Ukraine: Oschadbank - Strengthening Capacities for MSME Lending

Procurement ref:

66453

Location:

Ukraine

Business sector:

Financial institutions

Project number:

48800

Funding source:

Technical Cooperation Funds

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

28 Sep 2016

Closing date:

31 Oct 2016   at  23:59   Kyiv

Ukraine: Oschadbank - Strengthening Capacities for MSME Lending

The Procurement Notice has been modified on 24 October 2016 to clarify the following:

  1. Terms of Reference, Section 5, Reporting and Deliverables

“Within 6 months from commencement of the Assignment:

... f) Two regional branches identified and a work plan is developed to turn them into MSME lending champions;

“Within 12 months from commencement of the Assignment:

… c) MSME lending champion branches are fully operational.

 “Additionally, at the end of the assignment (i.e. after 12 months), the following outputs and results shall have been achieved, at a minimum:

Number of branches participating in MSME lending: 650

MSME loan portfolio: min UAH 8,8 billion (USD 350 million) 

Number of loans made: min 5,450

  1. Two regional branches will participate in the pilot, while extension to other branches is to be implemented by Oschadbank individually after the project end. It is therefore supposed that the Consultant will implement pilot activities only in two branches.
  2. The MSME gross portfolio target has been updated. Now it is UAH 5.0bn instead of UAH8.8bn. This target should be achieved by the end of the assignment (i.e., by end of 2017). At the end of 2015 MSME gross portfolio was UAH 2,4 billion. It has not changed significantly since then.

2.         The Closing Date is extended until 31 October 2016, 23:59 Kiev time.

PJSC Savings bank of Ukraine (“Oschadbank”) is a Ukrainian successor to Soviet Savings Bank, and is ranked second largest by assets and retail deposits as of 1Q2016. Through the largest branch network in the country, it provides services to corporates, micro, small and medium enterprises (“MSME”) and retail customers.

On 11 February 2016 the Cabinet of Ministers’ approved the Guidelines of the strategic reform of the state-owned banks (the “SOB Strategy”). The paper introduces the OECD corporate governance standards and establishes the level-playing field standards and a commercial focus of the Oschadbanks’ operations. It also declares the Government’s plans to consider partial privatisation of the two core banks (Oschadbank and Ukreximbank) in 2018 and their full privatisation by 2020. Both banks are also expected to undergo significant operational transformation. The SOB Strategy defines the key target customer segments, performance indicators, and sets implementation deadlines.

Oschad is expected to capitalise on its large branch network and substantially expand retail and MSME business in order to diversify its loan book away from large corporate exposures. The European Bank for Reconstruction and Development (the “EBRD” or the “Bank”) intends to support Oschadbank with its plans to step up the development of its MSME lending, including strengthening of underwriting, risk management, portfolio monitoring and collection/work-out functions.

Oschadbank wishes to engage a consultant (the “Consultant”) to assist Oschadbank with increasing its efficiency and competitiveness in providing MSME loans in Ukraine on a sustainable basis including through identification of gaps, impediments and risks in the current MSME lending system and implementation of institutional capacity building measures.

The MSME credit advisory services will allow not only to identify gaps in the key aspects of working with MSME but will introduce a systemic approach to MSME lending, help develop and implement the lending methodology, policies, processes, procedures and systems at Oschadbank in MSME lending. The objectives of the Assignment are therefore focused on the following aspects of MSME lending:

  1. Effective functioning of the MSME department;
  2. Strengthening of underwriting, risk management, portfolio monitoring, collection/work-out functions;
  3. Improvement of efficiency, standardisation and automatization of business processes.

Terms of reference for the Assignment are attached via this link.

Assignment Duration: The Assignment is expected to start in around November 2016 and have an estimated overall duration of 12 months. No extension to this Assignment is envisaged.

Maximum Cost Estimate Available for the Assignment: EUR 280,000.00; 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 Client will have to pay indirect taxes/VAT element to the services directly to the Consultant unless otherwise agreed

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

Funding Source: It is expected that the Assignment will be funded by Technical Cooperation Donor funds managed by EBRD. Please note selection and contracting will be subject to the availability of funding.

Eligibility: There are no eligibility restrictions.

