Request for Proposal Water and Sanitation Services Micro, Small & Medium Enterprise Landscaping Assessment in Southeast Asia

I. Consultancy Services Overview

Water.org is seeking an experienced consulting firm to complete a deep-dive landscape assessment building the business case for capital providers to lend to micro/small/medium enterprises (MSMEs) focused on water supply and sanitation (WSS). The study will include a segmentation analysis of the WSS MSME sector, a deep dive analysis of several key WSS MSME sub-segments, and recommendations of Water.org’s added value in Cambodia, Indonesia, and Philippines.

II. About Water.org

Globally, about 750 million people – one in nine – lack access to safe water while another 2.5 billion people – almost one in three – lack access to a toilet. Water.org is an international nonprofit organization founded by Gary White and Matt Damon dedicated to ending this global crisis. We seek to pioneer innovative, market-based solutions to ensure all people have access to safe water and sanitation; giving women hope, children health, and communities a future. To date, we have reached over 63 million people in 17 countries with water and sanitation solutions.

III. Consulting Project Background

Water.org partners with financial institutions, such as commercial banks and microfinance institutions, to develop household WSS lending portfolios through our innovative WaterCredit model. In Southeast Asia, the model has successfully been deployed in Indonesia, Philippines, and Cambodia. Since 2014, Water.org has partnered with 52 financial institution partners to deploy more than 3.3M household loans to mobilize $754M in capital for water and sanitation access, improving the lives of 12 million people. While these results represent a significant achievement, Water.org acknowledges more needs to be done given that 31 million and 63 million people across the three countries still lack access to basic water and sanitation respectively.

To address this issue, Water.org seeks to catalyze commercial lending by financial institutions – from small microfinance institutions to large commercial banks – to micro, small and medium enterprises (MSMEs) within the WSS sector. Given the outstanding need for clean water and sanitation access, there is significant opportunity for WSS MSMEs to expand their businesses and improve water supply and sanitation access. However, many WSS MSMEs struggle to access the financing necessary to expand their businesses and serve more customers. This unmet demand presents a business opportunity for private enterprises to bridge this financing gap and capitalize on the untapped market potential.

Based on Water.org previous assessments, financial institutions are found to be cautious about lending to WSS MSMEs due to a lack of data and understanding of the market. They also see lending to these businesses as risky. Many WSS MSMEs struggle with poor governance, weak financial systems, and a lack of documentation, making it difficult for them to access loans. Water.org is working to strengthen WSS MSMEs’ operations and ability to access financing from financial providers. These sub-sectors include: (a) Water Kiosks; (b) private utilities; (c) businesses that treat wastewater; (d) businesses that improve water efficiency; (e) businesses that manufacture, distribute, install, or retail water or sanitation products; and (f) businesses that provide water supply or sanitation services.

IV. Consulting Project Key Activities

Water.org seeks to hire a consulting firm to conduct a detailed assessment of the WSS MSME landscape in Cambodia, Indonesia, and Philippines. This assessment will fill the current knowledge gap and help Water.org to build a strong case for capital providers to lend to WSS MSMEs. While there have been studies on the MSME sector in these countries (see References), none have focused on commercial financing. By collecting primary data of interviews with Water.org staff, partners, or other sector experts and secondary data; this landscape assessment aims to answer key questions that will guide Water.org’s future role in the sector:

What is the landscape of MSME-WASH financing in Cambodia, Indonesia, and Philippines?

What is the feasibility of financing to the prioritized sub-segments?

Where can Water.org add maximum value to the prioritized sub-segments?

 

Given these overall objectives, the key activities to be completed under this assignment include:

WSS MSME Value Chain Segmentation Analysis: Understand key trends in the WSS financing space.
The Consultant will conduct a rapid landscaping of the value chain within the WSS MSME sector in Cambodia, Indonesia, and Philippines to understand key trends in the WSS financing space. This includes assessing key policies driving MSME financing, key players, current financing options from various financial providers and the shortfalls, and major data gaps. The result of this analysis would help Water.org to shortlist a prioritized WSS MSME sub-segments based on size, potential impact, geographic distributions (island/province), specific focus on climate, etc.

