Terms of Reference Conducting Diaspora Remittances Mapping in Kenya

Background of the Project 

Swedish International Development Agency (SIDA) through its support to Pangea Trust launches a Diaspora fundraising project that seeks to increase deployment of diaspora remittances and networks to provide investment capital to Kenyan MSMEs and startups.  The process requires the creation of the conditions necessary for safe and seamless movement of capital and other resources from the diaspora to viable MSMEs and promising start-ups in a formal and structured manner.

Kenya’s diaspora remittances in the year 2019 were estimated to be approximately USD 2.855 Billion, a significant amount, by any standards. While the amount of inflows and their countries of origin are well documented and well known, there appears to be no specific studies and data in the public domain on the uses to which the remittances are put, locally. The widely held view, however, is that such remittances are primarily directed at consumption and social support, which is not sustainable. The sums committed to investment, moreover, tend to be more destined for personal or family development with only a few resources set aside for business investment. Even then, diaspora investors are known to face challenges relating  to  dearth  of  information  on  viable  investments  and  the  little information available is often insufficient to prevent losses due to lack of proper due diligence, professional services and investment appraisal because of unstructured engagement.

In partnership with SIDA, diaspora influencers and other stakeholders, Pangea will use a comprehensive, coherent and integrated approach to achieve the project’s key objectives of activating diaspora remittances and networks as a sustainable source of financing  and capital  for  MSMEs  and start-ups in  Africa generally and specifically in  Kenya, Ethiopia and Somalia.

Project Objectives

To activate diaspora remittances and networks as a sustainable source of financing and capital for start-ups and MSMEs in Kenya to drive job creation and enhance entrepreneurial capacity and opportunities

The above objective is to be achieved through innovative   approaches beyond todays development collaboration. This will include innovative financing solutions such as diaspora fund, Matching fund, challenge fund, accelerator fund guarantee fund etc with catalytic effect to support MSME’s and startups to create sustainable jobs.

Diaspora mapping report

This assignment intends to develop a mapping report to analyze diaspora remittance to Kenya, by identifying how remittance is being allocated in terms of consumption, investment and other areas. The mapping report will be developed to provide better insight to the development sector and other stakeholders in how the diaspora can play a bigger role in supporting MSMEs.

The proposed Assignment.

Kenya’s diaspora remittances in the year 2019 were estimated to be approximately USD 2.855 Billion, a significant amount, by any standards. While the amount of inflows and their countries of origin are well documented and well known, there appears to be no specific studies and data in the public domain on the uses to which the remittances are put, locally. 

This constrains the potential of this resource for the facilitation of access to finance, especially for MSMEs and start-ups who greatly need the same, and as an engine for sustainable development.   At the heart of the problem is information asymmetry and the absence of a structured market for the deployment of diaspora remittances for investments. There is no formal mode of engagement in Kenya to link the diaspora, and activate its networks and remittances,  with  viable  local  businesses  that  require  investment  capital  to  scale.

In view of the above, Pangea, with support from SIDA is therefore looking for a consultant to conduct a diaspora data mapping of inflows of the remittance, identify diaspora segment driving the remittance from the country of origin, documenting the factors fuelling the remittance.  Detail the uses to which the remittances are utilised for locally in Kenya and establish primary use of such remittances, indicating what sums are committed to investment in the start-ups and MSMEs businesses.

Scope of Work

The assignment will involve the following; 

  • A detailed review of secondary information and literature on diaspora remittances
  • Development of research methodology and data collection tools and inception report. 
  • A detailed analysis of inflows of the remittance from country of origins, disaggregating the sender’s data including sex, age, and average amounts.
  • Development of a research protocol for submission to the ethics and review board if needed
  • A clear determination of the extent/scope of diaspora segment driving the remittance from the country of origin, documenting the factors fuelling the remittance.
  • A detailed analysis of the inflow of the remittance from Islamic communities, factor driving remittances, and guiding framework. 
  • A clear analysis of diaspora applicable channels of remittance such as western union, world remit, banks transfer, Mpesa, etc, providing a comparative examination factoring volume of transfers, associated costs of transfer for each, with a clear conclusion on potential approach that is most preferred and why, for this project to enhancing the level of value, usefulness, affordability, and trust which are pillars of this project. 
  • A clear analysis of diaspora knowledge, attitudes and beliefs appertaining to remittances use, their potential roles and opinions appertaining to how diaspora investment can be structured.
  •  A clear determination of cultural, economic social and political causes that drives diaspora remittances and usage and establish primary use of such remittances including Islamic communities, indicating what sums are committed to investment in the start-ups and MSMEs businesses.
  • A detailed analysis of the extent of COVID-19 impact on diaspora remittances, capturing opportunities and challenges 
  •  A detailed examination of country-specific policy processes guiding diaspora remittances in Kenya. 
  • A map of stakeholders including public, private and civil society or non – state actors including Islamic communities in Kenya, and their involvement in diaspora remittance space, and all ongoing interventions relating to activating diaspora remittance to fund startups in Kenya.   Including beneficial partnership covering financial service providers and Telco such as Safaricom, Telkom and Airtel and their interest partnering with payment platforms.
  • A detailed examination of the progress made so far, achievements of such interventions and gaps and or challenges including the Islamic communities.

