Agricultural Loan Repayment Consultant at Creative Associates International

Scope of Work

Technical Support to Conduct a Study on Repayment of Agricultural Loans by Small Holder Farmers in Nigeria

Background

The West Africa Trade and Investment Hub Activity (hereinafter referred to as the Trade Hub) was awarded to Creative Associates, Inc. by USAID to implement an Activity from September 4, 2019–September 3, 2024. The purpose of the Activity aims to catalyze economic growth in the West Africa region by attracting finance and investment, growing business linkages, and strengthening the capacity of the agriculture and trade sectors. This five-year activity will achieve its set objectives through a market-based approach. In Nigeria, its main objectives are: (i) increased productivity and profitability of farmers and firms; (ii) increased market linkages and smallholder farmer participation; and (iii) increased access to finance and investment. By working in partnership with the private sector and fostering co-investment, the Trade Hub will improve companies’ abilities to expand business operations, increase productivity, and create jobs that build on the talents and aspirations of Nigeria’s young and growing population.

Agriculture is the major contributor to Nigeria’s Gross Domestic Products (GDP) and smallholder farmers play a dominant role in this contribution (Mbah, 2016). However, their productivity and growth are hindered by limited access to agricultural inputs especially credit thus, leading to the decline in the performance of the nation’s agricultural sector. One of the major inputs identified over the years as hindering the development of the Nigerian agriculture is lack of finance in form of credit to procure inputs needed for massive agricultural production (Central Bank of Nigeria (CBN), 2018). As the issue of lack of fund has become a great challenge to investment in the sector, there is need to tackle it through the process of credit lending. Agricultural credit revolves around the act of making available fund to the farmers for the sole purpose of increasing their investment as well as output which will lead to improved standard of living. It is therefore an indispensable tool for achieving socioeconomic transformation of the rural communities which if well applied would stimulate capital formation and diversified agriculture, increase resource productivity and size of farm operations, promote innovations in farming, marketing efficiency and value addition while enhancing net farm incomes (Ohaka, 2013). It also enables the poor farmers to tap the financial resources and take advantage of the potentially profitable investment opportunities in their immediate environments (Mbam, 2017). However, lending has well been identified as a very risky enterprise because repayment of loans cannot be assured on the parts of the borrowers as its acquisition and repayment are fraught with several problems such as loan diversion, excessive bureaucracy, delay in loan disbursement, high interest rate, high cost of loan procurement among other constraints.

As part of the learning activities of this Activity, the Trade Hub is seeking the services of a consultant to conduct a study on understanding the modality, timeliness and other issues relating to repayment of agricultural loans by small holder farmers in Nigeria with a focus on the seven states (Benue, Cross River, Delta, Ebonyi, Kaduna, Kebbi, and Niger) and on the maize, rice, soybean, and cowpea value chains.

Though, there were several empirical reviews of the performance of banks and other financial institutions on credit administration and delivery to farmers, however, it seems that there is little or no in-depth study on repayment of loans/credit by small holder farmers in the study areas. There is therefore a gap in information on the small holders’ capacities to repay loans in the study areas, hence the need for this study.

Given the COVID-19 and overall insecurity context, the Trade Hub will work closely to identify how to safely conduct this action research. Where possible, in person interviews and focused group discussions (FGDs)will be held with fewer than 10 participants (including the project staff in charge of facilitating the discussion), to ensure the relevant social distancing measures. Gender and Youths composition will be prioritized among respondents to effectively capture diversity in the repayment of the loans across gender and other social groups,  If it is not possible to go to the field due to security concerns in certain locations, these exercises will be carried out remotely with the support of many local actors (through The Activity’s partners as well as the research firm’s network) via videoconferences where there is an internet connection; or by telephone interviews if there is no internet access. The Activity recognizes that adjustments might have to be made during implementation to accommodate security and health protocols.

