Country: Somalia
Organization: CARE
Closing date: 19 Apr 2022

Assignment Title



Somali Resilience Programme (SomReP): Consolidating Resilience Gains in Somalia

Type of Contract


Project funded by

SDC through SOMREP World vision


25th April 2022- 24th April 2023

Submission Deadline

19th April 2022

Duty Station


  1. About CARE Somalia

Since 1981, CARE Somalia has been implementing emergency relief and lifesaving assistance, recovery and development programs across Somalia targeting ultra-marginalized groups . Some of CARE’s main program activities since then have included rural and urban initiatives focusing on food and nutrition security, inclusive governance, education, women empowerment, WASH and other lifesaving humanitarian interventions. CARE works in partnership with Somali and international aid agencies, civil society leaders, local authorities and private sector actors . CARE has most recently broadened its work to include rural women economic empowerment initiatives, resilience and climate change , humanitarian response and sexual and reproductive health.

This consultancy call is hence a first of many efforts to strengthen the economic resilience of Small holder farmers by facilitating the designing and provision of tailor made pro-poor financial products to boost agriculture production CARE Somalia is currently operational in the northern regions of Puntland and Somaliland. For more information, visit

2. Background

CARE Somalia intends to find better ways to leverage collective sectoral expertise and long-standing relationships with communities to tackle the challenges facing agricultural practicing families in Somalia. Unpredictable weather patterns have negative impact on farmers’ production. Presently, there are limited pro-poor finance products for smallholder producers in rural areas especially those in hard-to-reach rural settings. The Success of the agriculturally-led economic development approach in Somalia relies heavily on equipping farmers with necessary skills and knowledge to allow them entry to the market system, and engage government, the private sector and other enabling enterprises.

Amidst the dwindling number of farmers and fragmented landholdings, steps must be taken to make farming more profitable – enabling a transition from subsistence farming to commercial agriculture. Thus, agriculture needs to be seen within the framework of an intricate and holistic value chain with the interlinked elements of which access to finance is critical for the growth of the agriculture sector. The shift from subsistence to commercial agricultural production requires fund and a combination of good laws, a specialized financial sector and profitable businesses of small, large farmers and companies in the agriculture sector. However, where agriculture is a source of livelihood financing for investments in agriculture is scarce, even for large investors. Financial institutions are reluctant to accept the risks prevalent in the agricultural sector, such as droughts, floods, pests and diseases, or the transaction costs of covering large geographical distances. To map opportunity’s financial institutions, play a critical role within the value chain by providing loans for improved crop production and facilitating more efficient buying and selling relationships contract farming. Without financial access and sufficient yearly earnings, many farmers lose their annual potential income because they must gain quick access to cash to afford household expenses all year. To make ends meet until their crops are ready to be sold, many farmers are forced to borrow from unregulated moneylenders at exorbitant interest rates or sell their future harvest early at a reduced rate to receive the cash they need to survive. However, unlike in urban areas, rural clients often have no prior knowledge of how financial institutions work. Establishing this farm-firm linkage could help provide credit, assured market, remunerative prices, quality check, financial management information and extension services, particularly to small landholders.

3. Objective of Assignment

To address these challenges, CARE Somalia is looking for a suitable and reputable financial institution to facilitate the design and provision of a range of pro-poor agricultural financial products for small scale farmers. This initiative will complement other CARE business development services aimed at improving the viability of agriculture enterprises and sustainably improve food insecurity and meet the growing worldwide demand for food through contract farming.

4. The Scope of Work

The selected financial institution will be responsible for designing risk-informed financial package, tools, and techniques to protect and sustainably leverage contract farming and associated effects. The scope of work of the financial institution under this TOR shall include, but not necessarily be limited to the following:

Phase 1 – Validation and Feasibility

a) Identification of problems and known causes and effects of contract farming on agriculture performance, strengths, weaknesses, opportunities, and threats to the development of agriculture. Causes of problems may include, among others, policy issues (e.g., incentive structures), institutional (e.g., structures and capacity), governance issues, and investment issues (e.g., low or poor quality) that affect agriculture production and productivity.

b) Assessment of the uptake of contract farming in CARE supported contract farming scheme as well as examining the viability of contract farming

c) Examine and analyze methods of financing by mapping of existing sources of finance as well as assessing the dynamics of supply of formal finance products to pro-poor small holder farmers

d) Explore the potential existence of financial gaps, the needs for formal finance products for pro-poor small holder farmers and recommend Innovative and affordable way to bring banking services to sparsely populated and hard to reach farmers.

