EOI No: P1006-IRiS-G-OTH-NOFO-007
Title of the EOI: Administration of a Credit Guarantee Scheme
Issue Date of this EOI: November 27th, 2024
Closing Date for Receipt of EOI: December 5th, 2024, 11:59 p.m. EAT
1. Background
The Inclusive Resilience in Somalia (IRiS) Program is funded by USAID and FCDO. IRiS aims to increase household, business, community, and system-wide resilience through rural and urban livelihood diversification and promoting inclusive economic market systems. Implemented across targeted USAID’s Geographical Focal Zones (GFZ), IRiS works with various institutions and partners to deliver flexible and context-relevant interventions at the Community, State, and Federal levels.
2. Purpose for Expression of Interest
The Inclusive Resilience in Somalia (IRiS) program invites Expression of Interest (EOI) from Banks or/and Microfinance Institutions that are licensed and regulated by the Central Bank of Somalia to implement a loan guarantee scheme to partially underwrite the risk of loans issued to MSMEs within the crops, livestock, fisheries, and energy sectors under IRiS Project in Somalia. Thought this partnership, IRiS will provide funds (through a grant) to qualifying Financial Institutions/FIs to derisk a pipeline of loans to MSME borrowers in the IRiS targeted sectors.
1. Eligibility Criteria for applicant Financial Institutions
i. Be licensed and regulated by Central Bank of Somalia.
ii. Be legally registered and operating for at least three years in Somalia.
iii. Have a proven track record and experience of MSME lending in Somalia, particularly to individuals and businesses in the IRiS geographical Focal Zone (GFZ) indicated on the above map.
iv. Have a proven track record of lending to the MSMEs in the productive sectors of agriculture, livestock, and fisheries.
v. Have prior experience in implementing loan de-risking / credit guarantee mechanism.
vi. Offer up to a six-month loan repayment grace period.
vii. Apply a competitive annual cost of finance charge (preferably not more than 9%).
viii. Offer loan sizes of more than 50,000 USD / Somalia Shilling equivalent.
ix. Propose a portfolio of MSME loans for guarantee ranging from $1.5 million to $ 4 million / Somalia Shilling equivalent.
x. No guarantee fund management fee to be charged to the borrower for loan de-risking under the gu
xi.
xii.aranteed scheme
xiii. Activity’s anticipated implementation period
Over the period Jan 2025 – July 2027
Required documentation for submission -
To be considered under the expression of interest process, applicant Financial Institutions should submit a complete set of documents as listed below, no later than the closing date and time indicated above. Applicants should ensure that the documents are well-written and complete, easy to read and follow, and contain only the requested information.
1. Submit an official Letter of Interest (LOI) in response to this EOI, stating how they meet the above requirements in full and would like to receive the official RFA.
2. Submit a valid registration certificate from Central Bank of Somalia.
3. Submit a valid Tax Compliance Certificate.
4. Submit one contract from a similar guarantee scheme assignment previously conducted.
5. Three reference contact details for a similar activity which you have previously conducted.
6. Two recommendations from previous donors/partnerships activities implemented.
7. Organizational profile.
8. Organizational articles of association.
9. Organizational financial, procurement, and human resources policies.
2. Selection process.
The applicants’ selection process will be competitive and in line with DT Global’s grant selection procedure. Subsequently, shortlisted applicants will receive an official request to submit full applications through Request for Applications (RFA). Shortlisted applicants will be subject to vetting, reference checks, and pre-award capacity assessments. Only shortlisted applicants will be contacted.
3. Application process
Those interested in participating in the process should forward their expression of interest to iris.grants@dt-global.com by Thursday, 5th December 2024.
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