UNEP Finance Initiative (UNEP FI) - Short term consultant to V20 Sustainable Insurance Facility – Bangladesh

Result of ServiceDevelopment of a project plan to offer an index insurance solution to protect the MSMEs borrowers of BRAC, Bangladesh that would be offered in conjunction with the MSME credit services offered by BRAC, Bangladesh. The project plan will be informed through qualitative inputs of the target MSMEs, assessing their risk financing needed with regards to resiliently meet their credit and other obligations in the face of a business disruption due to extreme weather events. The plan so developed will define the timelines and the resource requirements both financial and in terms of technical capacities and human resources. The consultant will also identify the capacity building requirements of BRAC and the local insurance industry towards the implementation of climate smart insurance solutions under consideration. The outcomes of the services will be to strengthen the UNEP FI’ V20 SIF’s implementation of its mandate to support the development of climate smart insurance projects for MSMEs and agribusinesses in a V20 market i.e. Nepal. Work LocationWorking remotely / Home-based Expected duration1 month Duties and ResponsibilitiesUnited Nations Environment Programme (UNEP) is the leading global environmental authority that sets the global environmental agenda, promotes the coherent implementation of the environmental dimension of sustainable development within the United Nations system and serves as an authoritative advocate for the global environment. The overall objective of the UNEP’s Industry and Economy Division is to encourage decision makers in government, local authorities and industry to develop and adopt policies, strategies and practices and technologies that promote sustainable patterns of consumption and production, make efficient use of natural resources, ensure safe management of chemicals and contribute to making trade and environment policies mutually supportive. It promotes the development, use and transfer of policies, technologies, economic instruments, managerial practices and other tools that assist in environmentally sound decision making and the building of corresponding activities. The United Nations Environment Programme Finance Initiative (UNEP FI) is the strategic partnership between the United Nations and over 500 banks, insurers and investors. For over 30 years UNEP FI has been shaping and driving the international sustainable finance agenda, setting global standards and growing a global network of leading financial institutions. Through its work-streams and regional activities, peer learning, methodology development, training and research, UNEP FI promotes sustainable finance and helps the financial industry align with and contribute to the Paris Agreement and Sustainable Development Goals. The V20 led Sustainable Insurance Facility (SIF) is a project pipeline development facility, convened under the Principles for Sustainable Insurance initiative (PSI) to assist the Vulnerable 20 (V20) membership in scoping the financial protection needs of Micro, Small and Medium enterprises (MSMEs) in the context of climate change and facilitate project concept note and proposal development under the leadership of the V20 Finance ministries. The SIF builds on the demand expressed by the V20 Risk Focus Group during the V20 Asia-Pacific Regional Meetings at the Asian Development Bank in Manila in 2017. The SIF is operationalized through the SIF Project Office hosted by the UN Environment Programme’s Principles for Sustainable Insurance (PSI) supported through the Munich Climate Insurance Initiative (MCII), and operate under the guidance of the V20. The work of the Office is included in the V20 Work Plan and currently funded by the German Federal Ministry for Economic Cooperation and Development (BMZ). Hosted by PSI, the SIF Secretariat team builds on PSI’s positioning as a global convener to fulfil the core mandate of the SIF, which is developing country demand-driven proposals and functioning as an impartial matchmaker to link implementation demand and supply. The PSI’s global convening power and industry networks supports the SIF in building regional and local insurance capacities. Moreover, the SIF secretariat leverages the PSI network to identify and realize collaborative potentials between the global and local industry and integrate PSI’s expertise on insurance industry perspectives on climate resilience and low carbon growth. Hosted in PSI, the SIF is also well-positioned to promote the V20’s sustainable insurance interests on a global level, including through the InsuResilience Global Partnership, the Insurance Development Forum, the Task Force on Climate Related Financial Disclosure and the Sustainable Development Goals. Under the direction and supervision of the PSI Programme Leader, the Consultant will support the development of a project plan for a climate risk coverage for credit for MSME customers of