Kazakhstan: Forte Bank: MSME Lending Capacity Building

Clarification issed 25/01/2017:  The financial proposal in English will be sent to the Client's contact person in a separate sealed envelope clearly marked with tenderer's name and labelled "Financial Proposal - ForteBank: MSME Lending Capacity Building - DO NOT OPEN UNTL COMPLETION OF TECHNICAL EVALUATION" to reach the Client by 31 January 2017, to be sent to the following address: Ms. Dinara Raizhanova, Forte Bank, 8/1 Dostyk Street, 010017, Astana, Kazakstan.

 Project Description: ForteBank (the “Client”) has requested the European Bank for Reconstruction and Development (the “EBRD” or the “Bank”) to provide technical assistance in MSME Lending Capacity Building (the “Project”).

ForteBank is the 8th largest bank in Kazakhstan with total assets of just over USD 3 billion and equity of USD 0.5 billion at end-1Q16. It offers a wide range of retail, corporate and SME products via its distribution network of 19 branches and 145 outlets in 39 cities and rural settlements of Kazakhstan.

The proposed Project aims to support ForteBank to improve the efficiency of its MSME lending operations. Results of an EBRD Due Diligence undertaken in June 2016, found weaknesses in the MSME Lending practices and transaction cycle of the Client. MSME credit risk management and underwriting techniques were areas noted that would need improvements and modernisation.

Assignment Description: The Client now intends to retain a consulting company (the “Consultant”) to assist in expanding its capacities in MSME lending effectively and efficiently provide MSME loans to enterprises across Kazakhstan on a sustainable basis (the “Assignment”).

The main aim of the Assignment is to support the Client with advice and practical information concerning:

1. improvement in MSME credit risk management and underwriting techniques;
2. training of specialised bank staff in areas pertaining to MSME lending; and
3. enhanced performance measurement and reporting methodology aimed at continued operational strength in the face of an evolving business.

The selected Consultant is expected to provide the following services:

Risk management and underwriting

1. Conduct an assessment of the current MSME operations at Forte, including both origination procedures and monitoring, to identify key weaknesses and impediments to further development of MSME lending operations;

2. Provide practical recommendations aimed at improving Forte’s procedure  to MSME lending:

1. Optimise existing strategic approach to MSME lending with focus on: a) selection of target segments and product lines; b) choice of optimal pricing strategy; and b) seamless incorporation of the MSME lending strategy within Forte’s general mid-term strategic goals.
2. Improve the client’s MSME loan approval and monitoring processes aimed at enhancing the quality of its MSME portfolio.
3. Develop monitoring of environmental and social aspects of projects in line with EBRD’s Environmental and Social Policy.
4. Assess and propose improvements to the methodology that concerns problem loan workout procedures.

3. Assist in implementing these recommendations.

Training

1. Offer three types of training to Client personnel involved in MSME Lending:

1. Generalist training: Train the Client’s loan officers on general business management topics such as key customer service skills, public speaking and time management.
2. Specialist training: Provide training to specialised Client personnel in:
   1. financial analysis;
   2. project valuation (with particular focus on oil & gas, mining and agricultural business);
   3. best practices in liquidity and market risks modelling and stress-testing;
   4. Basel III and its applications;
   5. modelling methodology design under IFRS 9;
   6. assessment of instruments used to hedge financial risks; and
   7. stress-testing with multifactor models.
3. Train-the-trainer: Ensure sustainability of training measures by coaching members of the ForteBank staff who will be responsible for delivering internal training to new loan officers. Help prepare training materials and curriculum for future use by the Client for internal training on identified topics. Oversee first training sessions in each identified subject conducted by the trained trainers for Forte’s staff to provide feedback.

Performance measurement and reporting

1. Undertake a review of internal reporting and advise whether its format is appropriate and quality sufficiently high to give Client management a detailed and accurate picture of bank operations and outlook.
2. Assist with implementation of additional elements into the reporting package to ensure cost- and time-efficient generation of data, strong quality and high value to management.

The Terms of Reference for the Assignment are available through this link .

Status of Selection Process: Interested firms or groups of firms are hereby invited to submit their proposals.

Assignment Duration: 18 months.

Maximum Cost Estimate Available for the Assignment: EUR 275,000 (exclusive of VAT).

The Consultant must determine whether any indirect taxes/VAT are chargeable on the proposed services and state the basis for such. If any indirect taxes/VAT are payable, the EBRD’s Client will have to pay indirect taxes/VAT element to the services directly to the Consultant unless otherwise agreed.

Funding Source: It is expected that the Assignment will be funded by the European Union Investment Facility for Central Asia. Please note selection and contracting will be subject to the availability of funding and signing of related project financing agreement between EBRD and ForteBank.

Eligibility: There are no consultant nationality eligibility restrictions.

Consultant Profile: Corporate services are required. The Consultant will have project experience and expertise in assisting banks with development of MSME business, strengthening credit and risk management, proven ability to help banks with devising and implementing lending policies, understand, recommend and implement appropriate training programmes for staff and preferably experience in or exposure to emerging markets and specifically of their banking sectors.

The Consultant will also be able to operate and provide training in English and Russian.

