REQUEST FOR EXPRESSIONS OF INTEREST AFRICAN DEVELOPMENT BANK MIGRATION AND DEVELOPMENT FUND

Transcription

1 REQUEST FOR EXPRESSIONS OF INTEREST AFRICAN DEVELOPMENT BANK MIGRATION AND DEVELOPMENT FUND Consultancy Services for a study on the impact of digitization on the remittance market in the Franc Zone countries. 1. The African Development Bank (AfDB) has embarked with its partners, including the French government and the International Fund for Agricultural Development (IFAD), to explore ways and means of mobilizing migrant remittances and using them in the best interest of the recipients and migrants, as well as the development of receiving countries. A Migration and Development Fund (MDF) was created in 2009 with the primary objective of promoting and supporting local initiatives and those from the diasporas aimed at reducing the costs of remittances and optimizing the use of the resources transferred. 2. At the 12 th Supervisory Committee meeting of MDF, a series of studies to be conducted was identified including a study for understanding the impact of mobile payments and their associated risks and opportunities for the money transfer market. The emergence of technology-based remittance products and services, most notably mobile systems used at the sending and receiving channels, have the potential to offer customers greater convenience and safety, lower the cost, reduce the use of cash and informal channels, and increase the flows of remittances to migrants countries of origin. 3. The African Development Bank through its MDF, and in collaboration with the Making Finance Work for Africa Partnership (MFW4A) hereby invites Consulting Firms to indicate their interest to undertake a study on the impact of digitization on the remittance market in the Franc Zone 1 countries. 4. Objectives The services to be provided under the Assignment include: Conducting a market analysis of the formal and informal remittance markets in the Franc Zone countries, including a supply-side analysis of the main market players and a demand-side analysis on the economic behaviours of senders and recipients. Identifying the opportunities and constraints associated with the adoption of digital remittance services (particularly mobile-based services) from the perspective of both customers and service providers, with a special focus on 1 With the exception of the Comoros, the other franc zone countries are members of one of the two economic and monetary unions, WAEMU (Benin, Burkina Faso, Côte d'ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo) and CEMAC (Cameroon, Central African Republic, Chad, Republic of Congo, Gabon and Equatorial Guinea). Even though the Comoros use the Comorian Franc (KMF) as its main currency, it will not be part of the study due to the limitation of its mobile money activities.

2 both the regulatory and institutional barriers associated with such services in the Franc Zone countries. Identifying innovative solutions in the remittance industry, as well as the regulatory frameworks that addresses exclusion and inequalities of financial access and usage. 5. Scope of Work The following will be the scope of the study: Understanding the opportunities offered through the digitization of remittances in the Franc Zone countries from the demand side. This part of the study will analyse the accessibility and usage of digital remittance services in reaching the last mile, by providing concrete examples from the customer s perspective in order to illustrate the evolution of this type of service in the targeted area. In particular, we are interested in understanding: i. The specific needs and behaviours of senders and receivers in those countries. (This includes frequency, amounts, main motives, use of funds for immediate needs, savings, investments, as well as the formal channels used by the remittance beneficiaries). i The type of services used to send money in order to cover those needs. These should include unregulated channels, traditional cash-to-cash channels and other services provided by Remittance Service Providers (RSPs), with a particular focus on the use of mobile telephony and other means of digital payments. Moreover, it would be necessary to assess the level of penetration of the latter model in relation to the others. The constraints senders and receivers face, depending on the type of services used or requested. Particular focus should be given to actual and potential users of mobile and digital money transfer services; perceived and real constraints in their use, and their comparative advantage over the other models. The supply side and market competition. A scoping exercise to highlight the different type of institutions involved in the remittance market in the Franc Zone countries, highlighting the opportunities, costs and the proximity of these services to customers, as well as the market characteristics for Mobile Network Operators (MNO). In particular, we are looking for: i. A mapping exercise to identify key national, regional and out-of-area corridors, the main actors, their services including any additional financial products offered, their outreach and scope, as well as an estimate of the transfer volumes and average values. The exercise should also focus on the costs associated with those different services. A special analysis of the opportunities offered by MNOs in the remittance market in terms of costs, interoperability, penetration rates and financial inclusion, as well as the (potential) commercial impacts of mobile money

