Consultant: Development of a Guideline Note on “Enhancing Financial Inclusion in Rural Areas”

Adequacy of the proposed work plan and methodology in responding to the Terms of Reference;

1. Background

The Alliance for Financial Inclusion

The Alliance for Financial Inclusion (AFI) is the world’s leading organization on financial inclusion policy and regulation. Currently, nearly 100 member institutions make up the AFI network including central banks, ministries of finance and other financial policymaking or regulatory institutions from over 85 developing countries and emerging markets. AFI empowers policymakers to increase the access and usage of quality financial services for the underserved through sustainable and inclusive policies and an effective use of digital technologies.

Policies developed and implemented by the members of the Alliance contribute to a range of the Sustainable Development Goals. By setting their own agenda, AFI members harness the power of peer learning to develop practical and tested policy reforms that enhance financial inclusion with strategic support from both public and private sector partners.

AFI has 7 Working Groups (WGs): Consumer Empowerment and Market Conduct Working Group (CEMCWG), Digital Financial Services Working Group (DFSWG), Financial Inclusion Data Working Group (FIDWG), Financial Inclusion Strategy Peer Learning Group (FISPLG), Global Standards Proportionality Working Group (GSPWG), Inclusive Green Finance Working Group (IGFWG) and SME Finance Working Group (SMEFWG).

As the key source of policy developments and trends in financial inclusion and as the primary mechanism for generating and incubating technical content in the network, the Working Groups serve as “communities of practice.” Providing a platform for knowledge exchange and peer learning among policymakers to share, deliberate and deepen their understanding, the working groups offer leadership and expertise in their respective policy fields and support the network to monitor new developments in emerging fields. The WGs are supported by a full range of capacity building courses and events and in-country implementation projects.

The working groups receive strategic guidance and insight from the High-Level Global Standards & Policy Committee, while the Gender Inclusive Finance Committee, supports WGs in integrating gender considerations into all aspects of their work and support members in fulfilling their Denarau Action Plan (2016) commitment to promote women’s financial inclusion.

AFI members have made further commitments in a range of other accords which can be read here.

The AFI’s five regional initiatives support policy implementation in Africa (AfPI), Latin America and the Caribbean (FILAC), the Pacific Islands (PIRI), Eastern Europe and Central Asia (ECAPI) and the Arab Region (FIARI).

The Financial Inclusion Peer Learning Group (FISPLG), established in 2012, supports countries with the development and implementation of national financial inclusion strategies (NFIS). Apart from the provision of NFIS peer reviews and relevant capacity building, FISPLG members are also developing knowledge products which can be used as NFIS guidance across the AFI network.

The work of the FISPLG is also closely aligned to the Denarau Action Plan. This 10-point plan was adopted by the AFI membership to identify policy measures AFI members can take to increase the number of women with access to quality and affordable financial services globally and close the financial inclusion gender gap. Point one of the plan speaks to incorporating gender considerations into all of the network’s core activities and knowledge product development.

In 2021 the FISPLG members have prioritized the development of a Knowledge Product (“Enhancing Financial Inclusion in Rural Areas”) which will support other AFI members and 3rd parties to further improve financial inclusion in rural areas.

2. Project Background

55% of the world’s population is rural and 70% of the world’s poor are concentrated in rural areas. In low-income countries, more than five out of six people live in rural areas. While most of them work in agricultural value chains (farming, processing, manufacturing, transportation, distribution, sales or preparation) non-farm activities are important too.

There is a significant gender dimension to this because 70 percent of the world’s poor are women and in developing and emerging economies 43 percent of the agricultural workforce are also women. When it comes to young population, nearly half of the youth in developing

countries live in rural areas. Women are more likely to face higher levels of discrimination due to social and cultural norms, which in many rural economies see their primary role as being a wife or mother, as opposed to being an independent economic actor.

Young rural people are often faced with a range of access gaps which constrain their productive potential. These gaps include access to land, financial services, markets and technology.

Financial inclusion can be a powerful tool to develop the rural economy and build women and youth’s economic resilience and sustain their livelihoods in their role of supporting their households and communities in achieving food and nutrition security, generating income, and improving rural livelihoods and overall well-being. Rural women and youth are more vulnerable to the impact of climate change and other pandemics such as the COVID 19.

Further, the rural population in most developing economies significantly contribute to agriculture and rural enterprises, accounting for at least 25 percent of gross domestic product. According to IFAD, the productive roles of the rural youth population have important consequences for development. This is particularly so as the world population is expected to reach 9 billion by 2050 and the demand for agricultural products are projected to increase by 60 per cent.

A vibrant rural economy can only be achieved if those living in the rural areas are not left behind in the pursuit of broader national financial inclusion and economic development objectives. It is especially important for the working poor – including migrant workers, home workers and smallholder farmers – to protect against risk and to smooth variations in consumption in their households, to increase their income and to invest in their businesses. Of those women who work but are living in extreme poverty, 68 percent of them are in the agricultural sector.

Despite the significant demand for financial services in rural areas, institutions offering financial services, are typically reluctant to serve rural areas and, therefore, financial services in rural areas remain underdeveloped and without the products and services that are required to meet their specific needs.

This is due to a combination of factors – dispersed clients, low levels of financial literacy among rural households, geographical accessibility and underdeveloped infrastructure resulting in the high cost of delivering services (especially low-value transactions), and the perceived high repayment risk associated with lending to agri-dependent households due to the systemic risks and challenges in agriculture and rural development, which make up the majority of households in rural areas. Furthermore, lack of available sex- and age- disaggregated data on the rural communities makes it even more challenging to ascertain the specific needs, interests and behaviors in the various life cycle events such as adolescence, independence, marriage, childbirth and old age.

