Natural Extract Industries Ltd.
Terms of Reference (ToR)
Vanilla Value Chain: Reducing Smallholder Supply Risk Through Access to Finance – Tanzania
The deadline for submitting proposals to this Terms of Reference has passed.
This ToR has been created by Natural Extract Industries Ltd. specifically for work they they require to be done by a Service Provider. For a downloadable PDF document of the ToR click here.
For Q&As on this and the other two ToRs provided by Natural Extract Industries Ltd., please click here.
Section 1: Background
Project name: Vanilla Value Chain: Reducing Smallholder Supply Risk Through Access to Finance – Tanzania
Name of organization: Natural Extract Industries Ltd. (NEI)
Service(s) required to deliver project:
• Research and analysis on smallholder farmers (SHFs)
• Identification of financial services for SHFs
• Pilot testing of financial services for SHFs
• SHF Access to Finance (A2F) programme design
Project location(s): Tanzania: Arusha, Kagera, Kilimanjaro, Mbeya, Morogoro
ToR closing date: 31 January 2020 (13H00 UTC)
Submission instructions: Proposals are to be submitted through the Social License Platform (SLP) https://www.sociallicenseplatform.com/
Deadline for clarification questions: 24 January 2020 (13H00 UTC)
Answers to all of the clarification questions received from bidders will be posted on the SLP.
Clarification questions document: Vanilla Value Chain – Clarification questions
Background: Natural Extracts Industries (NEI), Ltd. is a vertically integrated vanilla agribusiness founded in 2011 and based in Kilimanjaro, Tanzania. NEI currently sources 100% of its product inputs from 5,000+ smallholder farmers (SHFs) in Tanzania and Uganda, and delivers extension services through a traditional field pyramid model.
In partnership with AgDevCo’s Smallholder Development Unit (SDU), NEI is conducting a research project to identify and pilot innovations to improve its supply chain operations efficiency. In order to scale and meet demand from its customers, NEI is seeking to reduce its cost-to-serve and increase its producers’ yields. This will be done through the creation of Vanilla Centres of Excellence (VCoEs), which will provide standardised but decentralised training to SHFs (incorporating learnings from behavioural research), as well as develop financial instruments for the SHF producers.
The project will aim to achieve 3 overarching objectives:
1) Increase SHF productivity through targeted training strategies;
2) Decrease SHF supply risk through improved access to finance; and
3) Scale service delivery to SHFs through Vanilla Centres of Excellence (VCoEs).
These 3 objectives will be implemented through 3 project workstreams. Third-party service providers will be hired to execute each workstream, with NEI serving as the programme manager across all 3 project workstreams.
This ToR posting is for project workstream 2 only; however, ToRs for all 3 project workstreams are available on the SLP at the links below. Qualified service providers are encouraged to apply for additional project workstreams via the SLP.
Workstream 1: Increasing Smallholder Farmer Productivity (link)
Workstream 3: Scaling Smallholder Service Delivery (link)
Section 2: Project Overview
The objective of this workstream is to decrease vanilla smallholder supply risk through improved access to finance for farming households. Many farmers need cash several months before the vanilla harvest season, incentivising them to prematurely harvest the vanilla and side-sell it to middlemen, as they deeply discount future income streams. This is one of the main challenges that NEI faces in securing higher volumes of good quality vanilla.
To mitigate premature harvesting, research will be conducted to assess farmers’ knowledge of financial products and the impact of access to finance. Financial instruments that could be suitable to meet their needs will be identified and piloted to inform deployment at scale.
The project requires the Service Provider (SP) to conduct four key activities:
• Assess SHFs’ knowledge of financial products and services, conditions for feasibility and the impact of access to finance on crop yields/quality
• Identify relevant financial services products and delivery partners
• Pilot relevant financial services for SHFs
• Identify opportunities and dependencies to scale financial services
Short-term outcomes of the project:
• NEI understands its SHFs’ knowledge/perception of financial services, and their key barriers to financial inclusion
• NEI understands the impact of access to finance on crop productivity, quality, and sustainability in SHF households
• NEI identifies relevant, affordable, and accessible financial products for its SHF network
• NEI identifies reliable third-party partners to deliver financial services to its SHF network
Number of longer-term outcomes of the project:
• Improved awareness of and access to financial services in SHF households, leading to:
o Smoother seasonal production cashflows
o Improved crop productivity and quality
o Decreased vulnerability to farmgate price volatility and crop theft
• Reduced SHF supply risk for NEI
Possible risks: SHFs are not interested in or do not have the time required to participate in research activities; minimal or no financial services exist in the Tanzania market that are suitable for SHFs; if suitable financial services exist, SHFs are hesitant to access new or additional lines of credit.
Project duration: February – November 2020
Possible follow on activities: Post-project monitoring and evaluation (M&E) of new A2F programme activities
SECTION 3: ACTIVITIES AND DELIVERIES
Activity 1: Assess knowledge, parameters and impact of financial products and services
The SP will interview SHFs to understand (i) their perception/ knowledge of financial products and services available in Tanzania; (ii) how limited access to financial services may be impacting crop yields and quality; and (iii) factors that enable or impede the uptake of financial products for SHFs (e.g. access to information, repayment terms, collateral requirements, etc.). Desk research should also be conducted to supplement interview findings. The SP will provide a written report outlining research findings, noting any regional differentiation, and provide preliminary recommendations for financial services which could be beneficial to/feasible for SHFs.