3 transfer services. A description of the current mobile money transfer models will describe the different stakeholders involved, potential partnerships in place and key aspects of the business models. In addition to MNOs, the analysis should focus on Fintechs and other multichannel platforms integrated in the digital money transfer ecosystem. i The main constraints identified by RSPs in the digital remittance market (ex. the withdrawal of banks and closing of correspondent accounts, exclusivity clauses, access to the USSD channels etc.). The regulatory framework. This part will review the risks and challenges associated to the digitization of remittance services, the constraints to uptake, as well as the regulatory and legal provisions governing the industry in the Franc Zone countries. In particular, we are looking for: i. An analysis of the risks and challenges associated with the digitization of remittances, including risks related to money laundering and terrorist financing (ML/TF), various types of fraud, consumer and data protection, public payment services and administrative procedures. i Other regulatory constraints which limit or even prohibit the transfer of cross-border funds offered by MNOs or other digital platforms by setting by setting geographical / regulatory limitations (i.e. national, intra-zone and beyond). A review of the existing regulatory measures governing digital remittance services under the Financial Action Task Force (FATF) Anti-Money Laundering provisions, the General Principles for International Remittance Services (World Bank, BIS) or the G20 High-Level Principles for Digital Financial Inclusion. 6. Geographical Scope of the Study The focus of this study is on the Franc Zone countries, which refers to the 14 countries in West and Central Africa were the CFA is the common currency. The CFA Franc Zone belongs to one of the two communities: West African Economic and Monetary Union (WAEMU): Benin, Burkina Faso, Côte d Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo. Central African Economic and Monetary Union (CEMAC): Cameroon, Central African Republic, Chad, Republic of Congo, Gabon and Equatorial Guinea. The mapping exercise to be carried out by the consulting firm concerns all major players in the remittance ecosystem of the Franc Zone countries. As for the data collection and analysis component of this study, the focus will be on two (2) countries for the demand side; and five (5) countries for the supply-side. It is also expected that countries will be selected based on:

4 The level of development and penetration of digital financial services; and The level of knowledge and research gap on the digitization of the remittance market. 7. Methodology The duties and responsibilities of the consulting firm will be carried out in the following stages: Conduct a Desk Review. It is expected that the research methodology will be outlined in the Desk Review submitted along with a timetable, and that the final methodology will be determined in consultation with relevant stakeholders; Map the remittance market system in the Franc Zone countries; Collect, using qualitative research methods, review and analyse the: i. Opportunities and constraints associated with the digitization of remittances from the demand side in the selected Franc Zone countries; Opportunities and constraints associated with the adoption of remittance services from the supply-side in the selected Franc Zone countries; i The actions that MNOs can take to unlock their potential in the remittance market; and iv. The regulatory frameworks and institutional environments associated with the digitization of remittances and the risks associated with such transfers. Submit a Summary Report presenting the opportunities and constraints of the digitization of remittance markets in the Franc Zone countries; Present an innovative landscape and a list of recommendations in a consultative workshop with all the relevant stakeholders in the follow-up of the execution of the study and the carrying out of the surveys / interviews; and Submit a final report. 8. Timeframe and Deliverables: The study will begin no later than one month after notification of the contract, and will be undertaken in no more than one hundred (100) working days over a period of five (5) calendar months. Activity and Deliverables Deliverable 1 : Desk Review and Proposed Methodology Desk review revealing what studies exists / lacks Development of the proposed methodology with a timetable and presentation to the adhoc committee Deliverable 2 : Mapping + Summary Report + List of Recommendations Field visits and data collection using qualitative research methods Analysis of the data collected and Time 20 days 60 days

5 preparation of a Summary Report Presentation of the Summary Report and recommendations at a consultative workshop Deliverable 3 Final Report + 20 days PowerPoint presentation of the study findings + Executive Summary of the study findings Total 100 days 9. The working language of the study will be in French. 10. The Financial Sector Development Department invites Consulting Firms to indicate their interest in providing the above-described services. Interested eligible Consulting Firms or associations of Consulting Firms shall provide information on their qualifications and experience demonstrating their ability to provide the services (documentation, references for similar services, experience in comparable Assignments, availability of qualified staff, etc.). 11. The consulting firm must also ensure the availability of the appropriate skills among its staff. 12. The eligibility criteria, the establishment of a short list and the selection procedure shall be in conformity with the Bank s Procurement Policy Framework for projects financed by the Bank Group, October 2015 Edition, available on the Bank Website at Please, note that interest expressed by a Consulting Firm does not imply any obligation on the part of the Bank to include it in the shortlist. 13. Interested consulting firms may obtain further information at the address below during the Bank s working hours: 09:00 to 17: Expressions of interest must be received at the address below no later than 27 September, 2017 at 18:00 local time and specifically mentioning: Consultancy Services for a study on the impact of digitization on the remittance market in the Franc Zone countries. For the attention of: Ms. Maimouna Gueye African Development Bank Financial Sector Development Department Immeuble du Centre de commerce International d Abidjan CCIA 01 BP 1387 Abidjan 01, Côte d Ivoire Town: Abidjan Country: Côte d Ivoire Tel: m.a.gueye@afdb.org