USAID LIFE RFA #5 (Extension)

1. LIFE Project Description

The Livelihoods and Inclusive Finance Expansion (LIFE) Project is a 5-year project funded by the United States Agency for International Development (USAID) and implemented by Palladium. The purpose of LIFE is to improve economic opportunities and livelihoods low income individuals and microenterprises by expanding their business skills and access to a broad range of financial services that will improve their resilience and potential to scale up economic activities. The project is comprised of three components: Component 1) improve in the business enabling environment for inclusive finance through supporting policy development and institutional shifts that facilitate expansion of the financial sector to un- and under-banked communities; Component 2) strengthen the supply of financial services through working with microfinance institutions, non-bank financial institutions, and commercial banks to expand and tailor products for low income un-banked market segments; and Component 3) strengthen the demand for financial services through supporting small businesses and entrepreneurs to expand.  The LIFE project is particularly focused on expanding financial services, financial literacy, and business skills training to women, youth, and other disenfranchised communities in peri-urban and rural areas across Lebanon.

Project Goal

The USAID/Lebanon LIFE project will strengthen livelihoods, advance the microfinance industry, and inclusive finance, in order to improve economic opportunities for under-served entrepreneurs and recipients of microfinance services.

1. Funding Opportunity Statement

In light of the current financial crisis hitting Lebanon, microfinance institutions are struggling to address the situation in order to ensure the financial sustainability of Micro and Small business clients. 

Subsidizing loan officer incentives to maintain clients will serve to stabilize MFI port-folios and thus protect current client incomes during these difficult times.

For the purpose of this RFA, the project will use grants to support achievement of LIFE results under Component 2.

LIFE will use grants to assist MFIs:

1. Maintain and Stimulate the market outreach for unbanked Micro businesses in depressed geographical areas of Lebanon.
2. Expand their range of affordable products and services to more vulnerable populations, particularly low-income women, youth, and the physically disabled in economically distressed areas.
3. Supporting entrepreneurs and microenterprises to maintain their business capacity, access formal financial services, and establish sustainable livelihoods.

This round of grants is expected to provide financial incentives “Financial Subsidies” paid to these MFI-nonprofits for the disbursement of new microcredit loans through loan officers in order to maintain their market penetration and outreach to that population where demand and need for affordable credit is most pressing.

The MFIs will mobilize their own capital resources to disburse micro-loans whereas USAID Grants will be disbursed to pay financial subsidies for new loan accounts disbursed through their loan officers allocated on this grant.

1. Award Information

The LIFE project will implement a two-step application process. The first step is to complete a Concept Note with basic budget and workplan (as described in Section 5 below). Selected applicants will be invited to complete the second step, the development of a full grant application with support from the LIFE team.

The LIFE Project will accept, and review Concept Note applications on a rolling basis until the application deadline. Palladium requires that applications be submitted electronically (e-mailed) to [email protected]. Please include “RFA 005 (Extended) in the Subject Line.

Grantees will be evaluated based on their performance and achievement of deliverables that may qualify high performers for additional resources and those with low performance (not delivering) will be subject to grant revision and reduction in funding.

The performance period for grants will be up to 6 months, depending upon assessed capacity and will begin when the grant is awarded.

Geographical areas of grant activities: Remote and peri-urban areas of Lebanon.

Grants outcomes include but not limited to disbursing affordable credit to the unbanked population in Lebanon.

Grant amount will depend on the proposed activities, anticipated results, impact and the applicant capabilities.

Award type: use of specific grants mechanisms will de determined by LIFE based on application’s activities and assessment of applicants’ organizational capacity.

Use of grant funding as loan capital is ineligible.

1. Eligibility Criteria:

Grants may be provided to Lebanese organizations that are legally registered and recognized under the laws of Lebanon and meets the below eligibility criteria:

• Must be an active member of the Lebanese Microfinance Association
• Must be a Lebanese MFI “Microfinance Institution” actively providing Access to Finance Services in Lebanese underrepresented areas.
• Must not be majority owned or controlled by a Government entity and must operate as an independent non -politically affiliated organizations.
• Must have an average loan size portfolio not exceeding $4,000
• Must submit their updated key performance indicators on outreach, disbursement and portfolio at risk for more than 30 days.
• Must comply with all applicable USAID rules and regulations (including procurement regulations, if applicable, branding and marking requirements, environmental requirements, regulations regarding terrorism financing, trafficking of persons, etc.).
• Are willing and able to complete the process of issuing a DUNS number (required by USAID). For more details about DUNS numbers: http://www.dnb.com
• Grants will not cover any of the following activities:

• Capital expenditures, including construction activities or buying real property;
• Capital loans;
• Support for or lobbying on behalf of a particular political party;
• Religious activities;
• Support of police or military;
• Equipment as defined in 2 C.F.R. 200.33.

Additional Eligibility Criteria

In addition to the minimum requirements listed above, it is preferred that MFI have already made a demonstrable commitment to serving lower-income segments in peri-urban and rural areas and have made formal financial products more accessible for these communities, particularly women.

For applicants that seek support for promoting specific pro-poor financial products, it is important that these products provide competitive and sustainable rates and conditions. 

The Chief of Party may waive a requirement if a response to the RFA presents a valid justification, assuming approval from USAID.