Background Document

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The Better Than Cash Alliance is working in partnership with the Government of Indonesia, the Cocoa Sustainability Partnership (CSP) as the national affiliate of our member the World Cocoa Foundation (WCF), and Partnership For Indonesia's Sustainable Agriculture (PISAgro), to identify opportunities to boost efficiency and transparency in cocoa supply chains, improve productivity and the livelihoods of cocoa smallholders in Indonesia in order to support their participation in Indonesia’s growing economy and achieve inclusive growth and the achievement of the SDGs. In particular responsible digital financial services in the agriculture sector can advance Women’s Equality (SDG 5), reduce inequalities (SDG 10), help to eliminate hunger (SDG 2) and-Combat and Adapt to Climate Change (SDG 13) by helping farmers store and increase savings, cope with unexpected economic shocks, access more and cheaper finance for investment and facilitate more control over incomes.

This project seeks to build on our initial convening of both public and private stakeholders in Indonesia and to sustain and scale ongoing payment digitization initiatives in the cocoa sector globally whilst supporting the alignment of these initiatives with the Responsible Digital Payment Guidelines.

The purpose of this request for applications (RFA) is to support the partnership of the Government of Indonesia, the World Cocoa Foundation and the Better Than Cash Alliance, to understand how digitizing payments can lead to increased efficiency and improved incomes for cocoa farmers in Sulawesi. This will be done through action research focused on:

1. understanding of the needs of cocoa farmers in order inform the development of customized digital payments and by extension broader financial products and services
2. the key priorities for building a digital payments ecosystem, given the constraints of the rural infrastructure in order to support not only access but also use of responsible digital payments.

For this request for applications (RFA), UNCDF invites applications from registered entities with proven experience in conducting primary and secondary data collection including multi-stakeholder interviews, and strong analytical expertise in reviewing information. They need to have experience of facilitating multi-stakeholder workshops and providing action-driven recommendations based on innovative approaches. Also desired is prior experience in organizing multi-stakeholder workshops/events in Indonesia. The service provider needs to have experience working on access to financial services and should be able to demonstrate an understanding of FSP business models and their viability particularly in the last mile of Indonesia. Prior experience working in the cocoa sector or similar agricultural value chains will be an advantage

The expected outputs are:

Building Block 1: ‘Know your farmers’

1. Analysis of the financial journey of a cocoa farmer in typical cocoa growing cycle, with focus on:
   1. prevailing levels of use of digital financial products and services
   2. prevailing levels of financial and digital literacy among farmers
   3. the role, challenges and impact particularly for women farmer and or women and youth in cocoa-growing households
2. Identification of key digital payments use-cases such as mobile top-up, merchant payments (for farm purchases, other daily needs), receipt of social protection schemes (e.g., Family Hope Programme, fertilizer subsidy schemes) and other family welfare needs (e.g., school fees etc)
3. Assessment and if possible sizing (quantification) of the need for the broader suite of financial products and services for which digital payments can be enabling.
4. Analysis of the links and identification of the opportunities between digital payment and (i) broader access to finance for cocoa farmers and (ii) addressing the SDGs for cocoa farmers with particular focus on SDGs 5,7, and 11.

Building Block 2: ‘Enable farmers to spend funds and access services digitally by building a robust digital payments acceptance ecosystem’

1. Comprehensive mapping of financial services and payment providers (e.g., public banks, rural banks, etc) and other digital platforms (e.g., Grab, Gojek etc) if any and identification of key gaps with respect to serving the financial needs of cocoa farmers in Sulawesi
2. Analysis of national initiatives such as PAKD and P2DD as well as BI’s championship of QRIS, their regional execution in Sulawesi and identification of opportunities to leverage these opportunities for building a robust digital payments acceptance ecosystem in Sulawesi
3. Case studies/learnings from any past and current digital payment initiatives and pilots (either by way of existing digital platforms focused on smallholder cocoa farmers i.e., traceability, farm advisory etc. or stand-alone.

Recommendations and dissemination

1. Action-driven recommendations for cocoa companies, the financial service providers as well as Government and farmer support organizations that would have most impact on catalyzing digital payments in the cocoa value chain locally. These should incorporate expected results, the role and influence of the two key actors above as well as ancillary stakeholders and insights on costs of implementation and viability of FSP.
2. Sharing of lessons learned with relevant stakeholders in Indonesia and beyond.

UNCDF will contribute a grant up to USD 50,000 and will award one applicant.

For requests and queries, send an email to Isvary Sivalingam, isvary.sivalingam@uncdf.org and Momenat Al-Khateeb, momenat.al-khateeb@uncdf.org. The deadline to submit questions is 21 January 2022.

All applications must be submitted by 14 February 2022 at 23:00 Eastern Standard Time (GMT -5) on UNCDF online platform: https://apply.uncdf.org/prog/btca_rfa_indonesiascaling_responsible_digital_payments_in_indonesias_cocoa_sector

Guidance on how to apply to the Grant is annexed to the RFA.

To ensure successful application to the RFA, applicants shall consider the following notes:

• Click on “Save as a draft” and “Save and continue editing” while working online.
• Applicants can add collaborators to the application.
• For successful completion of the application, the applicant shall click on the button "Complete and Submit” of the application.
• Upon the successful submission, applicants will receive automated notification on the successful submission of their application.
• Guidance note on how to apply to the RFA is annexed to the RFA - Annex V (Guidance note on how to apply online using the E-investment Platform)

When applying to the application, applicants will require to complete the two stages:

• Stage 1 “Pre-screening Questions”:

Applicants will need to fill in the online pre-screening questions and upload the required documents “where needed”. Note that once the “Mark as completed” button is clicked, you can no further introduce any change to this section.

• Stage 2: “Main Application”

Under this section, applicants will provide information on the:

1. Address and information of their organization
2. There is a hyperlink “Technical Proposal Template”. Applicants shall click the link to download the proposal template; fill in the information required; click on the button “Upload a file” to upload the proposal.
3. CV template. The applicant will download the templates, fill in the information and upload the filled-in CVs.
4. Project Budget template. Applicants can download the budget template, prepare the budget and upload it to the platform.
5. Sign-off the Declaration of Conformity
6. Click on “Mark as Completed”.
7. Submit