WSS MSME Profiling: Prioritize and profile relevant MSME sub-segments​.
Based on the shortlisted MSME sub-segments from Water.org, the Consultant will then deep dive into profiling those segments to better understand the financing opportunity and feasibility within each of the three countries. In this activity, the Consultant will demonstrate the demand side of key players, business models, financing options and needs, and current coverage for each segments. Furthermore, the financers as the supply side also should be presented in willingness to finance loans to such MSMEs and challenges in financing. The result of this profiling would help Water.org to determine the potential market size to each prioritized MSME sub-segments.

Recommended Water.org’s technical assistance and potential pipeline for prioritized sub-segments.

The Consultant will identify existing WSS MSME technical assistance programs from other stakeholders. Then, recommend where Water.org can add maximum value in catalyzing commercial finance for WSS MSME of the prioritized sub-segments. Recommendations can include both new program initiatives to be implemented internally by Water.org, as well as strategic partnerships to be undertaken with external stakeholders.

V. ​Key Project Deliverables

By the end of the assignment, the Consultant will be expected to produce – in coordination with Water.org Southeast Asia – the following deliverables:

Inception Report – in a Powerpoint format to explain the methodology and data collection plans of each country to Water.org. This must be presented and consulted to Water.org by September 12, in advance of the next deliverable.

WSS MSME Value Chain Segmentation Analysis in 3 Powerpoint slides (1 per country) that includes the Consultant’s recommendations for sub-segments to prioritize for deep dive analysis. The analysis and results have to be presented and consulted with Water.og by October 12, in advance of the next deliverable.

WSS MSME Profiling in 3 Powerpoint slides (1 per country) that includes profiling of the prioritized sub-segments. The results have to be presented and consulted with Water.og within a workshop by November 12, in advance of the next deliverable.

Recommended Water.org’s technical assistance and potential pipeline in 1 Powerpoint format (combining all 3 countries) that includes the Consultant’s recommended potential pipeline for Water.org and technical assistance by December 12.

3 business case studies, between 2-4 pages explaining about the MSME market and business opportunity by country for financial institution audiences submitted to Water.org by January 2.

Final deliverables and raw data submitted to Water.org by January 12.

 

VI. Indicative Project Budget and Timeline

Water.org encourages bidders to submit a detailed budget for this assignment using Water.org’s budget template: Water.org Evaluation Budget Template.xlsx. The budget for this assignment inclusive of all applicable taxes should not exceed USD 90,000 (ninety thousand). The proposed timeline for this study is August 12th 2024 to January 12th, 2025.

VII. Proposal Submission Guidelines

Interested consultants and firms are requested to submit their written proposals and budget no later than June 23rd, 2024.

Kiki Tazkiyah ([email protected])

Rafael Castillo ([email protected])

All proposals should include the following information:

Consultant/firm’s expertise regarding market assessments, financial landscape, MSME lending, the WSS sector, regulatory framework in the 3 countries, and/or any combination thereof

Proposed approach to project

Proposed methodology and possible data sources to gather and synthesize data for the identified deliverables

OR proposed methodology to answer the identified research questions

Proposed project timeline and budget

List of key personnel to be assigned to project

List of previous projects completed similar to this proposal

List of references

Proposals will be considered on a rolling basis and evaluated on a value-for-money basis utilizing the information provided by the proposal. Water.org will contact applicants on a rolling basis.

 

​​References

​​Mutra, Willetts, & Triwahyudi. (2016). Sanitation entrepreneurship in rural Indonesia: a closer look. Environment, Development, and Sustainability.

​OECD. (2019). Making Blended Finance Work for Water and Sanitation: Unlocking Commercial Finance for SDG 7 (Policy Highlights). Retrieved from OECD.org: https://www.oecd.org/environment/resources/Making-Blended-Finance-Work-for-Water-and-Sanitation-Policy-Highlights.pdf

​Tetra Tech; USAID. (2018). Cambodia Investor Landscape Assessment Report: Water, Sanitation, and Hygiene Finance (WASH-FIN). Retrieved from USAID: https://pdf.usaid.gov/pdf_docs/PA00ZDN3.pdf

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