Terms of Reference (ToR): Consultancy Services to Facilitate the Establishment or Transformation of a Class 'D' Financial Institution in Nepal

Terms of Reference (ToR)

for

Consultancy Services to Facilitate the Establishment or Transformation of a Class 'D' Financial Institution in Nepal

1. Background

Heifer International Nepal is dedicated to ending hunger and poverty while caring for the Earth. Since its inception in 1957, Heifer has impacted the lives of over 400,000 families through agriculture and livestock programs, focusing on empowering rural women. By creating Self-help Groups and Social Entrepreneur Women’s Cooperatives (SEWCs), Heifer helps build resilient communities and sustainable livelihoods. With a holistic approach, Heifer collaborates with local governments and partners, engages youth to improve agricultural practices, supports women-led cooperatives, and creates lasting economic change. Its mission is to ensure families achieve sustainable living incomes, with access to food, shelter, education, and healthcare, while driving progress toward more inclusive and resilient agri-food systems

Social Entrepreneur Women’s Alliance (SEWA) Nepal is a national organization dedicated to enhancing sustainable livelihoods for women entrepreneurs, smallholder farmers, and marginalized communities through agriculture and livestock enterprises. Established as an apex body, SEWA Nepal represents over 200 Social Entrepreneur Women’s Cooperatives (SEWCs), encompassing a network of 200,000 members across six provinces in Nepal. It’s one of the score missions is to improve access to affordable and sustainable capital for SEWCs and their members.

In pursuit of this mission, SEWA Nepal recognized the need for an alternative financing mechanism. This led to the feasibility study of establishing a "D" class financial institution or transforming an existing "D" class financial institution to align with its objectives. The independent studies conducted have proposed two distinct pathways for achieving this goal:

1. Establishing a New "D" Class Financial Institution in Karnali province: Creating a dedicated financial institution that aligns with SEWA Nepal’s vision and provides tailored financial solutions to SEWCs and their members.
2. Collaboration or Transforming an Existing "D" Class Financial Institution whose vision and operational focus align with SEWA’s aspirations: Identifying and buying or restructuring an existing institution to meet the needs of SEWA Nepal’s network, enabling more efficient and sustainable financial services delivery.

These pathways represent a strategic approach to addressing the financing challenges faced by women entrepreneurs and marginalized communities while fostering economic empowerment and sustainability.

To operationalize these options, awareness rising among its board members, provincial chapters, and cooperative members is needed, ensuring their willingness, readiness, and ownership throughout the process. Decision-making will rest primarily with SEWA and its member cooperatives, supported by evidence-based recommendations and participatory workshops.

Heifer International Nepal, serving as a facilitator is seeking a qualified consultant to facilitate the entire process and develop a comprehensive support package for any feasible option i.e. the potential establishment of a Class 'D' financial institution or a clear pathway to the desired outcome. This includes assessing current situation, legal compliance, and financial readiness while providing actionable recommendations aligned with Nepal’s policies and national financial inclusion goals.

2. Objectives

The primary objective of this consultancy is to facilitate the establishment or transformation of a "D" class financial institution to enhance access to affordable and sustainable financing for Social Entrepreneur Women’s Cooperatives (SEWCs) and their members. 

The specific objectives include:

• Assessing the feasibility of establishing a new "D" class financial institution in Karnali Province or transforming an existing one to align with SEWA Nepal’s mission.
• Raising awareness among SEWA board members, provincial chapters, and cooperative members to ensure their engagement, readiness, and ownership.
• Develop actionable recommendations and a strategic roadmap for operationalizing the selected pathway, ensuring alignment of the proposed financial solutions with national financial inclusion policies and goals.

3. Methodologies

Phase 1: Inception and Planning (2 months)

• Desk Review: Study relevant policies, regulations, and financial inclusion goals in Nepal, as well as SEWA Nepal’s operational and financial structure.
• Stakeholder Mapping: Identify and engage key stakeholders, including SEWA board members, cooperatives, government agencies, and financial institutions.
• Inception Workshop: Conduct a workshop with SEWA representatives and Heifer International Nepal to refine the scope and methodology.

Phase 2: Situational Analysis (3 months)

• Further evaluate the findings of past studies including but not limited to financial, legal, and operational readiness for establishing or transforming a "D" class financial institution.
• Assessment Existing Market: Analyze the demand for financial products, the competitive landscape, and the needs of SEWCs and smallholder farmers.
• Risk Analysis: Identify potential risks, including financial, regulatory, and operational challenges.

Phase 3: Stakeholder Engagement (5 months)

• Awareness-Raising Workshops: Facilitate participatory workshops with SEWA board members, provincial chapters, and cooperative members.
• Focus Group Discussions: Gather insights from SEWC members and other stakeholders on their financial needs and expectations.

Phase 4: Pathway Development (3 months)

• Option Analysis: Compare the feasibility of establishing a new "D" class institution versus transforming an existing one.
• Strategic Roadmap: Develop a detailed plan, including timelines, required resources, and potential partnerships.

Phase 5: Recommendations and Final Reporting (2 months)

• Actionable Recommendations: Provide evidence-based recommendations aligned with Nepal’s prevailing policies and SEWA’s aspirations.
• Validation Workshop: Present findings and gather feedback from SEWA and Heifer International Nepal.
• Final Report: Deliver a comprehensive report with key findings, recommendations, and subsequent steps.

