Global Green Growth Institute Job Consultant: Market Assessment for Microfinance Sector in Indonesian

GGGI is a treaty-based international, inter-governmental organization established in 2012, at the Rio+ United Nations Conference on Sustainable Development. Founded to support and promote the mainstreaming of green growth, GGGI programs and projects target economic growth that is environmentally sustainable and socially inclusive. GGGI works across four priority areas considered to be essential to transforming national economies, including sustainable energy, water and sanitation, sustainable landscapes, and green cities.

GGGI Indonesia Country Office has been working with the Government of Indonesia (GoI) since 2013 and is implementing Green Growth Program (GGP) since 2015. The GGP is designed to support Indonesia to reach its goals and priorities, including Sustainable Development Goals (SDGs) and Nationally Determined Contribution (NDC) commitments. It sets the stage for a more investment and implementation-oriented approach to deliver bankable green projects and access climate finance and green finance more broadly, within three focus areas of renewable energy, special economic zones (SEZs) and forest-and-land-based climate change mitigation.

GGGI Indonesia is currently looking for a Consultant for Market Assessment for Micro-finance Sector in Indonesia. The objective for this assignment is to carry out a thorough market assessment on the microfinance sector in Indonesia with a focus on addressing financing needs and opportunities in medium to high risk developments, such as innovations in agro-forestry, animal husbandry, house-based SMEs and freshwater aquaculture in the high risk environment of peatland and forest restoration and in relation to carbon emission reduction efforts for climate change mitigation. In addition, this assessment will also identify market gaps related to availability and accessibility of microfinance instruments (loans, credit lines, insurance products etc.) to smallholder farmers in Indonesia, with a focus on Kalimantan (especially Kalimantan Timur and Kalimantan Tengah).

The purpose is to find the market need, appetite and potential designs for a microfinance facility that could support the requirements of GGGI and other development partners’ projects and programs in the peatlands and sustainable forest and value chain sectors. The assessment will identify potential financial institutions, partners and other champions who could support the development and management of such a financial mechanism.

Scope of Work:
  • Carry out primary and secondary research of at least 5 existing (or developing) microfinance focused facilities (including specialized funds/initiatives like Nordic microfinance initiative, banks like BRI, non-banking financing companies, development finance institutions like IFC, ADB, IFAD etc.), at least 5 financial institutions (like banks, cooperatives and non-banking financial institutions) in Indonesia – focused on Kalimantan.
  • Document and map the current operational details of microfinance facilities – current portfolio, number of customers, average ticket size, product details – tenor, interest rate etc., other financial products, geography of operations, etc. Some examples of such facilities are ‘Smallholder and SME Investment Finance (SIF) Fund focused on Sub Saharan Africa’ by IFAD; ‘Climate Smart Microfinance Fund for Indonesian Smallholder Farmers’ by Nordic Microfinance Initiative.
  • Particularly focus on mapping the microfinance needs and availability for novel and under-valued commodities like Sengon, Gelam, Tengkawang, Jelutung and small-scale fisheries enterprises as well as house-based SMEs (e.g. women-led enterprises). Business concepts and financial models developed by GGGI (and other organizations like P4F, IDH, SystemIQ etc.) for some of these commodities can serve as guides to the kind of small-scale enterprises and supply chains that may need financial support.
  • Assess the target market size, targeted sectors, partner organizations of the microfinance facilities along with approximate credit exposure to different markets/sectors.
  • Document and analyze the financing and legal structures of the microfinance facilities, if available.
  • Conduct primary research on other institutions and mechanisms (public or private) that are ‘closer   to’ smallholder farmers and intend to support financing of farmers/micro-small rural enterprises – like Dana Desa, BUMDES, KUDs etc.
  • Identify the policy gaps, financing gaps and institutional challenges that need to be addressed in the sector to increase the availability, accessibility and understanding of microfinance for smallholder farmers, particularly for novel commodities and business models.
  • Fully understand and document the different operational, legal, capacity and other challenges currently being faced by these financing mechanisms and institutions (public and private).
  • Assess and identify the policy gaps related to microfinance sector and potential solutions to encourage the microfinance institutions to increase their client base.
  • Carry out discussions with different stakeholders – village cooperatives, industry associations, local financing institutions, NGOs that support smallholder development, women groups, etc. to map the challenges faced by beneficiaries (smallholder farmers and micro/small enterprises) regarding understanding, availability, and accessibility of microfinance.
  • Carry out discussions and assess the role of new financial-technology companies/start-ups that could play a role in closing the microfinance access gap.
  • Compile all the field level, and primary and secondary research to propose the best options for financial mechanisms (e.g. soft-loan fund or a financial instrument or a risk reducing facility etc.) that could address major challenges identified during assessments.
Details of the position and to apply please click at this link: CLICK HERE

Deadline: 1 March 2019