acceptable to UNCDF and CGAP if they:

• Align clearly with the TOR, addressing all deliverables according to the schedule;
• Meet high quality standards and adhere to international financial and reporting standards.

Compétences

Professional:

• Takes on innovation and new approaches and fosters innovation in others;
• Creates an environment that fosters innovation and innovative thinking;
• Conceptualizes more effective approaches to programme development and implementation and to mobilizing and using resources.

Management/Client Orientation:

• Anticipates constraints in the delivery of services and identifies solutions or alternatives;
• Ability to interact and adapt communication with various management level with partners.
• Proactively identifies, develops and discusses solutions for internal and external clients, and persuades management to undertake new projects or services;
• Demonstrates openness to change and ability to manage complexities, and resolve problems;
• Focus on impact and results for clients and stakeholders;
• Builds trust in interactions with others, facilitates partnerships; excellent networking capabilities to link people/businesses from diverse horizons;
• Approaches work with energy and a positive, constructive attitude and responds positively to feedback;
• Committed to team work, working with other stakeholders.

Qualifications et expériences requises

Education:

• A Master’s degree in technology, economics, public/business administration, social sciences, or related discipline or the equivalent experience is mandatory.

Experience: 

• Over 5 years of experience in performing similar assignments in financial services is mandatory;
• Good understanding and experience with bulk payments, digital financial services and mobile money is mandatory;
• Strong financial modelling expertise with background in financial or cost accounting is mandatory;
• Experience with smallholder farming activities is desired;

Language:

• Fluency in English;

Timeline, duty station, total number of working days for the assignment duration of assignment, travel and provision of monitoring:

• Timeline: 2,5 Months - Total Number of Working Days for Assignment: 55 working days.
• Duty station: Kampala, Uganda;

Please note that UNCDF cannot guarantee residence permits or visa´s for consultants. Consultants are responsible for securing their work documentation. In the case of national consultants, applicants that are not nationals of the duty station requested will have to prove their residence status.   

Please note that consultants residing in the duty station will not be compensated for living expenses.

Travel:

• Consultants will quote travel in the financial proposal (1 return ticket from country of origin to Kampala, Uganda)
• For unforeseeable travel, payment of travel costs including tickets, lodging and terminal expenses should be agreed upon, between the respective business unit and Individual Consultant, prior to travel and will be reimbursed.

Provision of Monitoring, Progress Controls & Payments:

• The consultant will work under the direct supervision of two Task Managers: The Task Team Leaders are Nathan Were, CGAP Senior Financial Sector Specialist, and Delia Dean, Value Chain and Digital Finance Expert, UNCDF. The Task Team Leaders have final sign-off on deliverables and invoices. The selected consultant will report to the Task Team Leaders, as well as other CGAP and UNCDF staff as and when appropriate.

• Payment will be made on periodical basis in accordance with number of days worked and upon satisfactorily achieved deliverables. All payments are subject to the clearance and approval of the direct supervisor.
• Final payment shall require a signed performance evaluation of the consultant.

Application:

Interested individuals must submit the documents mentioned below as proposals in order to demonstrate their qualifications (NOTE: the system does not allow multiple uploads of documents. Applicants must make sure to upload all documents in one PDF file).

All applications must contain the following information:

• Cover letter with a summary statement of competencies in relation to the Terms of Reference (TOR);
• Earliest availability and proposed schedule for consultancy;
• Curriculum Vitae;
• Fully completed an signed P11 Personal History Form with names and current contacts of 3 referees (available from http://sas.undp.org/documents/p11_personal_history_form.doc);
• Signed financial proposal for the full month’s assignment outlining:

• Total professional fee (including professional fees, per diems in Kampala, Uganda (if applicable);
• Other professional expenses (such as insurance, taxes, etc.);
• Duty travel (1 return ticket from country of origin to Kampala, Uganda).

The financial proposal form is available at http://procurement notices.undp.org/view_file.cfm?doc_id=29916.

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

Individual consultants will be evaluated based on the following methodology:

Step I: Screening;

Step II: Technical Evaluation Weight - 70% (Step 1: 20 Points + Step 2: 80 Points = 100 Points);

Step III: Financial Evaluation Weight - 30%.

Step I: Screening

Applications will be screened and only applicants meeting the following minimum criteria (listed under education and experience) will progress to the pool for shortlisting.

Step II: Technical Evaluation:

• Shortlisting (20 points)

UNCDF will produce a shortlist of candidates and technically evaluate candidates as per experience requirements in the Terms of Reference. As applicable, only the first top 4 ranked applicants shall be considered for a desk review.

• Desk Review (80 points)

A desk review shall be conducted for the top 4 shortlisted candidates.

The financial evaluation of those candidates who have reached 70% of the Technical Evaluation will take place.

Step III: Financial Evaluation:

The following formula will be used to evaluate financial proposal: lowest priced proposal/price of the proposal being evaluated x 30%.

Award Criteria

The contact shall be awarded to the applicant whose offer have been evaluated and determined as:

Responsive/compliant/acceptable; and Having received the highest combined weight (technical scores) 70% + financial 30%= 100%.

Both individual consultants and individual employed by a company or institution are welcome to apply. 

Any individual employed by a company or institution who would like to submit an offer in response to a Procurement Notice for IC must do so in their individual capacity (providing a CV so that their qualifications may be judged accordingly). Women candidates or women-owned businesses are strongly encouraged to apply.

Authorship and Acknowledgement                                                     

CGAP and UNCDF staff will generally be listed as the authors of any publication or other communication that is produced as a result of the research conducted during the appointment.  The Consultant’s contribution in conducting this research may be acknowledged in any such publication. If, in the reasonable view of the Task Managers, the Consultant contributes significantly to the conceptualization and drafting of any documents created, the Consultant will be listed as co-author, along with the relevant CGAP/UNCDF staff.

Ownership/Control of Work Product/Publication    

All materials produced or acquired during the appointment - written, graphic, or otherwise - shall remain the property of CGAP and UNCDF unless and to the extent such rights are explicitly relinquished (in whole or in part) by CGAP and UNCDF, in writing. CGAP and UNCDF furthermore retains the exclusive right to publish or disseminate reports arising from such materials.  In the event of early termination of the contract, the Consultant shall, if requested by CGAP/UNCDF to deliver to it copies of all materials and data developed with CGAP funds.  Any material developed by the Consultant under these TORs may not be used without written prior approval by CGAP/UNCDF the Task Manager.