Access to Finance Strategy Development Consultancy

Context and Core Functions / Responsibilities

Development of IOM Iraq’s Access to Finance Strategy and its subsidiary products, including the Theory of Change, Concept Note, and Implementation Plan.

Iraq’s Micro, Small, and Medium Enterprises (MSME) sector is critical to the country’s economic revitalization, particularly for absorbing unemployed returnees and Internally Displaced Persons (IDPs), rebuilding conflict-affected areas, and spearheading the economy’s transformation and adaptation to climate change. Despite its importance, MSMEs face significant challenges, including access to finance, limited technical and operational capacities, and an absence of tailored financial products and services for their growth and development.

IOM’s access to finance activities currently consists of a three-pronged approach that includes:

Providing financial support to MSMEs, in the form of conditional grants based on a customised business expansion plans, from IOM’s flagship programme Enterprise Development Fund (EDF), which mimics loan application processes employed by banks. (More information can be found at https://edf.iom.int)

Business Advisory and Development services, such as mentoring, bookkeeping trainings, and financial awareness sessions, as well as banking sessions with banks and other formal financial institutions providing financial products for MSMEs.

Providing capacity-building support to partner financial institutions. These approaches bridge the gap in access to financial services for MSMEs in Iraq by making promising businesses more ‘investment ready’ and appealing to financial service providers, while improving financial awareness and trust among MSMEs. Concurrently, they aim to sensitize the partner financial institutions on the realistic needs, capacity, and challenges of the MSMEs in accessing financial products, and co-operate in the development and establishment of financial products catered to MSMEs and business investments.

IOM is committed to evidence-based programming to facilitate access to finance for MSMEs in Iraq who are generating sustainable livelihoods to vulnerable populations. The organization uses context-tailored market analysis and mapping tools to identify gaps and opportunities and conducts rigorous research to evaluate the impact of its programming in collaboration with leading national and international universities. Partnerships with relevant government bodies, private sector organizations like Chambers of Commerce and the Iraqi Industries Federation, Micro-finance Institutions (MFIs) and business-to-business (B2B) workshops also play an important role in promoting the Iraqi financial and entrepreneurship ecosystem.

IOM is seeking an expert of Access to Finance, specifically within the context of developing or emerging markets in the Middle East, to bring these components together and develop a comprehensive strategy for Access to Finance for IOM Iraq. There is a strong need to conduct desk review and stakeholder consultations to fully understand the challenges and opportunities faced by MSMEs, financial institutions, governmental agencies, and the UN. Based on this, the consultant is expected to develop Theory of Change, Strategy, and Implementation Plan where the current activities as well as potential opportunities are integrated and interlinked to ensure that the multi-faceted aspects of access to finance for MSMEs are coherently targeted and addressed.

The proposed strategy should incorporate plans for sustainability, ensuring long-term viability and scalability to different regions or economic sectors in Iraq. Additionally, as humanitarian funding and grants modality is expected to continue to decrease in Iraq following the end of the war with ISIL in 2017, the Access to Finance strategy should identify the next steps of the development sector in ensuring a transition of the economy into formal sources of financing for MSMEs.

The consultant will contribute under the overall supervision of the Head of Transition and Recovery Division (TRD) for IOM Iraq and the Livelihoods Programme Coordinator, and under the direct supervision of National Livelihoods Officer.

Tangible and measurable outputs of the work assignment

The consultant will be hired to report on a daily rate to the total of 8 weeks (40 working days), with deliverables expected at the end of each week as below:

Week

Deliverable

Details

Week 1

1. Desk Review

• Review of IOM’s existing project documents, assessments, and reports on A2F;
• Review of national policies, frameworks, and reports on A2F, financial inclusion, and MSME development;
• Mapping of local actors, including NGOs, CSOs, UN agencies and private sector actors, who are active in A2F;
• Review of UNSCDF, IOM’s Country Mission Strategy, and other relevant frameworks related to UN’s work related to A2F in Iraq;
• Review of financial landscape of Iraq and the Middle East, with special focus on:
  • Financial products available for MSMEs;
  • MFIs and banks that include MSMEs and vulnerable populations in their customer base;
  • Start-up and digital economy;
  • Greenfinance;
  • Fintech, digital banking, and mobile bankling.
• Identify potential donors and partnerships to support the Access-to-Finance strategy.

Week 2

1. Inception Report

• Submission of a detailed methodology, work plan, and timeline for achieving the consultancy deliverables.

1. Stakeholder Engagement Plan

• A scheduled plan for holding consultations with relevant stakeholders, including IOM staff, MSMEs, financial institutions, government entities, and other local A2F actors.

Week 2-4

1. Stakeholder Consultations

• Conduct consultations with key stakeholders to inform the strategy, including key challenges and opportunities for IOM;
• Conduct interviews with IOM staff to understand the capacity, challenges and opportunities for IOM to implement A2F project in Iraq;
• Conduct interviews with key stakeholders, including MSMEs, financial institutions (including banks and MFIs), government entities, and ecosystem partners, to gather insights on existing barriers, opportunities, and priorities;
• Engage with women-led, start-up, and agricultural, and otherwise high-risk MSMEs to ensure their perspectives and unique challenges are incorporated.