BRAC, Bangladesh in accordance with V20 SIF’s mandate to develop a pipeline of climate smart insurance solutions for MSMEs and agribusinesses in V20 Markets. In doing so, the Consultant will also liaise with the wider V20 SIF/PSI/UNEP FI team and BRAC Bangladesh’s insurance and MSMEs teams, particularly the PSI Programme Supervisor, V20 SIF global coordinator and the V20 SIF coordinator for Asia-Pacific. As risk managers, insurers and investors, the insurance industry is uniquely positioned to promote economic, social and environmental sustainability—in other words, sustainable development. Project context In Bangladesh, V20 SIF is in discussions with BRAC to develop a climate smart insurance solutions for MSMEs served by its other microfinance services. BRAC Microfinance has been working with the CMSMEs since 1973 with a vision of uplifting the economic condition of under-served community of Bangladesh. Initially, the program started with group lending and subsequently launched MSME lending program in 1996. With a vision to improve the quality of lives of poor people, BRAC has always been very aware and spontaneous to respond to the social calls during any natural disasters like flood, cyclone etc. However, considering the Microfinance program, BRAC noticed that the clients are being greatly affected by the natural calamities specially floods. As floods are very frequent and long term in nature, the livelihood of the clients slows down or even halts during this period. The affected peoples do not usually have much savings or financial support to continue the repayment of the loan during that period. Loan repayment becomes the least priority during flood time as they have to ensure safety, security, food and health for their family. Bangladesh has been among the fastest growing economies in the world, with annual per capita income growth of 4.0 percent over the past three decades. Over this period, the country has shifted from a predominantly agricultural economy to an industry- and service-led economy. Micro, Small and Medium Enterprises (MSMEs) in manufacturing has led this growth, and Bangladesh has emerged as a leading exporter of ready-made garments (RMG). With increased RMG exports, light manufacturing has created new and more productive jobs. Services sector growth accelerated with urbanization, expanding by an average of 6.0 percent over the past decade. Agricultural growth declined to an average of 3.3 percent over this period, although it continues to account for about 12 percent of GDP. Labor productivity has grown due to more efficient allocation of labor across sectors as well as productivity gains within sectors, although the labor force remains largely informal. MSMEs are crucial to Bangladesh’s financial and economic development. According to the World Bank, close to 99 percent of non-farm enterprises in the country are MSMEs. In 2013, they created over 20 million jobs for Bangladeshi workers. While bank lending to MSMEs has tripled between 2010 and 2016, the large majority of MSMEs have limited access to formal finance. The gap between the funds they have and what they require to run operations and grow is about USD 2.8 billion. According to Bangladesh Bureau of Statistics [BBS] (2015), 10.66 per cent firm are micro, 88.07 per cent are small, 0.73 per cent are medium and 0.54 per cent are large firms among the total of micro, small, medium and large firms in Bangladesh. Even in terms of employment, among the categories MSME contribute more where small firms employ 58.25 per cent followed by large (30.59%), medium (6.23%) and micro (4.93%) (BBS, 2015). Majority of these MSMEs are in the semi-urban and rural areas, with the average per capita income is under USD 17 per day. (2022, World Bank) The forthcoming Bangladesh National Adaption Plan recognizes that cottage/MSMEs are disproportionately impacted by climate variability and extreme events (e.g., prolonged floods and waterlogging, heat-stress, devastating cyclones, tidal surges, and salinity intrusion), and identifies the need to support MSMEs as important sources of livelihoods for vulnerable communities, especially women, youth, and ethnic groups. Strengthening community awareness and adaptive capacity, with improved engagement of citizens; locally endorsed plans for resilient investments; and transparent monitoring systems provide a strong foundation for leveraging additional financing. This could be supported by the private and public sectors (especially for “no regrets” climate-resilient investments) as well as international development and climate funds. There is no comprehensive strategy or regulatory framework to meet the costs of extreme weather events and disasters for MSMEs. Disaster response of MSMEs is financed through ex-post from own sources of funding. Extreme weather event like heavy rainfall, floods etc. are currently not insured when it comes to the MSMEs. The insurance market neither offers sufficient and sustainable catastrophe risk cover nor access to