Objectives of Technical Support

The Trade Hub Activity seeks the services of a consultant to provide technical support in conducting a study on repayment of agricultural loans by small holder farmers in Nigeria. This research will include an in-depth qualitative study among smallholders in Nigeria. The purpose of the study is to help gain an understanding on the small holders’ capacities to repay loans in the study area and how it affects the private sector investments of the Trade Hub grantees. The study will also collect data that will complement existing studies on agricultural loans repayment in West Africa. The study should be able to describe the socioeconomic characteristics of smallholder farmers loan beneficiaries; determine the amount of loan obtained and repaid by the smallholder farmers; determine the effect of socio-economic characteristics of the smallholder loan beneficiaries on loan repayment; and analyze the constraints to the repayment of agricultural loans.

Specific Objectives

The Activity is looking for a consultant to lead the following activities:

• Designing a methodology to conduct the study, incorporating Trade Hubs recommendations on how to carry out this learning activity. The consultant is expected to work closely with the Trade Hub MEL Team in preparing the research methodology and data collection tools.
• Creating and validating the data collection tools (i.e., focus group protocols, Key Informant Interviews guides, and other relevant tools).
• Incorporate innovative research approaches in the methodology on how to collect data, given the local health and social context.
• Define a sample methodology that is balanced and representative within the focus states, LGAs and communities that the Trade Hub partners are already implementing.
• Write an analytical report about the qualitative data collected through the information gathering - key informant interviews, and focused group discussions as well as the study findings and or recommendations.

Geographical Scope of Study

Through its co-investment partnership, the Trade Hub provided support to 75218 smallholder farmers in the 2021 farming season to increase their productivity and improve their livelihoods across seven targeted states (Benue, Cross River, Ebonyi, Kaduna, Kebbi and Niger state) and 4 value chains (Rice, Maize, Cowpea and Soybean). Support provided includes training, input financing, extension services and access to market.

Consultant Profile

The selected Consultant should have demonstrated experience of at least 7 years in social research, qualitative research, agricultural loans and selected value chain market assessments. It is requested that the consultant has experience in conducting social research in at least two or more of the targeted states in Nigeria. Demonstrated experience in published research articles is preferred. The consultant should have the capability to speak local languages in implementation areas of the Trade Hub.

Reporting & Supervision

The Consultant will report to the Trade Hub MEL Director, the MEL Director will be responsible to review the report, share them with the MEL Team (both field office and HQ), collect feedback, share the feedback with the consultant, and approve all technical documents. The technical team, including Chief of Party (COP) and PPP technical lead, will review the report, and will provide their feedback through the MEL Director. The MEL Director and MEL Specialists will hold, at the minimum, weekly calls with the Consultant to discuss the study progress and needs. Creative’s HQ MEL Director will also participate in these meetings as necessary.

Responsibilities and Deliverables

The Trade Hub will be responsible for reviewing the deliverables and providing feedback in a timely manner and will always keep the necessary communication.

The consultant will be responsible for defining, designing, and validating the research methodologies, data collection tools, and pilot these tools. The Consultant will be responsible for data collection in the field through the final approved methodology and prepare a report that consolidates the results of the study.

The Consultant is expected to prepare the following deliverables:

• Work Plan
• Detailed Methodology, that includes detailed sampling framework, field logistics, staff roles and team composition and draft instruments, questionnaires, and guides.
• Validated data collection instruments, questionnaires, and guides.
• Clean data sets and geocoded datasets and transcripts
• Draft study report
• Finding’s presentation and review session with the Trade Hub MEL Team
• Final study report

Once the team receives the draft report, it will be circulated to relevant staff for technical review. Results will be presented to the Trade Hub Team. Comments will be collated and passed on to the consultant team leader. The final report should not exceed 25 pages of content, excluding annexes, and will include at a minimum the following elements:

• Table of Contents
• List of Acronyms and abbreviations
• Executive Summary (not to exceed 3 pages)
• Background/Brief program description, context, and rationale
• Purpose and expected use of the study results
• Objectives of the study
• Methodology and data collection techniques (including limitations of the study, if any)
• Study main findings with Key observations
• Lessons Learned and Recommendations
• Conclusions
• Annexes: List of documents and references used; other relevant information

The Consultant shall provide all deliverables in written form by email to the Trade Hub by the indicated due dates in the Contract. The draft and final reports should be written in English

Timeline

The support services are expected to start and should be finalized in April 2022, with the presentation of the main results in a report. We estimate the entire study will take a total of 25 calendar days.