Consultant, Economic Viability of Commercial Agent Business Model at Mercy Corps

Background

• The Feed the Future Nigeria Rural Resilience Activity (RRA) is a 5-year USAID funded program being implemented by a consortium led by Mercy Corps with support from IFDC and Save the Children across the states of Adamawa, Borno, Gombe and Yobe in North-East Nigeria.
• The Rural Resilience Activity will facilitate economic recovery and growth in vulnerable, conflict-affected areas by promoting systemic change in market systems. This will ensure long-term improvements to markets that will sustainably move over 500,000 individuals out of chronic poverty.

Purpose / Project Description

• RRA’s hypothesis is that by improving functioning in the “middle” of value chains, productivity and market access will increase, stimulating supply response to demand.
• RRA targets buyer-linked intermediary business models that offer incentives of additional farmer services and price differentiation for quality output. For example, the buyer- linked commercial agent business model is gaining traction with agents expanding roles to provide farmers with information and services. In the model, a buyer (e.g. exporter, processor, trader, or apex farmer organization and non-profit taking organisations) hand picks, trains, and sets expectations for commercial agents.
• Currently large number of rural women and youth have ceased the opportunities to become commercial agents offering commercial services and are being paid on commission basis.
• Under this model, commercial agents may sell inputs; conduct demonstrations with input suppliers to create demand; offer postharvest and processing services; purchase produce through cash, mobile money, or bank transfer; bulk and transport produce; facilitate credit; and provide ongoing extension and quality control advice.
• They bring needed services closer to often previously unserved farmers, many living off poor roads. Door to door services for inputs and mobile services save farmers time and money, improve product quality and quantity, and build trust.
• Other intermediary models are succeeding as well: grain aggregation, drying, storage, output purchase services, running a VSLA group, selling energy products etc.
• RRA popularized the commercial agent model through our work here for 1) employment creation along the value chains in ag and non-ag sectors and b) to help partners manage high transaction costs of doing business in North-East Nigeria. Through this model, we have created close to 5000 jobs.Commercial Agents operate on behalf of their principals and are paid on a commission basis.

Consultant Objectives

• RRA wants to commission two consulting services to analyze the economic viability of the commercial agent model given its value proposition for businesses and the employment promise.

Category 1:

• With the analysis output, we would pitch broadly to companies to scale up the commercial agent model. Our overarching question is:what is the median ROI for companies adopting the Commercial Agent model in North-East Nigeria?

Category 2:

• RRA has encouraged its partners such as civil society organizations, and non-profit taking partners to also adopt the agent model. They are now using agents to form savings groups etc.
• In employment terms, we have more than 2000 agents across the non-profit taking partners.
• We also want to influence that space by answering these questions: Could it be cost-effective for development organizations? What is the investment leveraged per dollar spent on an agent? In its current form, what is the cost per beneficiary and/or cost per ecosystem beneficiary? What cost adjustments could be made to make the model viable.
• Again, once we have the analysis output, we would use it as a pitch document.
• RRA seeks proposals from qualified consultants for each of the categories to answer the overarching questions.

Consultant’s Deliverables

• The Consultant will analyse the economic viability of women as direct sales agent model by addressing the following questions:
  • What is the median ROI for companies adopting commercial agent model?
  • Is more revenue generated by companies who adopt the commercial agent model?
  • Does the commercial agent model generate sufficient revenue to make the model commercially viable and profitable?
• The results of this study will be used to determine a viable business case to scale up the use of DSA in Northeast Nigeria and to determine appropriate interventions to do so.
• If a profitable business case emerges, RRA will move forward with key actors within the market to test effective business models for sustained product access/supply and use.
• RRA will work with key actors in the private sectors to raise awareness of the benefits of DSA and stimulate demand for DSA use among businesses.

Required Experience & Skills
Education:

• At least Master's in Business Management, Marketing, Business Analytics, Small Business and Entrepreneurship Management

Work Experience:

• Prior experience in business consulting
• Good understanding of business context of Northeast Nigeria
• Experience working with businesses
• Excellent analytical and report writing skills and pitch document development
• Demonstrated understanding of strengthening youth/women resilience through livelihoods.
• Commitment to and understanding of Feed the future Rural Resilience Activity aims, values and principles

Languages:

• Fluency in English is essential. Knowledge of the local language is an added advantage.

Technical Competencies:

• Excellent reporting and presentation skills.
• Excellent knowledge of and experience with humanitarian guidelines and principles.
• Willingness to travel and meeting deadlines.
• Ability to work in a multicultural and inter-sectoral environment.
• Ability to work collaboratively with the other activity team members.
• Ability to coordinate, direct and supervise others to achieve a common goal.

Mercy Corps, Responsibilities

• Mercy Corps will provide a list of state holders, project target information for NE and other relevant project documents.
• Mercy Corps will provide oversight support and initiatives as required

Timeframe / Schedule:

• Estimated Commencement Date: 13th June 2022
• Estimated End Date: 30th July 2022

Status Updates / Reporting:

• The preliminary report will be sent to the MC team within 5 days of completion of data collection; the consultant will present preliminary findings of the assessment/profiling with a list of potential business sectors to MC.
• The consultant will conduct his/her work using his/her own computer equipment.
• Other miscellaneous costs directly related to the task will be supported with any cost needing prior approval from MC.
• MC can provide survey enumerators as may be required.
• Payments will be made quarterly: First instalment of 30% paid upon submission of mapping report; the remaining 70% will be spread across quarterly achievement of milestones.

The Consultant will Report to:

• The Senior Intervention Officer for Transaction Advice and the Deputy Chief of Party.