Facility Round 2 | Call for Proposals
Deadline: Apply by August 2, 2019
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down,
simply by spending his money somewhere else.” -Sam Walton
About FSD Zambia
Zambian Financial Sector Deepening Limited (FSD Zambia) is a Zambian organization working closely with key players throughout the economy to ensure that all Zambians are financially healthy, particularly the most excluded and underserved. We help rural families, women, youth, low-income people, and other households in Zambia to understand and access a wide range of sustainable, comparable and affordable financial services. To expand financial inclusion, we collaborate with both public and private sector institutions to make financial markets work better for low-income market segments. FSD Zambia enhances trust between clients and suppliers of financial services by helping to increase understanding, expand innovation, and lower costs. In this way, all women, men, girls, and boys can learn about, choose, and use a wide range of financial services according to their needs. FSD Zambia enjoys the active support of financing partners: UK Aid, Swedish Sida, Comic Relief and the Rural Finance Expansion Programme (RUFEP).
About the F3C Facility
In March 2018, FSD Zambia launched a new innovation facility called the Finclient Centric Cycle (F3C). F3C focuses on providing technical and co-financing support to financial service providers in Zambia in the design and delivery of inclusive and customer-centric financial services. The FinClient Centric Cycle (F3C) is a response to market failure resulting from a mismatch between demand and supply of financial services which accounts for the financial exclusion of most of the low-middle income market segments. Most financial institutions in Zambia are interested in moving down-market to increase their financial services depth and market penetration. However, lack of capacity and adequate investments in market research and client-centered product development processes often hinder them from effectively addressing the opportunities presented by underserved or un-served market segments. F3C aims to stimulate more client-sensitive and effective financial services in Zambia, based on the human-centered design (HCD) – a creative approach to problem-solving.
“The F3C assists market actors to translate consumer insights into innovative and viable financial service solutions.”
Focus for the F3C Round 2
FSD Zambia is pleased to announce the second competitive round of the the F3C facility. This round
focuses on three areas:
• Financial service solutions for rural-based enterprises;
• Financial service solutions specifically tailored to women and youth; and
• Digitalisation of savings group operations, and informal-to-formal financial service linakges
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Financial service solutions for rural based enterprises
Motivation In Zambia, most rural based micro small & medium entrepreneurs (MSMEs) face problems in growing their businesses due to limited access to financial services such as investment and working capital facilities. A report by Manju Kedia Shah, 2008, found that there are about 1.02 million informal MSMEs in Zambia, along with about 30,000 formal MSMEs. About 90% of both formal and informal MSMEs have no access to financial services. However, this market segment has potential to grow, and provides huge business opportunities for financial service providers (FSPs) for market expansion and penetration in rural areas. FSD Zambia has already demonstrated one innovative financing model for rural based traders.
FSD Zambia seeks financial service providers interested and committed to developing and delivering customer – centric financial services that are specifically tailored to the financial service needs of the rural based MSMEs.
Financial service solutions for women and youth
Motivation Financial services providers in most developing financial markets usually do not consciously invest in addressing the financial services needs of women and young people, reaching far less targets than the market potential. FSD Zambia wants to support responsive products and services designed and delivered for equitable financial inclusion and realization of the investment initiatives of women and young people.
FSD Zambia seeks applications from financial service providers interested and committed to developing and delivering well-tailored financial service solutions specifically for women and young people.
Motivation Savings groups meet regularly, usually weekly or bi-monthly, to save money, borrow and meet some social goals based agreed self governing rules. In general, members can save varying amounts and borrow about three times their savings. Members normally pay back loans with interest over a period of one to three months. Amounts from the social fund are generally provided either as an interest-free loan or grant. After 9 to 12 months, groups distribute all the money saved, plus the interest earned, to the members prorated (usually) based on their savings. This distribution is referred to as a ‘share-out.’ After the share-out, members begin another cycle of saving and borrowing.This approach has proved to be low-cost, highly sustainable, and extremely profitable for the member-owners while achieving significant scale in both rural and urban areas in Zambia. As saving groups are increasingly becoming financially viable, need for digitalisation of operations and linkage to formal financial institutions is inevitable in the pursuit of efficiency, security and value added services. FSD Zambia seeks applications from Fintechs interested in digitalizing operations of savings groups as well as financial service providers interested in developing and delivering financial service solutions to members of savings groups.
Digitalisation of savings group operations and informal -formal linkages
How does it work?
The F3C starts with an orientation to the Human Centered Design (HCD) methodology and tools. The financial service provider then invests in a market segmentation and client profiling process which also involves getting to know the concerns and financial service needs of the target group. Then an iterative process of product design, prototyping, and redesign occurs so product ideas are tested against the realities of client needs. Once there is a sign off of the prototype, the product can then be launched for pilot testing. Pilot testing may move to roll-out or backward to redesign. In principle, proceeding forward on any stage requires a positive outcome and sign off. FSDZ will provide technical and financial support to selected partners throughout the entire product development cycle. The F3C has four major components, namely: understand, design, test, and evaluate.
In this round, proposals are invited for new ideas and/or product prototypes: • New ideas for innovative financial service to specific market segments: The ideas must ideally be
game changers in the financial inclusion space and will be validated through consultations with the targeted clients. The ideas, if selected, will undergo all the four phases of F3C.
• Product prototypes targeting specific market segments: Product concepts or prototypes resulting from a comprehensive market research but requiring target market validation before proceeding to pilot testing. The prototypes, if selected, will undergo the three phases of F3C; design, test and evaluate.
Applicants are allowed to submit more than one application for new ideas and/or existing product prototypes.
Application forms can be downloaded from the FSD Zambia website or made available by email request to [email protected].
“Applicants are required to obtain sign off from senior executives, preferably Chief Exectutive Officer or Managing Director level, before submitting an application. Once successful, Board sign off will be required before entering into the F3C partnership and financing agreement. ”
Who is eligible?
All financial service providers and distribution channels for financial services. This includes the following: • Commercial banks and microfinance institutions • Digital financial service providers • Mobile network operators • Technology and platform developers • Cooperatives, community based organisations and NGOs • Other distribution channels and aggregators
Getting involved: How to apply
Promoting business models that translate consumer insights into business viability and superior client value
Deadline for applications
For this particular round, the deadline for receipt of your application is no later than 2nd August 2019 at midnight (+2 CAT). Any applications received after this date will not be considered.
Benefits to selected partners
• Dedicated technical and financial assistance throughout the cycle • Co-financing of elements during the pilot phase • Knowledge and skills development in HCD, rapid prototyping, product development of inclusive financial
products • New or expanded market reach • Risk sharing for investments in new ventures • Possible learning tours to successful financial service providers in inclusive financial service solutions. • New or improved customer centric DNA
Information sessions
FSD Zambia will conduct information sessions on this round at FSD Zambia offices on the following dates: • Monday, July 22 : 14:30 - 16:30 hours • Tuesday, July 23 : 14:30 - 16:30 hours • Wednesday, July 24 : 14:30-16:30 hours Kindly book your session using the contacts indicated below.
For more details contact: Email: [email protected] Mobile: +260 211 84 8065/6 53 Leopards Hill Road Kabulonga Lusaka
Funded by:
