Calls for Applications
Call for Application: NGO to Support Agri-Business SME Financing in Uganda Under START Facility Phase II
-
August 29, 2024
-
Calls for Applications
Summary
Call for Application: NGO to Support Agri-Business SME Financing in Uganda Under START Facility Phase II
Opens
Aug 27 2024 00:50 (EDT)
Deadline
Sep 13 2024 23:59 (EDT)
Value
$1,500,000.00 to $2,000,000.00
Through this call for proposal, UNCDF seeks to engage an NGO to support financial institutions in Uganda to increase access to finance for agri-business SMEs under the START Facility Phase II through deployment of derisking instruments including portfolio guarantees.
The SME sector in Uganda accounts for approximately 90% of the entire private sector, over 80% of manufactured output and contributes about 75% to the gross domestic product (GDP). The sector employs more than 2.5 million people, equivalent to 90% of total non-farm sector workers, and comprises about 1,100,000 enterprises which makes the sector one of the largest employers in the country. Most SMEs are largely concentrated in the major urban and peri-urban areas of Uganda and rely on rural communities for raw materials. Agri-business SMEs are pivotal to the growth and transformation of the country to the middle-income status.
Agri-business SMEs present a sustainable and empowering response to the persistent challenge of unemployment and underemployment in addition to creation of market for primary agricultural products and enabling national economic structural transformation. Yet, these SMEs face various growth and survival constraints on several fronts which undermine their development, thereby limiting their impact on the economy.
For many agri-business SMEs, growing their business enterprises remains a distant dream since they lack access to appropriate and affordable financing. Most agri-business SMEs are considered risky and less profitable by most financing institutions in the country and are rarely prioritised for investment. This situation is even worse with the high risk and high impact agri-business SMEs, who are the focus of the START Facility.
UNCDF is looking for NGOs that have existing relationship / networks with financial institutions / lenders in Uganda to leverage their network of partner financial institutions / lenders to unlock financing to risky but high impact agri-business SMEs under the START Facility. This will ensure that START Facility Phase II works with more financial lenders compared to START Phase I that had one financial partner.
The selected partner is expected to work with UNCDF in the delivery of Outcome 3 of this project: Unlock affordable medium-term finance for agri-business SMEs in value addition and responsible agro processing.
The implementation of the START Facility mechanism is well aligned to the UNCDF’s Strategic Framework 2022-2025. The Facility fully integrates the UNCDF investment continuum concept which is critical in enhancing the holistic approach conceived within START I. The intervention will mainly contribute to outcome 2, additional finance mobilised and catalysed (in particular OC 2.1 a) US$ value of finance mobilized in association with UNCDF investments) and output 2.1, the number and estimated US$ value of opportunities that are investment-ready following UNCDF support. The proposed action will support implementation of key priorities of New European Consensus on Development, i.e. Planet and Prosperity and will support achievement of Agenda 2030 through the following Sustainable Development Goals (SDGs): SDG1, SDG2, SDG5, SDG7, SDG8, SDG13 and SDG 17.
The overall objective of the work described in this call is to incentivise accredited financial institutions / lenders to extend credit to high impact agri-business SMEs across the country to further value addition and agro processing.
Specific Objectives:
- Onboard at least 10 lenders to support agribusiness SMEs under the START Facility.
- Develop / customise an incentive structure for accredited financial institutions including portfolio guarantees and any other incentives that will unlock US$ 20m in financing to at least 250 loans or more to agribusiness SMEs while creating /retaining jobs and market for smallholder farmers.
- Approve eligible loans in accordance with the START Facility criteria and evaluate default claims submitted by accredited lenders to determine eligibility to benefit from financial incentives, including first loss cover (FLC).
***
How to Apply:
Please submit your proposal through our e-investment platform here. Incomplete submissions or submissions using other templates or sent by other electronic or non electronic means will not be eligible.
For more information please download the following documents:
- Terms of Reference (TOR) Document
- Instructions to TOR Applicants
- Technical proposal template
- Budget template
- CV template
- Template Agreement to be signed by UNCDF with the selected Responsible Party
- Partner Capacity Assessment Template – depending on the value of the grant
- Micro Assessment – depending on the value of the grant
- START Facility Phase II Project Document
For queries write to the following address: queries@uncdf.org with the following subject: 240823 - UGA - Engagement of NGO to support financial institutions in Uganda to increase financing to agri-business SMEs under the START Facility Phase II.
-
Category: