Terms of Reference Business Development Service for MSMEs and Startups – 2

ABOUT FIRST CONSULT 

First Consult is a leading economic development consulting firm implementing projects in Ethiopia. Founded in 2006, First Consult (FC) has grown to design and implement projects across the agriculture, manufacturing, and service sectors. Our multidisciplinary teams combine a capacity to execute with clarity of the local context. As a result, we have delivered at-scale real impact in terms of jobs creation, business formation, business growth, and investment attraction and mobilization.

MESMER PROGRAMME

Micro, Small and Medium Enterprise Recovery and Resilience Program (MESMER) is a 5-year program launched in October 2022 to support 72,200 MSMEs (including start-ups and informal enterprises) and 410,800 jobs by creating access to finance for micro, small and medium enterprises (MSME)’ to realize their growth prospects and resilience. MESMER will also work to provide support to MSMEs through business development support, psychosocial services and technical assistance to financial institutions. MESMER is a countrywide program implemented by First Consult in partnership with the Mastercard Foundation as part of the Foundation’s Young Africa Works strategy and will strive to create dignified and fulfilling work for the youth, the majority of them women.

The project is following a four-pronged approach to meet its objectives: a) Grants and soft loans to MSMEs through a risk-sharing liquidity fund arrangement, b) Technical assistance to financial institutions, c) Business development services, d) Psychosocial support. The FDRE Ministry of Labour and Skills will be the main government counterpart for the program. Other partners include financial institutions (microfinance institutions, banks, and digital financial service providers), BDS, and psychosocial support providers.

BACKGROUND OF BDS PROVISION

MSMEs face several problem including but not limited to knowledge gap in business operation and management, lack of working premise, petite information, limited access to finance, absence of useful business network, weak support system and access to market, high exposure to stocks such as conflict, inflation, and other macroeconomic challenges. In an effort to build a dynamic and resilient economy, efforts have been put in place by several stakeholders to support and promote MSMEs to ensure employment creation, import substitution and fostering export. In this regard business development service and access to finance are major components being implemented by many local and international partners.

MESMER is one of such initiatives where additional features were included such as working in collaboration with banks and micro finance institutes to enable MSMEs sustainably access credit

besides building the capacity of financial institutes. There is also a component of psychosocial service (PSS) and business development service (BDS).  This ToR specifically targets the BDS provision to startups and MSMEs by making use of BDS modules of MESMER. The BDS service will be provided to supplement the credit and grant facility that MESMER is implementing to improve the bankability, sustainability and resilience of selected MSMEs.

OBJECTIVE

The objective of this assignment is to identify a service provider with the capacity to deliver Business Development Services for start-ups and MSMEs.

JUSTIFICATION OF THE SERVICE AND SCOPE OF WORK

MESMER has undergone an intensive process to develop a BDS module with a facilitator guide that suits and considers the real contexts of informal enterprises, startups and MSMEs. The list of enterprises that are found eligible to receive grants and credit will be shared with the service provider so that the BDS support can be provided to these target groups in a nearby area as much as possible. As an alternative strategy, the service provider could work with MESMER to select enterprises and startups.

The MESMER targets to accomplish an 80% participation of women-owned/led MSMEs, while aiming at a 70% youth involvement, and a 10% target of inclusiveness for IDPs, PWDs, and returnees. There are set of targets for the enterprises to be supported.

• 15% of women-owned micro enterprises to transform to small enterprises.
• 5-10% of women-owned small enterprises to transition to medium enterprises.

Furthermore, the major target sectors are agriculture and manufacturing. Below is the definition of the different types of enterprises.

Start-ups 

• Already-licensed businesses with less than 12 months of business operation.
• MSMEs
• Micro-enterprises: Legally registered enterprises, defined as businesses employing up to 10 individuals
• Small enterprises: Legally registered enterprises, defined as businesses employing 11 to 30 individuals.
• Medium enterprise: Legally registered enterprises employing 31 to 100 individuals

The target enterprise for BDS delivery within the target cluster is listed below.

S/N	Cluster	Indicative no. of MSMEs Receiving BDS support/cluster	Remark
1	Amhara Cluster (Amhara region)	3,008
2	Oromia Cluster (Oromia region)	2,983
3	Eastern Cluster (Somali, Dire Dawa, Hareri and Afar Regions)	1,282
4	West Cluster (Southwest, Gambella, and Benishangul Regions)	691
5	South Cluster (Central Ethiopia, South Ethiopia and Sidama Regions)	2,036
	Total	10,000

The BDS providers should state which specific regional clusters they are applying for and populate financial proposal accordingly. They should support their application with documentation showing experiences of operation in the selected regions.

N.B. A service provider may apply for more than one cluster and may be considered for multiple clusters based on the program’s need and the provider’s capacity. For this purpose, we require the service providers to provide cost per MSMEs trained and supported via telephone and one-to one supports as the case may be. This has to be submitted for each of the clusters selected. If separate cost per MSME supported is not provided for each cluster, we shall assume that a single rate applies to all for which the service provider is bidding for.

SPECIFIC ACTIVITIES

The service provider is expected to bring its experience and knowledge to complete the following tasks:

1. Work plan and strategy

• Produce a detailed work plan to reach the targeted number of enterprises within the stated period.
• Develop a strategy for delivering effective business development services (BDS) tailored to the target start-ups and enterprises, ensuring they can leverage these services to enhance their performance
• Develop a strategy on how to help enterprises transition from micro to small enterprise, and small to medium enterprise.

 

2. Internalize exiting training materials/methods and deliver BDS 

• Ensure uniform service delivery by internalizing the training materials (module, facilitator guide and presentation PPTs).
• On-boarding of BDS trainers sufficiently to ensure familiarity with training materials, methodology and ensure program quality is maintained throughout the BDS implementation.
• Delivering BDS for target start-ups and MSMEs by considering MESMER is women focused and inclusive program.
• Deliver BDS for targeted enterprises that can make them grow and transform from micro to small enterprise and small to medium enterprise.
• Conduct filling out baseline data to profile existing situation of the enterprises and ease the monitoring & evaluation activities.
• Support participants to fill out session evaluation tools whenever relevant.
• Design effective follow-up and implement for trained start-ups and MSMEs to extend BDS and support them in implementing newly gained knowledge and achieve transformation of enterprises.

3. MERL (Monitoring, Evaluation, Research and Learning)

• Provide regular report, in a manner and frequency required by the program’s MERL system.
• Support in organizing various surveys and onsite visits as and when required.
• Communicate results, follow up outputs and so on with BDS lead through reporting and other communication methods.

 

DELIVERABLES AND TIMEFRAMES 

The minimum deliverables are listed in the table below. The regional distribution and target for the BDS will be provided by MESMER upon contract signing.  The BDS provision could occur simultaneously in different regions or locations.

Activities	Deliverables	Date
Initiation	Inception report	December 18, 2024
Preparation and BDS Delivery	Understanding of training materials (Contextualization whenever relevant)	December 18, 2024
	Onboarding the teams of BDS providers in alignment with program quality standards	December 23, 2024
	BDS delivery according to set targets and timelines	December 26, 2024
Follow-ups	Design and implement follow-up for trained enterprises and startups to achieve transformation	Recurring
Report	Progress reports	Periodic
	Quarter reports	Periodic