4. Deliverables

Following measurable Key Performance Indicators (KPIs) are envisioned for each phase to ensure accountability and track progress effectively.

Phase one:

• Inception Report: Detailed work plan, methodologies, and stakeholder engagement strategy.

Phase two:

• Situational Analysis Report: Findings from the feasibility study, market assessment, and risk analysis.
• Complete a comprehensive assessment report on the financial, legal, and operational readiness for establishing or transforming a "D" class financial institution, including:
• Assessment of market demand for financial products, competitive landscape, and the needs of SEWCs and smallholder farmers.
• Identification and analysis of at least five key risks (financial, regulatory, operational) with actionable mitigation strategies.

Phase three:

• Awareness-Raising Materials: Develop required workshop materials e.g. presentations, handouts, and key messages tailored for SEWA stakeholders and facilitate five workshops.
• Option Analysis: Suggest one viable option comparing the feasibility of establishing a new "D" class institution versus transforming an existing one (recommend top two “D” class banks).

Phase Four:

• Strategic Roadmap: Detailed plan for establishing or transforming the "D" class financial institution.

Phase Five:

• Final Report: Prepare a comprehensive document summarizing all findings, analyses, and actionable recommendations.

5. Expected Outcomes

A clear, evidence-based decision on whether to establish a new "D" class financial institution or transform an existing one.

• Strengthened awareness and readiness among SEWA board members, provincial chapters, and cooperative members.
• A strategic roadmap for SEWA Nepal to enhance financial access for SEWCs and their members.
• Alignment with Nepal’s prevailing national financial inclusion policies and sustainable economic development goals.

6. Consultant Qualifications

• A master’s degree in economics or an equivalent field. A foreign degree would be an advantage.
• Proven expertise in financial literacy, financial inclusion, cooperative development, or microfinance.
• Fifteen or more years of experience in Nepal’s financial sector. 
• Strong understanding of Nepal’s regulatory environment for financial institutions.
• Prior experience in conducting feasibility studies, strategic planning, and stakeholder engagement (preference will be given to those who have worked with Heifer).
• Excellent communication and facilitation skills.

7. Responsibilities of Heifer International Nepal

• Heifer International Nepal will provide guidance and oversight for the entire process, ensuring alignment with strategic objectives and ensuring expectation of SEWA, SEWC and their members.
• Heifer together with SEWA and SEWCs will organize workshops, training sessions, and mentoring programs for cooperative leaders and members.
• Heifer will guide in building relationships with potential “D” class banks, including pitch the idea and deal making together.
• Heifer will supervise and oversee the establishment of the M&E system, ensuring proper development of meeting minute, periodic reporting, and course correction where need.

8. Counterpart Personnel

• BD and A2F Lead will supervise the consultant, whereas Sr./Program Managers for strategic oversight and coordination.
• Regional Field Teams for provincial and SEWC level meeting and workshops.

9. Competency Requirements for Consultant

The consultant/team should possess the following qualifications.

• Proven experience in meeting and workshop facilitation technical backing experience in banking industry, banks supervision, cooperative capacity assessment, deal making, and capacity building.
• Expertise in financial analysis, business planning, and proposal development.
• Familiarity with Nepal’s banking industry, women entrepreneurship, agricultural, financial, and cooperative sectors.
• Aware of importance of gender-sensitive financial practices aligning with SEWA Nepal’s objectives.
• Ability to produce high-quality reports and documentation in English.
• Experience working with but not limited to NRB, Heifer, donor-funded projects and impact-driven initiatives.

10. Duration of Assignment 

The assignment will span 16 months, from Mid-February 2025 to July 2026. In addition to phase wise deliverables, quarterly progress reports will be submitted to update Heifer team, Cooperatives and other stakeholders on key activities and achievements. The periodic report of each assignment, summarizing all activities, outcomes, and recommendations, will be submitted by end of each assignment and the final report by 20 June 2026. If any delays happened during this period, an adjustment will be made upon mutual agreement between the consultant and the organization.

11. Heifer’s Input 

Heifer shall provide relevant information, project document and resources to the consultant and facilitate coordination between the consultants and concerned stakeholders/institutions as and when necessary. The Heifer shall provide logistical support (food, accommodation and transport etc. as per Heifer policy) to the consultant during the execution of consultancy service. Heifer shall designate a primary contact person who will act as professional and support counterpart personnel to the consultant team for any necessary assistance. The consultant shall work closely with her/him and the concerned team members for quality deliverables. 

12. How To Apply

Interested individuals should submit their application including below mentioned documents by 5:00 pm, 11th February 2025 to Procurement-NP@heifer.org with the subject line mentioning “Consultancy Services to Facilitate the Establishment or Transformation of a Class 'D' Financial Institution” in Nepal.

• Cover letter highlighting relevant experience and expertise
• CV 
• PAN registration certificate

Note: VAT registered individual consultants are encouraged to apply. 

Any telephone inquiries or other inquiries would not be entertained. However, after selection of the consulting firm a kick-off meeting will be organized with the service provider.

Heifer reserves the right to accept or reject any proposal and to annul the selection process and reject all Proposals at any time prior to contract award, without thereby incurring any liability to affected individuals.