USAID LIFE RFA #5

USAID Livelihoods and Inclusive Finance Expansion (LIFE)

REQUEST FOR APPLICATION (RFA) #5

Issuance Date: 12/20/2018

Closing Date: 1/16/2019 

Grants maximum amount: range between $15,000 and $75,000

Anticipated Number of Grants: multiple Grants up to $200,000

Project Description

LIFE is a 5-year USAID-funded project implemented by Palladium. The purpose of the LIFE project is to improve economic opportunities and livelihoods of low-income individuals and microenterprises by expanding and strengthening microfinance associations’ and member institutions’ services and enhancing entrepreneurs’ business skills. To this end, LIFE will improve livelihoods, strengthen microfinance activities and advance inclusive finance. Inclusive Finance, also referred to as financial inclusion, is defined as “universal access to a broad range of financial services, at a reasonable cost, provided by a diversity of sound and sustainable institutions.” LIFE will consolidate the gains made under the Lebanon Investment in Microfinance Program (LIM) and expand inclusive finance to the unbanked and higher-risk, micro business clientele.

Project Goal

The USAID/Lebanon LIFE project will strengthen livelihoods, advance the microfinance industry, and inclusive finance, in order to improve economic opportunities for under-served entrepreneurs and recipients of microfinance services.

Project Objectives

LIFE will accomplish this by:

1. Supporting inclusive finance that will bring more clients into the financial ecosystem by promoting significant policy/institutional reforms and building the capacity of the Lebanese Microfinance Association.

2. Helping microfinance institutions (MFIs) expand their range of products and services to more vulnerable populations, particularly low-income women, youth, and the physically disabled in conflict prone rural areas.

3. Supporting entrepreneurs and microenterprises to build their business capacity, access formal financial services, and establish sustainable livelihoods.

Purpose of this RFA

For the purpose of this RFA, the project will use grants to support achievement of LIFE results under Component 2-Microcredit.

LIFE will use grants to assist those several MFIs which have retained ‘NGO-nonprofit’ status with limited outstanding capital. This grant plans to stimulate the market outreach of these Lebanese Microfinance Institutions for unbanked people in untapped geographical areas of Lebanon through the support for loan officers to garner new micro-credit accounts to support start-up and existing micro-enterprises within vulnerable communities.

The overall purpose for supporting these MFIs is:

1. To protect the presence in the MFI sphere for Non-Profits and their unique social mission.
2. To allow these MFIs to be resilient in the face of the expected consolidation and transformation within the Savings and Lending landscape. Particularly, as Commercial Banks begin to enter the ‘’unbanked’ demographic.

This round of grants is expected to:

1. Provide Financial Incentives “Financial Subsidies” paid to these MFI-nonprofits for the disbursement of new microcredit loans through loan officers in order to increase their market penetration and outreach to new marginalized areas and unbanked Lebanese population.

The MFIs will mobilize their own capital resources to disburse micro-loans whereas USAID Grants will be disbursed to pay financial incentives for new loan accounts disbursed through their loan officers allocated on this grant.

Eligibility Criteria:

Grants may be provided to non-profit organizations that are legally registered and recognized under the laws of Lebanon and meet the criteria established by ADS 219 and the LIFE project and provide corresponding supporting documents:

• Must be an active member of the Lebanese Microfinance Association
• Must be a Not-For Profit MFI “Microfinance Institution”, registered under the NGO umbrella and actively providing Access to Finance Services in Lebanese under represented areas
• The MFI Must have an active outstanding portfolio less than ten million USD
• The MFI is willing to expand its outreach through loan officers and target unbanked clients with at least 50% women and 50% new clients in Lebanese areas outside Beirut
• The MFI must demonstrate sustainability, management performance and strategic planning
• The MFI average loan size portfolio should not exceed $4,000
• MFIs willing to apply must submit their updated key performance indicators on outreach, disbursement and portfolio at risk for more than 30 days
• MFIs will report to the LIFE USAID program on a monthly basis regarding the loans disbursed through the loan officers to Lebanese nationals and submitted as a milestone for LIFE-USAID program
• Are willing and able to complete the process of issuing a DUNS number (required by USAID). For more details about DUNS numbers: http://www.dnb.com

Additional Eligibility Criteria specific for MFIs

The assisted organization's commitment to reach full financial sustainability must be accompanied by a plan outlining the major steps to be undertaken in the process of achieving this goal, including a realistic timetable for undertaking those steps, and defining periodic benchmarks by which progress toward the goal can be determined.

The Chief of Party may waive a requirement if a response to the RFA presents a valid justification, assuming approval from USAID.

Grant Details

• LIFE anticipates granting performance-based awards according to the proposed activities aligned with LIFE-USAID RFA’s objective and applicants’ eligibility assessment and capabilities.
• Grants period starts with a base period limited to no longer than 15 months. Grantees will be evaluated based on their performance and achieving deliverables that may qualify high performers for additional resources and those with low performance (not delivering) will be subject to a grant revision and reduction in the budget ceiling.
• Geographical areas of grant activities: Lebanon (South Lebanon, North Lebanon and Bekaa).
• Target population: micro-entrepreneurs including: low income youth, women, and physically disabled in rural areas.
• Clear and tangible plan for disbursing loans for end beneficiaries in Lebanon
• Capital loans are ineligible, USAID funds are to be used only as subsidies for loan officers.
• Grants outcomes include but not limited to disbursing affordable credit to the unbanked population in Lebanon
• Grant amount will depend on the applicant capabilities, portfolio, disbursement capacity and expertise. However, no grant shall be issued for an amount exceeding $75,000.

Other Conditions

• LIFE will not cover any pre-award expenses paid by the applicant
• LIFE and USAID reserves the right to fund any or none of the applications submitted in reference to this RFA #5.

Regulations

Grants will be administered in accordance with the following regulations as applicable.

• Automated Directives System (ADS) Chapter 303 Grants & Cooperative Agreements to Non-Governmental Organizations:  303.3.25 Fixed Amount Awards to Non-Governmental Organizations
• A Mandatory Reference for ADS Chapter 303: 303_mak Fixed Amount Award Entity Eligibility Checklist
• A Mandatory Reference for ADS Chapter 303: 303_mat Fixed Amount Awards to Non-Governmental Organizations
• ADS 302.3.4.13 Grants Under Contracts (GUCs)
• 2 C.F.R. 200.45 Definition Fixed Amount Awards
• 2 C.F.R. 200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts (as referenced in ADS 303.3.25.a.)
• 2. C.F.R. 200 Subpart E – Cost Principles for non-profit and educational organizations – used to negotiate award amounts and terminations per 2 C.F.R. 200.201 (b)(1))
• FAR Part 31 – Cost Principles for For-Profit organizations used to negotiate award amounts and terminations per 2 C.F.R. 200.201 (b)(1))