Sponsoring Agency: Alliance for a Green Revolution in Africa
Type of Fund: Challenges, Competitions or Prizes
Deadline Available: Available
Deadline Date (mm/dd/yyyy): 05/07/2021
Size of the Fund: USD $50,000 to $500,000
In this call, Alliance for a Green Revolution in Africa (AGRA) is seeking concept notes from credible organizations that offer sustainable, scalable, and innovative solutions that improve the reliability and provide assurance on the financial statements of Agricultural SMEs.
These solutions might include financial management and record keeping tools, audit solutions, alternative financial reporting systems, digital record keeping, etc. More reliable financial statements increase the chance of Agri SMEs to access funding and investment opportunities.
According to the recently launched report ‘Mobilizing Agricultural Finance – Toward a Common Language Between Lenders and Agri-SMEs in Sub-Saharan Africa’, Agri-SMEs often lack the financing they need to grow and expand their business. Lenders struggle with the high cost of serving these businesses which are often located in rural, hard to reach areas. In addition, the informal business practices and report mechanisms of these businesses make it difficult to assess the creditworthiness of agri-SMEs. On the other hand, agri-SMEs struggle to determine the information that lenders need to finance their businesses. Lenders tend to have unpredictable information requests, which when combined with the large amount of information requested upfront, leads to time intensive sourcing, pre-screening and evaluation process.
To help address this financing gap through improved information flows between lenders and agri-SMEs, a standardized set of bankability metrics were developed to be used during pre-due diligence assessments of SMEs. Although the financial performance metrics are straightforward agri-SMEs face challenges in providing financial statements and records that are reliable and with the level of assurance acceptable by most lenders. Agri-SMEs are usually not able to keep proper books of accounts of their daily business activities and cannot afford the cost of audits thus locking them out of financing opportunities. This call seeks for solutions that can address the problem of unreliable and lack of assurance on the financial statements provided by SMEs.
Scope of Work
AGRA hereby requests for concept notes for scalable and sustainable innovative solutions that will improve the reliability and assurance of financial records for Agri-SMEs in Kenya, Rwanda, Tanzania, and Uganda.
The innovations should offer a solution at scale to the following overarching questions:
• What innovative solutions can support SMEs to deliver the equivalent of audited financial statements in a less cumbersome and costly manner? The solution can include things like mobile accountants, mobile phone-based record keeping, picture based accounting, etc.
• What add-ons or type of services can be deployed on top of existing accounting systems to give financial statements the reasonable assurance required by lenders? The existing accounting systems include but are not limited to Sage, Excel, QuickBooks, manual accounts, etc.
• What solution can support SMEs to undertake their financial record keeping more easily in a visible and transferrable manner to lenders? Digital record keeping?
• How much does it cost an SME to adopt and implement these solutions if rolled out on scale (1,000+ SMEs)?
• Apart from audit, what else can be done to ensure that financial reports provide users with a faithful depiction of the transactions the agri-SMEs conduct?
• What digital technologies can make financial recording and reporting more valuable and useful? How can the digital technologies satisfy the full range of the lender’s needs?
AGRA and Aceli’s evaluation panel will select one to three of the proposed solutions and provide funding of between USD 25,000 and USD 100,000 to allow the providers to show how the solution:
• delivers the required financial information (as per the bankability metrics) with an acceptable level of assurance that this information represents the performance of the SME
• works at Agri SME level
• presents an affordable option to the users
• can reach scale (1,000+ SMEs) within three years
• is user friendly to employees who may not be financially savv.
July 1, 2021 to June 30, 2022.
Interested institutions/organizations must meet the following eligible requirements:
• Be operational in one or all the 4 East African countries (Kenya, Rwanda, Tanzania and Uganda).
• The organization’s registration must be current.
• The organization must be in a sound financial condition.
• The organization must have sufficient existing capability/capacity to deploy the proposed solution.
• The organization must have a demonstrated excellent past performance record.
• The organization must have accounting systems acceptable to AGRA/Aceli Africa and corporate integrity/ethics.
• The organization must not be excluded from the eligibility to receive AGRA’s/ Aceli Africa’s donor- provided funds.
• The concept note must clearly have details on the proposed implementation of the scalable innovation.
• If an institution/organization meets the above eligibility criteria, AGRA will request additional documentation to be submitted as part of the pre-award process. Organizations are advised that any funds made available are subject to AGRA’s strict accountability and audit test.
No promise explicit or implicit is made to any Institutions/organizations/firms submitting a concept note to AGRA on making any funds available (including reimbursement of document preparation costs).
More information at: https://agra.org/call-for-concept-notes-agra-aceli-africa-innovation-challenge/