It is expected that the Consultant's team will comprise of the following key expert(s):

Key Expert 1: Project Manager/Team Leader (Senior MSME Lending Expert)

• Professional experience and relevant qualifications (ideally more than 10 years) in MSME lending and demonstrable knowledge of Kazakhstan’s banking and MSME finance sector;
• Preferably at least 10 years of expertise in the development of MSME lending and risk assessment methodologies and establishment of relevant business processes;
• Preferably at least 10 years of experience in managing similar assignments in the Commonwealth of Independent States (“CIS”) region and/or other countries in the EBRD’s countries of operation (“ EBRD CoO”);
• Professional experience in conducting training on the entire transaction cycle for MSME lending with excellent communication, training, and presentation skills;
• Fluency in Russian and English is essential.

Key Expert 2: MSME Lending and Risk Management Expert

• Preferably at least 5 years of previous professional experience in credit risk assessment of MSMEs;

• Preferably at least 5 years of experience in the underwriting procedures of MSME lending, including pricing, loan structuring and monitoring;
• Preferably at least 5 years of experience in MSME lending in commercial banks in the CIS region and/or other countries in the EBRD CoO;
• Professional experience in conducting training on the entire transaction cycle for MSME lending with excellent communication, training, and presentation skills;
• Fluency in Russian and English is essential.

Key Expert 3:  MSME Advisor – Training Expert

• Preferably at least 5 years of experience in specialist training in financial analysis, project valuation, liquidity, market risks modeling and stress-testing, Basel III and IFRS 9;
• Preferably at least 5 years of experience in hiring and training of staff;
• Professional experience in conducting training on the entire transaction cycle for MSME lending with excellent communication, training, and presentation skills;
• Fluency in Russian and English is essential.

Submission Requirements: Interested consultants are hereby invited to submit proposals.

In order to determine the capability and experience of consulting firms, the information submitted should include the following:

a) Company/group of firms' profile, organisation and staffing (max. 2-4 pages);

b) Details of required experience of firm or group of firms and related assignments undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, percentage carried out by consultant in case of association of firms or subcontracting, main activities, objectives;

c) Proposed work plan and methodology;

d) CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives;

e) Financial Proposal;

f) Completed Consultant Declaration Form and Contact Sheet, the template for which is available at:

http://www.ebrd.com/pages/workingwithus/procurement/notices/csu/contact_sheet.doc.

The above information should not exceed 20 pages in total, excluding CVs, which should not exceed 2 pages each, Consultant Declaration Form and Contact Sheet.

The technical proposal (including CVs, Contact Sheet, Declaration Form) are to be submitted in English and Russian electronically by e-mail, clearly labelled ForteBank – MSME Lending Capacity Building, to the Executing Agency’s contact person no later than the closing date. One additional copy shall reach the Bank’s contact person by the same due date. The proposal shall be one file (pdf). The Client reserves the right to reject applications of firms submitting more than one file. Only if any limitation on the permissible file size is exceeded, the Consultant may split the proposal into further files.

The financial proposal in English will be sent the Client’s contact person in a separate sealed envelope clearly marked with tenderer’s name and “Financial Proposal - ForteBank: MSME Lending Capacity Building - DO NOT OPEN UNTIL COMPLETION OF TECHNICAL EVALUATION”

Executing Agency: ForteBank
Name of contact: Dinara Raizhanova
Title: Head of FI
Tel: +7 (7172) 59 99 99
E-mail: draizhanova@fortebank.com; fi@fortebank.com

The EBRD's Contact Person:
Name of contact: Larissa Gosling
Title: Selection Advisor
Technical Co-operation
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
Tel: +44 207338 6338
Email: gosling@ebrd.com

Important Notes:

1. The selection will normally be made from responses to this notification only. The highest-ranked Consultant will be selected from a shortlist and will be invited to negotiate the contract, subject to availability of funding.

2. The evaluation criteria are:

a) Experience, qualification and competence of the Consultant and the proposed team related to the Assignment – 1) experience in assignments focused on MSME Lending Capacity Building, 2) knowledge of the local banking sector and relevant experience in the country, and 3) qualifications and competences directly related to the Assignment (40%).
b) Adequacy of proposed approach and work plan to the TOR: 1) understanding of Assignment and relevance of the proposed approach and 2) work plan and team assignment (30%).
c) Qualification and experience of key experts proposed (30%).

The minimum technical score (St) required to pass is:  70.       

Please note that only the Financial Proposals from Consultants passing the minimum technical score (St) will be opened.  The lowest evaluated Financial Proposal (Fm) is given the maximum financial score (Sf) of 100.  The formula for determining the financial scores (Sf) of all other Proposals is calculated as following:

Sf = 100 x Fm/ F, in which “Sf” is the financial score, “Fm” is the lowest price, and “F” the price of the proposal under consideration.

The weights given to the Technical (T) and Financial (P) Proposals are:
T = 80 and
P = 20

Proposals are ranked according to their combined technical (St) and financial (Sf) scores using the weights (T = the weight given to the Technical Proposal; P = the weight given to the Financial Proposal; T + P = 1) as following:  S = St x T% + Sf x P%.