Impact Evaluation for the Colombian Secured Transactions Program

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Expression of Interest are invited for Impact Evaluation for the Colombian Secured Transactions Program REQUEST FOR EXPRESSION OF INTEREST FOR SELECTION 1268675This Request for Expression of Interest is for a Firm Selection Please log in as a valid Firm User if you wish to express interest in this selection Selection InformationAssignment TitleImpact Evaluation for the Colombian Secured Transactions ProgramPublication Date 18 May 2020Expression of Interest Deadline 01 Jun 2020 at 11 59 59 PM Eastern Time Washington D C Language of Notice EnglishSelection NoticeAssignment Country CO ColombiaFunding SourcesThe World Bank Group intends to finance the assignment services under BB BANK BUDGET TF0A1564 LAC Financial InfrastructureIndividual FirmThe consultant will be a firm Assignment DescriptionSELECTION FOR CONSULTANTS BY THE WORLD BANK GROUPREQUEST FOR EXPRESSIONS OF INTERESTElectronic Submissions through World Bank Group eConsultant2https wbgeconsult2 worldbank org wbgec index htmlASSIGNMENT OVERVIEWAssignment Title 1268675 Impact Evaluation for the Colombian Secured Transactions ProgramAssignment Countries ColombiaASSIGNMENT DESCRIPTIONTo review and measure results and incorporate lessons learned in implementation in Colombia an impact evaluation of the secured transactions project in Colombia will be carried out which is the purpose of this Terms of Reference The Colombia secured transactions program is to undertake a rigorous impact evaluation to establish cause and effect on enterprise growth and development SUBMISSION REQUIREMENTSThe World Bank Group now invites eligible firms to indicate their interest in providing the services Interested firms must provide information indicating that they are qualified to perform the services brochures description of similar assignments experience in similar conditions availability of appropriate skills among staff etc for firms CV and cover letter for individuals Please note that the total size of all attachments should be less than 5MB Consultants may associate to enhance their qualifications Interested firms are hereby invited to submit expressions of interest Expressions of Interest should be submitted in English electronically through World Bank Group eConsultant2 https wbgeconsult2 worldbank org wbgec index html NOTESFollowing this invitation for Expression of Interest a shortlist of qualified firms will be formally invited to submit proposals Shortlisting and selection will be subject to the availability of funding Only those firms which have been shortlisted will receive notification No debrief will be provided to firms which have not been shortlisted Attachments Optional TOR FileQualification Criteria 1 Provide information showing that they are qualified in the field of the assignment 2 Provide information on the technical and managerial capabilities of the firm 3 Provide information on their core business and years in business 4 Provide information on the qualifications of key staff Impact Evaluation for the SECO World Bank Group Secured Transactions Program in ColombiaMay 2020 Description of IFC s Secured Transactions and Collateral Registries ProgramProgram Objective and ApproachThe term secured transactions refers to credit transactions where a creditor holds an interest in a debtor s movable property collateral to secure a loan or other obligation The interest in movable property commonly known as a security interest or charge is a broad generic interest that encompasses all of the traditional legal forms including pledge chattel mortgage sale with retained title and others Collateral facilitates credit by reducing the potential loss lenders face from non payment While land and buildings are widely accepted as collateral for loans the use of both tangible and intangible movable collateral such as vehicles inventory accounts receivable shares livestock crops equipment etc is restricted by absent or ill functioning secured transactions laws and registries Reform of the movable collateral framework aims to remedy these problems and to enable businesses to leverage the greatest part of their assets and obtain credit for growth The main program objective is to increase access to credit to firms especially SMEs by developing the appropriate legal and institutional framework to allow and facilitate the use of movable assets as collateral for loans To achieve this objective our advisory projects are built on three structural pillars Legal Framework Advice to governments law and policy makers and financial sector players on the necessary improvements to the legal and regulatory infrastructure for secured lending The technical experts of the team provide support to government institutions in the drafting of new secured transactions laws or revisions of existing ones and in the drafting of implementing decrees rules or regulations Registry Provision of technical and operational advice to the government and other stakeholders for the creation of new collateral registries or the improvement of the existing ones Capacity Building Training and awareness building among public stakeholders including registry officials and commercial judges on compliance with new laws and regulations Awareness building among creditors on the use of the new system in place and training of creditors on movable asset based lending techniques Economic Rationale for Secured Transactions and Potential Impact on IFC s Financial Sector StrategyIt is well accepted that access to credit is crucial for economic growth and is the engine for private sector development While access to credit varies from one jurisdiction to another constrained access to finance remains among the top three limitations on private sector growth in the developing world More than half of private firms in emerging markets have no access to credit The proportional number of firms that use loans to finance investments in the developing world is half the number of those firms operating OECD countries Insufficient Collateral is Among the Top Reasons for Difficulty in Accessing Finance Firm level surveys conducted in developing countries help explain why obtaining finance is difficult A common trend among the firms indicates that credit applications are mostly rejected due to insufficient collateral i e unacceptable or unsuitable collateral In many cases business owners did not even bother applying for loans because they were certain that they could not meet the collateral requirements often requested by banks An in depth analysis indicates that availability of collateral is frequently not the source of the problem it is the ability of translating valuable assets into productive use While in the developing world 78 of the capital stock of a business enterprise is typically movable assets such as machinery equipment or receivables and only 22 immovable property financial institutions are reluctant to accept movable property as collateral Banks heavily prefer land and real estate as collateral One of the Solutions to Increase Access to Credit Lies in Reforming Secured Transactions Laws and Registries Providing legal structures through which movable assets in emerging markets can be effectively used as collateral will significantly improve access to finance by those firms that need it the most Even in the most advanced jurisdictions where reliable credit information and a wide range of financial products are available only the largest and best connected businesses can obtain unsecured loans The rest have to offer collateral A sound legal and institutional infrastructure is critical to maximize the economic potential of movable assets so that they can be used as collateral Effective secured transactions laws are a crucial component of a healthy financial sector and business climate In their absence entrepreneurs are unable to leverage current assets into capital for investment Modern secured transactions systems allow the use of movable assets both tangible and intangible such as equipment inventory accounts receivable cash flows livestock crops and others as collateral in exchange for loans Economic analysis suggests that small and medium sized businesses in countries that have stronger secured transactions laws and registries have greater access to credit better ratings of financial system stability lower rates of non performing loans and a lower cost of credit The end result is higher productivity and more growth Modern secured transactions systems also contribute to private sector development by Increasing the level of credit In countries where security interests may be protected against competing third party interests and there is a predictable priority system for creditors in cases of loan default credit to the private sector as a percentage of GDP averages 60 compared with only 30 to 32 on average for countries without these creditor protections Decreasing the cost of credit In industrial countries borrowers with collateral get nine times the level of credit given their cash flow compared to borrowers without collateral They also benefit from longer repayment periods 11 times longer and significantly lower interest rates 50 lower Well designed secured transactions laws and collateral registries contribute to more robust financial systems by promoting credit diversification allowing Banks and Non Bank Financial Institutions NBFI to provide credit reducing the dependence on bank credit and relying less on real estate collat

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