Phase 2 – Pro- Poor Financial Product Design/Review

e) Review or design tailor made and relevant financial strategies and products to support and strengthen contract farming and small holder agribusiness development. The package should embed insurance products, bill pay services and money transfer services, which help ensure the ease and safety of their financial transactions.

f) Propose Internal financing models linking farmers along the value chain based on their relationships, such as when a fertilizer company provides fertilizers and the farmer only pays the company after they have sold their harvest. This includes product financing, trade credits, input-supplier credits, marketing company credit and lead firm credits.

g) Propose external finance models linking farmers from outside the value chain—for example, a microcredit bank, Physical-asset collateralization:

h) Explore and recommend ways of reducing the risk of adverse price movements in an asset (hedging)which can be used as credit collateral

Phase 3 – Contract Farming Financing

i) Use technology to cost-effectively identify potential contract farmers, assess their households for financing and provide them with information and banking services.

j) Facilitate the provision of loans in line with the government rules and regulations and Offer a full suite of banking services to farmers to meet their financial needs.

k) Educate farmers on investment risk to stimulate innovation: Use a variety of financial mechanisms to reduce perceived risks and mobilize greater private sector investment, guarantee mechanisms, matching grants and social venture capital

l) Model the impact of direct finance using available instruments for savings, inclusive finance (Micro-finance), Leasing and factoring, Weather-based insurance, Credit guarantee schemes among others

5. Methodology

The financial firm will develop its own envisaged methodology for this assignment based on the scope described above. However, the financial institution will be expected to:

a) Conduct secondary review of existing finance products for small holder farmers

b) Adopt a participatory approach by involving participating farmers, implementing partners, government agencies and other stakeholders**

6. Key Deliverables of the financial institutions **

The main deliverables under this financial institution are:

a) An inception report, outlining preliminary findings of desk review of available data and analysis related to the topic including a draft work plan outlining timeline, detailed methodology, suggested criteria for selection of farmers, list of key resources, and refinement of mapping questions.

b) First draft of the report of the Validation and Feasibility study, recommended financial products tool kit and roll out process

c) PowerPoint presentation highlighting the key research insights

d) Final Report

e) Periodic Loan portfolio performance review reports

f) Provide Loan product developed

g) Loans disbursed

h) Credit management

i) Monthly loan disbursement,

j) Farmer training on credit risk management etc.

7. Timelines


Estimated Number of days


Inception Report including tools

2 days

27th April 2022

Stakeholder kick-off workshop

1 days

28th April 2022

First Draft Report including data sets, interview transcripts

5 days

3rdst May 2022

Validation workshop- Presentation to key stakeholders

3 days

6th May 2022

Final Report

1 days

7th May 2022

Periodic Loan portfolio performance review reports

12 days

19th May 2022


24 days

8. Financial institutions – Requirements

a) Relevant experience in Agri finance and digital finance in Somalia

b) Experience in rural agric financial product(s) development processes particularly designing and rolling out risk-informed financial package

c) Reputable and legal registered financial institution

d) Ability to work effectively and deliver all reports in English

9. Bid Submission:

All interested financial institutions are requested to submit technical and financial in separately attachment proposal as per the ToR by email to**:** Please indicate “Financial undertaking on contract farming” as the subject heading. Application deadline is 19 April 2022. Any canva

How to apply:

All interested financial institutions are requested to submit technical and financial in separately attachment proposal as per the ToR by email to**:** Please indicate “Financial undertaking on contract farming” as the subject heading. Application deadline is 19 April 2022. Any canvassing will lead to automatic disqualification.