reinsurance. Less than 1 percent of MSMEs have insurance, which results in high expectations of government assistance with recovery. Microfinance is well developed, although it offers limited help to affected households. Further strengthening of the insurance sector, particularly microinsurance regulations and risk analyses, can improve access and affordability of reinsurance as well as provide support to new insurance schemes. Considering the unpredictable nature of flood and its impact, BRAC is planning for an intervention to compensate the financial distress of the people who are affected by frequent flood. Such intervention may be in the form of credit shield for the borrowers or generic financial compensation for all affected people. UNEP PSI – V20 SIF is committed to supporting BRAC in this intervention, in line with its own mandate. On the very high level, insurance program for the flood affected MSME entrepreneurs can be classified into two aspects: a) Credit Shield for Borrower: The idea of Credit Shield Program is to ensure the installment repayment during the flood period. During the time of the flood that interrupts the business of the MSMEs for a certain number of days or more, the borrower does not have to pay the installment, thus easing his/her financial distress. The loan installment will be paid by the insurance payout. b) Generic Financial Compensation: This idea refers to the generic lumpsum payment for all insurance holders during the flood period to support their emergency needs including paying their employees even in the absence of revenue during the period of extreme weather event. This will be on top of the loan repayment payout to be made by the flood insurance. Both/either of these coverages is proposed to be offered bundled with the credit offered to MSME customers of BRAC. As the first step towards this idea, UNEP PSI - V20 Sustainable Insurance Facility is seeking the expertise of a qualified consultant to develop a comprehensive project plan for this proposed intervention. Objectives and outputs expectations: • In-person engagements with the key personnel at BRAC, Bangladesh, its insurance partner(s) to review capacities and gaps in implementing the proposed solution. • Coordinate a stakeholders workshop to present findings from the steps above and a high level outline of the proposed Project plan (including timelines and resource requirements) for feedback • Draft the final project report and project plan and seek feedback from V20 SIF and BRAC, Bangladesh for finalisation. Specific tasks and responsibilities: Tasks: • Coordinate an on-site workshop (to be hosted by BRAC, Bangladesh) to present the key findings of the efforts listed above and also present the project plan for feedback from local stakeholders and V20 SIF. • Draft a final project report, inclusive of the final project plan (detailing timelines, resources needed. Capacity building required etc.) and get sign off from BRAC, Bangladesh and V20 SIF. The consultant shall be under the overall supervision of Head of UNEP FI and report directly to, Team lead UNEP PSI and will work closely with the global coordinator, V20 SIF and the Asia-Pacific coordinator, V20 SIF as well as personnel from BRAC, Bangladesh. Qualifications/special skillsEducation: A master’s degree in business administration; Management; Marketing; Economics; Livelihoods and Employment; Gender Studies; Social Development, or any related field is required. A bachelor’s degree could be taken in lieu of advanced degree provided the selected candidate has 12 years of relevant experience. Experience: At least 10 years of experience in working on inclusive insurance/climate smart insurance/MSME oriented insurance solutions and related projects. LanguagesLanguage: English is the working languages of the United Nations Secretariat. For this position, fluency in oral and written English is required. Knowledge of Bangla is an asset. Additional InformationSkills & knowledge: • 10 years of experience in working on inclusive insurance/climate smart insurance/MSME oriented insurance solutions. • Understanding of MSME credit and finance in the context of emerging markets is desirable. • Demonstrable proficiency in project plan development capacities especially for inclusive insurance interventions including those against climate risks. • Desirable experience in facilitating meso and macro level interventions inclusive finance and/or inclusive insurance space, feasibility studies, entrepreneurship, green economy, circular economy, environmental engineering, resource management and related disciplines. • A clear description of the Individual Consultant’s ability and track history in supporting the design and deliver a clear, structured, and comprehensive project plan. No FeeTHE UNITED NATIONS DOES NOT CHARGE A FEE AT ANY STAGE OF THE RECRUITMENT PROCESS (APPLICATION, INTERVIEW MEETING, PROCESSING, OR TRAINING). THE UNITED NATIONS DOES NOT CONCERN ITSELF WITH INFORMATION ON APPLICANTS’ BANK ACCOUNTS.