Activity 2: Identify relevant financial services products and delivery partners
The SP will conduct research to identify potential financial service partners for NEI’s SHFs. The SP will engage with financial service providers to identify relevant, accessible, and affordable financial services for SHFs.
Activity 3: Pilot relevant SHF financial services
The SP shall identify SHFs to pilot financial products identified in Activity 3. SHFs should only be linked to financial services whose credit terms and conditions are favourable to the needs and constraints of SHFs. The SP will monitor SHFs’ use of financial services and evaluate whether these services are resulting in beneficial outcomes or heightening risk / harm.
Activity 4: Identify opportunities and dependencies to scale financial services
The contracted SP will be required to take learnings from Activities 1-4 and identify opportunities and dependencies to scale financial services throughout NEI’s supply chain. The SP will provide a written report outlining the methodology, assessing the findings of all preceding activities, and identifying implementation strategies to scale recommended A2F services.
The form and timing of outputs may be discussed further upon contract award.
SECTION 4: SKILLS AND TEAM
The ideal SP will consist of a multi-skilled team with significant experience conducting qualitative and quantitative research, A2F product/partner scoping and pilot testing, and A2F programme design and M&E. The selected SP must have full mobility to visit NEI’s SHFs and their farms on their own accord. The selected SP should preferably be located in East Africa, or possess significant project experience (5+ years) in East Africa.
• Understanding and experience working in local context
• Experience in conducting both qualitative and quantitative research
• Understanding of how access to finance impacts crop yield and quality
• Understanding of financial services providers and products in Tanzania
• Experience developing pilot proposals for expansion to scale
The Proposal should highlight all experience that is relevant to this project.
SECTION 5: FEES AND SELECTION CRITERIA
Currency Selection: USD
Language selection: English
Upper fee limit: $50,000; Proposals will be considered on a value-for-money basis
Evaluation criteria % of total score
Technical Criteria 75%
(i) Understanding of the objective, activities and deliverables 10%
(ii) Quality and clarity of proposed approach, including how 35%
appropriate, feasible and innovative the methods proposed are
for undertaking the work
(iii) Ability of the SP to carry out the scope of work based on: 30%
(i) quality and depth of project team experience, and
(ii) experience with similar projects
Cost criteria 25%
(iv) Overall price 15%
(v) Realistic costing of the Proposal 10%
Language requirements: English; Swahili considered an asset
Budget requirements: Detailed budget by major cost category
Payment structure: Milestone/deliverable based
Reporting processes: Progress reports will be provided through regular phone calls or in-person meetings between NEI and the SP. Deliverables will be submitted in writing to NEI and the SDU; terms and timing of these deliverables will be further specified in the SP contract.
Desired frequency of reporting: Weekly/Biweekly/Monthly
Additional submission guidelines: CVs of project team members
SECTION 6: POLICIES
Conflicts of Interest
The SP is required to provide details of on any potential or actual conflicts of interest arising from other assignments or interests. This relates to those who are involved in the conduct of the procurement procedure or may influence the outcome of that procedure have, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence in the context of the procurement procedure.
The SP agrees to keep confidential all information that they receive, directly or indirectly from NEI, AgDevCo or any other stakeholder, as well as all analyses conducted on the basis of such information (collectively, the “Material”). The SP shall use the Material exclusively for the purpose of preparing deliverables relevant to this assignment. The confidentiality obligations shall not apply to information that is in the public domain. The SP shall only permit access to the Material to persons within their organization on a need-to-know basis. The SP shall explicitly inform such persons of the confidential nature of the Material prior to providing it to them and shall subject them to the same confidential obligations contained in these Terms of Reference.
There may be circumstances where NEI, AgDevCo or the SP may be required to exchange or process personal information. NEI, AgDevCo and the SP shall ensure that it only uses personal information when the law allows us to and in accordance with AgDevCo’s data protection policy (as amended from time to time).
Code of Conduct
AgDevCo, as an investor of UK Government funds, has very high expectations of the conduct of its staff and contractors. For details of AgDevCo’s code of conduct, including details of AgDevCo’s whistleblowing policy, please see our website: https://www.agdevco.com/about-us/code-of-conduct.html. In particular, the SP is required to abide by AgDevCo’s Responsible Business Principles referred to in the Code of Conduct.
AgDevCo has a zero-tolerance policy regarding bribery and corruption, money laundering and tax evasion.
AgDevCo is also committed to the health, safety and welfare of all those affected by AgDevCo’s work. The SP shall be responsible for the adequate management of health and safety risks to those working under its contracts and any other parties affected by its work, in line with AgDevCo’s expectations. The SP is required to provide details of its policies and procedures on health and safety, anti-bribery and corruption, anti-money laundering and anti-tax evasion.
If awarded, any AgDevCo contract will include contractual provisions on these matters.