Week 4

1. Theory of Change (ToC)

• Create a clear and concise Theory of Change that illustrates the pathways to achieving the program’s objective of providing access to finance for MSMEs in Iraq in order to facilitate provision of sustainable livelihoods for vulnerable populations affected by displacement, conflict and climate change.
• The ToC should define the linkages between activities, outputs, outcomes, and the overarching objective of inclusive economic growth, ensuring logical alignment with program objectives and stakeholder priorities.

Week 5

1. Draft A2F Strategy

• Develop a comprehensive and evidence-based A2F strategy tailored to the needs of MSMEs in Iraq, ensuring alignment with Iraq’s National Development Plan 2030, the United Nations Sustainable Development Cooperation Framework for Iraq, and IOM’s overall country strategy.
• The strategy should focus on bridging financing gaps for MSMEs, fostering financial inclusion, and supporting underserved groups, such as women-led businesses, displaced and returnee entrepreneurs, and conflict- or climate-affected communities, and start-ups. It should leverage the organization’s in-country expertise running a large-scale economic recovery programme and its global expertise on migration-related issues as a comparative advantage.

Week 6

1. Finalise A2F ToC and Strategy

• Based on consultative feedback from IOM, finalise the ToC and A2F strategy.

Week 7

1. A2F Project Concept Note

• Prepare an actionable concept note based on the developed strategy that can be presented for the purpose of fundraising and donor engagement.
• The CN should outline context and needs, proposed program objectives, outcomes, outputs, activities, risks, and partnerships.
• The CN should include an example of a results matrix or a logframe that outlines specific indicators to measure the achievements against targets, based on the ToC

Week 7

1. Implementation Plan

• Develop an Implementation Plan composed of actionable steps for the development, funraising and implementation of the CN and strategy, with key recommendations including stakeholder engagement, risk mitigation, and strategic resource mobilisations.
• Provide recommendations for aligning the strategy with global and regional donor priorities to maximize fundraising potential.

Week 8

1. Final Presentation

• Deliver presentations summarizing key findings of Desk Review, the A2F strategy, concept note, and Theory of Change, and Implementation Plan to various IOM staff, including senior management team, programme management team, project development team, and implementation team.

Performance indicators for the evaluation of results

1. Desk Review
   • Comprehensive and relevant analysis: the desk review identifies and analyses key insights, trends, opportunities, challenges, and gaps related to Access to Finance in Iraq
2. A2F Theory of Change
   • Logical coherence: The ToC clearly links inputs, activities, outputs, outcomes and impacts in a way that is logical and evidence-based.
   • Stakeholder alignment: The ToC reflects inputs from key stakeholders, and aligns with their needs, capacity, and objectives.
3. A2F Strategy
   • Creativity and innovation: strategically identifying opportunities and new project ideas based on gaps and opportunities, as well as incorporating latest developments of A2F sector
   • Actionability: The strategy outlines clear, practical, and achievable recommendations that is within the operational and technical capacity of the organisation.
4. A2F Concept Note
   • Clarity and simplicity: the Concept Note translates the Strategy and ToC into a concise project idea that is actionable and persuasive.

Education, Experience and/or skills required

• Advanced degree in economics, finance, business administration, or a related field.

• At least 7-10 years of experience in:

1. Access to Finance, microfinance, or financial inclusion in developing or recovering markets and/or in fragile or conflict affected contexts
   1. Financial setor in the Middle East;
   2. Engaging with UN agencies, financial institutions, MSMEs, and government entities.

• Proven expertise in:

1. Financial systems and SME financing mechanisms.
   1. Designing Strategies, Concept Notes (CNs) and Theories of Change (ToC).

• Excellent analytical, research, and report-writing skills.

• Familiarity with Iraq’s economic policies and regulatory environment (preferred).

• Awareness of cultural and socioeconomic context in Iraq (preferred).

Travel required (Yes/NO)

• It is envisaged that the consultant will travel to Iraq to conduct stakeholder consultations in person. However, IOM is willing to consider eligible candidates who are unable to travel and make reasonable accommodations on a case-by-case basis.

Languages:

• Fluency in English and Arabic are required.
• Any other language is advantage.

Competencies

Values

• Inclusion and respect for diversity: respects and promotes individual and cultural differences; encourages diversity and inclusion wherever possible.
  • Integrity and transparency: maintains high ethical standards and acts in a manner consistent with organizational principles/rules and standards of conduct.
    • Professionalism: demonstrates ability to work in a composed, competent and committed manner and exercises careful judgment in meeting day-to-day challenges.

Core Competencies – behavioural indicators

• Teamwork: develops and promotes effective collaboration within and across units to achieve shared goals and optimize results.
  • Delivering results: produces and delivers quality results in a service-oriented and timely manner; is action-oriented and committed to achieving agreed outcomes.
    • Managing and sharing knowledge: continuously seeks to learn, share knowledge and innovate.
    • Accountability: takes ownership for achieving the Organization’s priorities and assumes responsibility for own action and delegated work.
    • Communication: encourages and contributes to clear and open communication; explains complex matters in an informative, inspiring and motivational way.