As a result, the majority of the developing world’s rural population does not have access to the formal financial system and instead have to rely on informal ways of accessing financial services, which is often associated with high costs and information asymmetry. People with low financial literacy and capability are more likely to become more vulnerable to financial exploitation and abuse.

To unlock the potential of the rural economy, policy makers and financial regulators have a crucial role to play in providing enabling and inclusive policies at the national level, improving the financial infrastructure and promoting accessible, affordable and responsible rural finance through dialogue with financial service providers.

Increasingly governments are working together with the private sector to find innovative solutions to tackle these issues and promote rural finance by supporting farmers and households in accessing services; by developing adapted products at a reasonable price and by promoting an improved enabling regulatory and policy framework with an understanding of the needs of vulnerable groups such as women, youth, forcibly displaced persons and those living with a disability.

Solutions have been formulated by leaning on existing (financial) infrastructure so as to expand the distribution channels (e.g., banking counters in post offices or shops, mobile branch offices) and integrate/link existing member-owned non-formal initiatives such as self-help groups, VSLAs with the financial system and make use of SACCOs or Credit Unions, all with the aim to offer economies of scale and cost reduction. In addition, efforts have been made to address the specific needs regarding rural financing: e.g., savings schemes to provide cash for the season in between harvests, or transfer schemes for remittances to migrants who leave the rural areas for seasonal work. There is also a need for agricultural insurance schemes among small farmers who must protect themselves against weather-related risks.

Through implementing policies and regulations that are focused on the youth population, or by investing in and supporting youth-driven initiatives and projects, the global community can help ensure that the next generation is in a stronger position to engage in sustainable agriculture and is more resilient to change.

In recent years, the use of electronic technology is revolutionizing the provision of rural financial services, including insurance, and is driving down the costs of handling small transactions through branchless/mobile banking and these digitally enabled services and platforms (which bundle financial and non-financial services) are offering many small-scale growers new opportunities to engage in agriculture. However, this move to a more digital format can risk halting the progress in women’s financial inclusion, as women are 7percent less likely than men to own a mobile phone (15 percent for a smart phone) and 15 percent less likely to be able to use the internet.

Digitization offers the potential to revolutionize access to financial services in rural areas, provide more seamless connection for farmers and rural enterprises to value chains, reduce transaction costs for payments to suppliers, and increase financial resilience, for example through access to inclusive insurance. The increasing penetration of mobile financial services and biometric technologies that has been seen in recent years offers the potential to achieve efficient client enrollment and widespread access to digital payments. In short, digitization is a new frontier in developing vibrant, resilient rural and agricultural livelihoods, if delivered in an inclusive, responsible and sustainable manner Leveraging digital financial services, however, requires appropriate infrastructure including appropriate technology and interoperability among service providers, which remains a challenge in most rural communities in developing countries.

3. Objectives

The objective of this project is to be develop a Guideline Note on “Enhancing financial inclusion in rural areas” which:

  1. Examines how policymakers have sought to enhance digital financial inclusion in rural areas (including improvements related to the enabling policy and/or regulatory environment which underpin such digital financial inclusion initiatives) and the impact of such measures in supporting adaptation and resilience amongst formal and semi-formal rural communities (e.g., VSLAs and SACCOs) through an intersectional lens;
  2. Has a predominant focus on Africa but also additional other non-African countries in the AFI Network;
  3. Explores how these enhancements have taken gender and youth perspectives into account ;
  4. Explores specific relevant initiatives which have enhanced (or mitigated the impact of COVID-19) financial inclusion during the pandemic.

4. Key Deliverables and methodology

The Consultant will be required, along with AFI members and AFI Financial Inclusion Strategy Policy Manager, and other key stakeholders, to develop the key deliverables which include the following:

  1. One (1) comprehensive Guideline Note (25-30 pages, excluding annexes) which will achieve the objectives as stated above.
  2. One (1) PowerPoint Presentation with key insights from the Guideline Note.
  3. Info/datasheets which contain aggregated data/information extracted from data sources used, as well as sourced from interviews with representatives of AFI members.


  • Desk research (global literature of relevant case studies, reports and publications).
  • Key Informant Interviews (9 to 12) with a wide range of AFI members (but predominantly from African countries)

5. Timeline and consultant working days:

The consulting services will be provided from the date of signing the consulting agreement until 1 November 2021. The total number of consultant working days is not more than 25 days with all deliverables to be complete by 1 November 2021 the latest.

6. Travel:

Traveling is not expected during this assignment.

7. Consultant Experience:

The Consultant undertaking this assignment should have the following qualifications:

· Advanced degree in a field related to Law, Economics, Public Policy, International Development or another related discipline.

· Knowledge of and experience in financial inclusion, rural finance and digital financial services / Fintech.

· Significant experience in conducting research, assessment and evaluation in the area of rural financial inclusion and access to finance.

· Fluency in English.

· Strong experience in writing quality reports (preferably related to rural financial inclusion).

8. Reporting:

Throughout the contract period, the Consultant will be reporting to AFI’s Financial Inclusion Strategy Policy Manager.

9. Criteria for Evaluation:

  1. Academic Qualification; 10%
  2. Experience and technical competence of the key staff for the assignment; 50%
  3. Adequacy of the proposed work plan and methodology in responding to the Terms of Reference:

· Technical approach and Methodology10%

· Workplan10%

  1. Sample work – Relevance to Assignment and demonstrated experience in writing; 20%

Total : 100%

How to apply

How to Apply

Interested applicants are expected to submit a proposal with updated CV and using template given (Download the RFP document here) by email to AFI’s Procurement & Contracts Office at by 02nd August 2021.

The final decision on selection of a consultant/consulting firm for this project rests with AFI management team and with the Inquiry. Only shortlisted and successful consultants will be contacted

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