Financial Sector Mapping and Research Expert - ARE Activity

Project Name:                                              Lebanon Agricultural Rural Empowerment Activity

STTA Title:                                                     Financial Sector Mapping and Research Expert

Reporting to:                                                Deputy Chief of Party

Ceiling LOE:                                                   30 days

Deadline for Completion of Services:       January 31, 2021

Project Background

The Lebanon Agriculture and Rural Empowerment (ARE) program is a multi-year project funded by USAID to develop rural economies in Lebanon through support to the agro-food sector and other industries to unlock local and export sales potential while also creating jobs and increasing farmers’ and worker’s incomes. ARE will increase jobs; improve incomes; improve female participation and employment opportunities; increase domestic and export sales; increase private sector investment; improve access to finance; link value chain actors to domestic and international markets; and improve farm production through improved practices, technology, increased volume, and/or decreased cost, sales potential while also creating jobs and increasing farmers’ and workers’ incomes.

Problem Statement

Lebanese micro, small and medium-sized enterprises (MSMEs) are facing increasing challenges in accessing financing which is critical for their sustainability, growth and development. Previously, the Lebanese lending scene was characterized by high collateral requirements and interest rates. Lebanon’s current financial crisis is characterized by a tightened monetary policy (lack of availability of loans and restrictions on USD cash withdrawals and international transfers) and the significant devaluation of the Lebanese Pound. Both are preventing MSMEs to engage in development and investment planning (short, medium and/or long-term) and has negatively affected the purchasing power of Lebanese citizens. Furthermore, MSMEs are largely not bankable and lack information on financial products/services designed to meet their particular needs and/or business constraints. Moreover, a large proportion of MSMEs and farmers still apply outdated practices and use rudimentary equipment. Such stakeholders lack both the financial capability to upgrade their operations through improved technology, as well as the management practices that would help them grow and improve both business efficiency and production quality. Additionally, financial institutions, primarily commercial banks and microfinance institutions, have expressed their need to learn more about agricultural and agri-business sectors int order to design products and services to better serve these MSMEs and farmers.

Summary of Position

ARE will work with agribusinesses to improve sales, productivity and increase access to finance that will enable MSMEs to invest and develop their operations as needed. The Financial Sector Mapping and Research (FSMR) Expert will provide ARE with the mapping of financial institutions including the portfolio of financial services currently available to agribusiness and rural sector. As one of ARE’s strategic objectives is to support new private sector investments within the agricultural sector, the Financial Sector Mapping Expert will scope and map financial products and services offered specifically to agricultural businesses and develop agriculture-specific investment guides to help MSMEs access such products and services in order to achieve the aforementioned objective. The mapping will also include all Central Bank’s circulars targeting the agricultural and agri-food industries in Lebanon.

This research will also look to provide recommendations for the development and/or support of appropriate products and services, risk management products (e.g. price- or weather index insurance) , identifying innovative and emerging technology opportunities that may offer promising potential in Lebanon’s context, as well as the possibility of establishing dedicated agriculture-focused funds, both in terms of credit as well as private equity, venture capital and/or mezzanine financing instruments.

Specific Duties and Responsibilities

• Segment the market of access to finance by the financial service providers and categorize recipients by operation size and financing needs.
• Map the existing/available formal and informal financial products/services, and their respective providers/operators including MFIs, for financing MSMEs and farmers across the value chains;
• Outline the main objectives for the use/deployment of the identified financial services/products in addition to the application process and requirements and loan terms (payback period, interest rate, grace period, etc..)
• Identify and or suggest a brief overview of actual or potential crop insurance program initiatives available in Lebanon;
• Identify the financial institutions/investment firms’ knowledge regarding non-financial services demanded by the agricultural and agri-industry sectors
• Research Lebanese and regional venture and private equity firms and their willingness to invest in agriculture and agri-food including minimum requirements with respect to investment value, ROI, etc.
• Illustrate up to five access to finance opportunities that ARE might be able to apply and include key stakeholders and tentative process.

Regulatory and enabling environment:

• List the Banque Du Liban (BDL) circulars related to agricultural and agri-food loans, import subsidies and other
• Validate the processes and requirements of BDL circulars with stakeholders from the private sector including challenges and opportunities
• List recommendations (if any) that might help facilitate the application and use of above circulars.
• List and detail existing and prospective support funds to support the Lebanese agricultural and agro-industries sectors i.e. Lebanon Oxygen fund, etc.

Final report format: 

• Below is an illustrative outline of the final report:
  • Executive Summary
  • Regulatory and enabling environment
  • Financial services:
    • Previously available (pre- October 17, 2019)
    • Current services:
      • Traditional Commercial Financial Services, including Trade Finance
      • Private Equity and Venture Capital
  • Opportunities
  • Conclusion and recommendations

Other duties as assigned.

Place of Assignment

The Financial Sector Mapping and Research (FSMR) Expert is welcome to work from ARE’s program office space in Beirut as needed. He/she is expected to self-drive to needed meetings in order to gather the necessary information.

Reporting

The Financial Sector Mapping and Research (FSMR) Expert will report directly to the ARE Deputy Chief of Party / Chief Technical Officer.

Qualifications

• University Degree (preferably Master level) in Finance, Economics or Business Administration, or equivalent discipline
• Good knowledge of economic development stakeholders in Lebanon;
• Minimum of 10 years of recent relevant experience (within the last 15 years) in identifying, analyzing and implementing access to finance program (products/services);
• Experience as a key access to finance expert in the agri/ago business sectors is preferred;
• Demonstrated experience in the design and implementation of technical value chain assessments and/or market systems analysis, preferably for agricultural value chains;
• Demonstrated knowledge of Lebanon’s financial services sector including strength, weaknesses, and constraints in light of the current economic climate;
• Must be familiar with Lebanon’s agricultural and rural sector, local communities, and private sector, particularly focused on agro/agri-business.
• Demonstrated ability to work independently as well as in a team structure, versatility, and integrity
• Strong interpersonal, analytic, and written communication skills
• Fluency in spoken and written English required, Arabic preferred.