Specific Tasks 

The following are the specific tasks for the consultancy: 

  1. Review existing secondary information and literature on diaspora remittances 
  2. To develop and present an inception report with data collection plan and design.
  3. To develop all data gathering tools required  for  quality  data  collection  in  close consultation with the Pangea and SIDA project team and pretest them.
  4. Develop a research protocol and submit the same to the ethics and review board
  5. Develop relevant data collection tools required for quality data collection in close consultation with the Pangea team.
  6. Train, manage and supervise data collection teams
  7. Organize and implement the survey to ascertain the levels of diaspora remittances inflow, identify diaspora segment driving the remittance from the country of origin, documenting the factors fuelling the remittance.  Detail the uses to which the remittances are utilised for locally in Kenya and establish primary use of such remittances, indicating what sums are committed to investment in the start-ups and MSMEs businesses.
  8. Compile and collate the data collected, both qualitative and quantitative.
  9. Prepare and present a report of the survey with inputs from Pangea and SIDA team. 
  10. Participate in the dissemination of the finding to SIDA and Pangea and key stakeholders.

Expected Deliverables

  • Inception report: detailing the objectives of the study, key questions that the study will address and how the study will be conducted, including timelines and workplan
  • Analytical methodology and approach 
  • Draft report
  • Desk review report
  • Workshop and workshop materials- I suppose the consultant will organise a small workshop to run us through their findings
  • Final report 
  • Blog/article, and PowerPoint presentation of findings etc.

The intellectual property generated out of this engagement will be passed on exclusively to the contractor.

Technical Proposal

Interested consultant(s) and/or agencies Must provide the following information –

a) A statement on consultant’s or firm’s capabilities including: 

  • Consultant(s) or agency profile outlining areas of expertise. 
  • Evidence of undertaking similar assignments in the recent past.
  • Any direct or relevant past experience of undertaking similar initiatives.
  1. A brief 3 pages proposal of the understanding and interpretation of the TORs and the scope of the work, outlining the approach and plan to accomplish the assignment.
  2. Names and CVs of the professionals who will be involved in the study
  3. A proposed timeline indicating activities/sub-activities to be undertaken and the corresponding outputs.

The bids will be weighed against criteria drawn from consultant’s expertise and experience, evidence of conducting similar assignment in the past, consultant understanding and interpretation of the subject matter, scope and suitability of the proposed approach and plan and the budget.  

Competencies and qualifications of the consultant

  • Proven ability to demonstrate innovate thinking and previous experience working innovative financing for MSMEs and startups and digital platform 
  • Substantive knowledge of diaspora remittance as a thematic area
  • Ability to work independently to strict timelines
  • Ability to contribute to and comfortably work in a multi-disciplinary setting
  • Excellent planning and facilitation skills
  •  Cultural awareness and sensitivity and contextual knowledge of diaspora remittance as a thematic area 
  • Strong interpersonal team work and communication skills 
  • Excellent written and spoken English skills and sound reporting skills. 

Qualifications

  • A minimum of a Masters’ degree any other related field.
  • 7 years’ experience in conducting research (particularly in this kind of research) 
  • Proven understanding of the innovation eco-system in particular innovative financing, and diaspora remittances.

Financial proposal

Interested consultant(s) and/or agencies should provide an estimated daily rate for the proposed assignment based on the timelines provided.

Time line 

The Consultancy is expected to take a maximum of 30 days and shall be undertaken between the months of November and 31st December 2020.

Submission of applications

“This document has been financed by the Swedish International Development Cooperation Agency,
Sida. Responsibility for its contents rests with Pangea Trust.”

On or before 27th November 2020, through info@pangeaaccelerator.com email reference being “Diaspora Remittance Mapping”

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