Consultant Profile: Corporate services are sought. The Consultant will be a firm or group of firms with experience and expertise in:

  1. assisting commercial banks with developing MSME business and marketing strategies, strengthening credit and risk management;
  2. standardization, optimization and automation of business processes, proven ability to help banks with monitoring and work-out functions;
  3. track record in increasing market share of loans and/or other credit products;
  4. proven ability to help banks with devising and implementing lending policies;
  5. understand, recommend and implement appropriate training programs for staff;
  6. ability to deal with difficult issues in a sensitive but firm manner;
  7. experience in completing at least one MSME project in emerging countries; experience in one of the former Soviet Union countries;

The Consultant should also have relevant experience in the CIS region.

The Consultant’s team is expected to comprise at a minimum of the following key experts:

  • Project coordinator with:
  • Strong experience (ideally more than ten years) in banking and/or consulting responsible for deploying strategic/ transformation projects;
  • Fluency in both Russian /Ukrainian and English is essential.
  • Project manager/senior MSME lending expert with:
  • Relevant qualifications and significant professional experience (ideally more than ten years) in MSME strategy in the CIS region/or other countries;
  • Proven track record of business processes and/or technology optimization for MSME lending;
  • Good knowledge of the National Bank of Ukraine requirements and standards;
  • Good knowledge of financial analysis of MSME;
  • Required for twelve months during the Assignment.
  • Expert(s) in MSME lending with:
  • Relevant qualifications and significant professional experience (ideally more than four years) in MSME lending in a commercial bank and/or a consultancy firm in the similar region;
  • Proven track record in developing and marketing various MSME products, ideally in the CIS region;
  • Required to be physically present in Ukraine, including in the regions, for at least eleven months during the Assignment.        
  • Risk assessment and scoring specialist with:
  • Relevant qualifications and significant experience (ideally more than four years) in risk management and devising scoring systems for MSME lending;
  • Required for up to four months during the Assignment.
  • Marketing and product development specialist with:
  • Relevant qualifications and significant experience (ideally more than four years) in devising marketing strategies and plans in MSME area for commercial banks with similar profile;
  • Required for up to three months during the Assignment.
  • IT specialist with:
  • Significant professional experience (ideally more than six years) in business processes automatization for MSME operations in a commercial bank;
  • Relevant IT qualifications;
  • Required for two months during the Assignment.

The Consultant is required to demonstrate good knowledge of the local market and mobilise experts quickly. Ability to communicate in English and Russian/Ukrainian languages would be an additional asset. Long-term experts shall be based full-time in Ukraine. A good mix of international and local experts is required.

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

a) Brief overview of the firm/group of firms including company profile, organization and staffing;

b) Details of previous project 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) 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;

d) Brief technical proposal for assignment implementation, including the Consultant’s understanding of the objectives, the proposed approach and methodology to a successful delivery of the Assignment, a work plan with milestones, and a team input summary indicating the number of working days allocated to the Assignment by each Key Expert. No financial proposal is required to be provided as part of submission.

e) 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, excluding CVs and Consultant Declaration Form and Contact Sheet.

The complete expression of interest (including CVs, Contact Sheet, Declaration Form) are to be submitted in English and Russian, by e-mail, preferably as one file (pdf or Word), clearly labelled “Expression of Interest for Ukraine: Strengthening Capacities for MSME Lending”, shall be submitted to the Executing Agency’s contact person given below with a copy to EBRD no later than the closing date/time.

Executing Agency:

Sergey Kishkurno
Deputy Head of Project Management Office
Tel.: +380 (44) 247 37 22E
mail: KishkurnoSM@oschadbank.ua

The EBRD's Contact Person:

Elena Kolodiy
Technical Cooperation Advisor
Tel: +44 207 338 6765
Email: KolodiyO@ebrd.com   

Notes:
1. The selection will normally be made from responses to this notification only. Shortlisted consultants will not be asked to submit formal proposals. The highest-ranked Consultant will be selected from a shortlist and be invited to negotiate the contract.

2. The Evaluation criteria and their respective weightings are as follows:

a) Specific experience and capability of the consultant firm(s) related to the Assignment - 30%:

b) Quality of the Consultant’s technical proposal - 30%;

c) CVs of the key experts – 40%.