Chemonics International is implementing Pakistan Small and Medium Enterprise Activity (SMEA), which is a 5-year, $35 million project that is aimed at improvement of financial and operating performance of small and medium enterprises (SMEs) in Pakistan in selected high-performing industrial, manufacturing and services sectors. Creating an enabling business environment is one of the objectives of SMEA. As such, the Project in its third year of implementation, engaged with the Government of Khyber Pakhtunkhwa to identify key areas of collaboration.
Khyber Pakhtunkhwa Government envisions a secure, economically vibrant and a prosperous society through socio economic and human development, creation of equal opportunities, and good governance. The province has come a long way on the path of peace and is progressing by pursuing a citizen-centric model for socio economic development and focusing on poverty reduction through an integrated and holistic approach to development. [1]Sustainable rise in the standard of living warrants a sustained rise in per capita income. This is possible with a sustained, healthy growth rate of the gross domestic product (GDP). Khyber Pakhtunkhwa’s quest for sustainable development will, thus, critically rest upon the growth in its GDP. Khyber Pakhtunkhwa’s economy experienced the highest growth rate among the provincial economies in the last five year. However, these growth rates are lately declining, coming in at 4 % in the last fiscal. There are several constraints upon the provincial resources and the economy of the province, which would need to be addressed if the province is to overcome roadblocks to sustained growth in per capita income, and also for creating enough employment opportunities to absorb growing labor force. With improved security situation and reformist agenda of the government, various measures have been initiated by the government to encourage SMEs growth across the province and encourage start ups under Ease of Doing Business.
Further details of the assignment can be seen in attached “Scope of Work”
Fund Design / Investment Specialist (Level of Efforts: 30 Days).
Principal Duties & Responsibilities:
- Undertake desk research and review all the relevant literature listed in, but not limited to, Annex B of this scope
- Meet with SMEA team, the Department of Finance, Government of KP and Finance Minister’s team designated members to understand scope of this consultancy and the vision of the Government regarding the A2F Fund as a medium for addressing access to finance issue for businesses in KP
- Provide periodic (preferably fortnightly) updates about work in progress to SMEA, which shall be shared with the Finance Department, Finance Minister’s team designated members . Special updates may be requested by the Finance Minister.
- Meet with relevant private sector stakeholders including SMEs, youth start-ups, women entrepreneurs, women led business, State Bank of Pakistan, Pakistan Credit Guarantee Scheme, commercial banks, micro-finance institutions and others relevant to the scope of this study- to be done as part of interactive meetings, and focus group discussions (number to be decided later)
- Work as team and in close coordination with SMEA, the Finance Department and Finance Minister’s team designated members, complete the tasks detailed below and develop a final report on “Access to Finance Strategy for Government of KP”
Specific Tasks:
- In close coordination with team lead and Sectoral analysis specialist, short-list 5-6 sectors in which A2F is a major bottleneck and there is potential uptake
- Conduct sectoral analysis identifying elements of available financial services that hamper the ability of businesses to access it through formal channels.
- Submit Inception report with initial findings of the analysis.
- Assist the team lead and sectoral analysis specialist in conducting the focus group discussion, finalizing agenda, and identifying public-private stakeholders.
- Study international best practices and local context to develop a blueprint of the strategy to increase the availability and uptake of formal financial services through Funds set-up by the government.
- On the basis of the diagnostics above, propose an actionable/implementable mechanism based on the actual financial institutions and investment instruments available in Pakistan for private sector, which contains options to address A2F. The approach suggested is to empirically establish and substantiate the effectiveness of special instruments/investment vehicles as a means to stimulate private sector investment through an initial seed funding of PKR 500 million by the government.
- The Fund Design/Investment Specialist along with other team members will propose the most appropriate financial services and specific instruments as well as highlight the need and roles of existing stakeholders such as commercial banks, SBP, microfinance institutions and those providing risk participations services
- The Fund Design/Investment specialist will propose the mode of financing including, but not limited to, credit, convertible loans, equity, and various forms of blended finance
- Based on the proposed sectors, the Fud Design/Investment Specialist will give recommendations on the ceiling amounts as well as the eligibility criteria for choosing enterprises in close coordination with team lead and sectoral analysis specialist.
- An important part of the strategy will be how SMEs are informed about this fund, and how the uptake will be promoted keeping in mind impediments related to collateral, documentation, non-performance, religious beliefs and reluctance to share equity
- The consultant shall devise a mechanism for the implementation of the strategy through the private sector financial institutions.
- Strategy must take into consideration the socio-economic and political dynamics of KP and include the institutional format to take it forward. This institutional format should include private sector financial institutions which will be implementing this A2F strategy/mechanism devised.
- Provide inputs for the draft report.
- Incorporate feedback from SMEA and Finance Department for finalization of report.
- Presentation to the USAID.
- Undertake other tasks as necessary to the completion of the scope work as advised by SMEA
Job Qualification:
- Master’s degree in Development Economics, Finance, Investment, Banking, Public Policy, Public Administration from a reputed international university
- At least 5 years of experience in investment/business advisory, venture capital, banking and/or asset management
- Deep knowledge and understanding of the national, provincial, and local impediments to access to growth and startup funding
- Prior experience in developing financial mechanisms/tools, programs and projects to accelerate investments in an underdeveloped sector
- Extensive knowledge of business investments environment and ability to trigger matchmaking between private sector and investors in development projects
- Prior knowledge and experience of undertaking and designing investment strategies for the Government
- Previous experience of working with USAID projects in the area of economic growth will be preferred
- Experience of working with donor projects in the SME space.