CONSULTANCY TO DEVELOP ANNUAL CREDIT PROFILES AND GRADUATION MODEL FOR 20 SELF-HELP GROUPS IN SOLIO SETTLEMENT SCHEME, LAIKIPIA COUNTY.

Consultancy to Develop Annual Credit Profiles and Graduation Model for 20 Self-Help Groups in Solio Settlement Scheme, Laikipia County

Location: Solio Settlement Scheme, Laikipia County, Kenya – Villages 3 (Bahati), 5 (Mathingira), 6 (Mukandamia), and 7 (Baraka)

Contract Type: Short-Term Consultancy

Duration: 1 Month from the date of contract award

Target Groups: 20 Self-Help Groups comprising approximately 400 members across the four project villages

Background and Rationale

Habitat for Humanity Kenya (HFHK) is a national non-profit organization committed to enabling vulnerable families to access decent and affordable shelter as a foundation for improved livelihoods. Recognizing that sustainable housing is closely linked to resilient income systems, HFHK integrates shelter, water access, climate resilience, financial inclusion, and community capacity strengthening.

Solio Settlement Scheme in Laikipia County is characterized by semi-arid climatic conditions, erratic rainfall, prolonged drought cycles, and increasing climate variability. Agriculture and livestock remain important sources of household income, but communities continue to face challenges including limited access to affordable finance, low levels of business capitalization, weak market linkages, and limited access to formal financial services.

Through funding support from the German Federal Ministry for Economic Cooperation and Development (BMZ), HFHK is implementing a 39-month climate resilience project in Solio Settlement Scheme. The project seeks to strengthen household resilience and income security through climate-smart agriculture, improved water access, financial inclusion, savings groups, cooperative development, and livelihood strengthening.

As part of the project's financial inclusion component, 20 Self-Help Groups (SHGs) have been established and are being supported by Social Mobilisation Workers. The groups maintain regular savings, loan, repayment, attendance, and financial records. Social Mobilisation Workers also submit monthly monitoring and group progress documentation, providing an ongoing source of information on group performance, financial behaviour, governance, membership, savings, internal lending, loan repayment, and other aspects of group development.

To support the SHGs to transition from savings-based groups towards stronger and more economically viable community financial institutions, the project will develop an annual credit profile for each of the 20 SHGs. The profiles will consolidate information from group records, monthly Social Mobiliser reports, monitoring forms, group documentation, and direct engagement with the SHGs.

The credit profiles will provide a structured assessment of each group's financial strength, governance, operational capacity, creditworthiness, risks, and readiness to engage with formal financial institutions. They will also identify gaps that need to be addressed before a group can appropriately access external financing.

In addition, the consultant will develop a graduation model that categorizes the SHGs according to their current level of institutional and financial development and defines the actions required for each group to progress to the next level.

To ensure that the profiles are relevant to actual financing opportunities, the consultant will engage banks, microfinance institutions (MFIs), SACCOs and other relevant financial service providers to understand their requirements for group lending and financing. The findings will be incorporated into the credit profiling and graduation framework.

The consultancy will therefore provide HFHK with a practical tool for linking SHGs to appropriate financial services while strengthening the groups' internal capacity, financial discipline, governance, and long-term sustainability.

Purpose and Objectives

Overall Purpose

The purpose of this consultancy is to develop comprehensive and evidence-based annual credit profiles for 20 SHGs and establish a practical graduation model that assesses their current capacity, credit readiness, institutional maturity, and financing needs.

Specific Objectives

The consultancy will seek to:

Consolidate and analyze available financial, governance, membership, savings and loan information for each of the 20 SHGs.

Develop an individual annual credit profile for each SHG based on verified group records and monitoring data.

Assess the financial performance, management capacity, governance, creditworthiness and operational maturity of each group.

Identify strengths, weaknesses, risks and capacity gaps affecting the groups' ability to access external finance.

Develop a clear SHG graduation model with defined stages, criteria and actions required to progress from one level to the next.

Identify appropriate financing opportunities for different categories of SHGs based on their capacity and credit readiness.

Engage banks, MFIs, SACCOs and other financial institutions to document their requirements for lending to SHGs.

Map the financing requirements of the SHGs against the requirements of potential financial service providers.

Develop practical recommendations for improving the groups' credit readiness and economic sustainability.

Provide HFHK with a consolidated database and evidence base that can be used for future monitoring, financial inclusion programming and engagement with financial institutions.

Scope of Work

The Consultant shall undertake the following activities:

Inception and Desk Review

The consultant shall:

Hold an inception meeting with HFHK's Livelihoods, Project and MEAL teams to agree on the assignment scope, methodology, tools and work plan.

Review the monthly reports and monitoring documentation submitted by Social Mobilization Workers.

Identify information gaps requiring verification through field visits and consultations with the SHGs.

Development of Credit Profiling Framework and Tools

The consultant shall develop a standardized credit profiling framework covering, at minimum:

A. Group Identity and Membership

Group profile and membership

Leadership and registration

B. Savings and Financial Performance

Savings performance

Lending and repayment performance

Overall financial position

C. Governance and Management

Governance and leadership

Record keeping and accountability

Internal controls and conflict management

D. Credit Readiness

Savings and repayment capacity

Financial and governance readiness

Financing needs and repayment capacity

E. Economic and Livelihood Potential

Livelihoods and enterprises

Market and investment potential

Climate-related economic risks

F. Risks and Capacity Gaps

Financial, governance, credit, market and climate risks

Documentation and capacity gaps

Field Verification and SHG Assessment

The consultant shall undertake field-based verification of the information collected from existing records.

This shall include:

Visiting the 20 SHGs across the 4 project villages.

Conducting structured discussions with group leaders and selected members.

Verifying key financial and operational information against group records.

Assessing the quality and consistency of group record keeping.

Documenting qualitative factors affecting group performance and credit readiness.

The consultant shall ensure that the assessment does not merely reproduce information contained in monthly reports but analyzes trends and interprets what the data means for each group's development and credit readiness.

Development of Individual Groups Annual Credit Profiles

The consultant shall develop a standardized annual credit profile for each of the 20 SHGs.

Each profile shall provide:

Group overview and background

Savings performance and trends

Internal lending performance

Loan repayment performance

Financial position

Governance and management assessment

Record-keeping assessment

Enterprise and livelihood potential

Climate and market risks

Creditworthiness assessment

Recommended financing amount/range, where sufficient evidence exists

Conditions or actions required before accessing external finance

Recommended capacity-building interventions

Proposed next steps

The individual profiles should be presented in a clear, standardized and decision-friendly format that can be used by HFHK when engaging potential financial service providers.

SHG Graduation Model

The consultant shall develop a practical SHG Graduation Model that categorizes groups according to their institutional, financial and credit readiness.

The model should establish clearly defined levels, for example:

Level 1 – Emerging/Foundational Group

Level 2 – Developing Group

Level 3 – Credit-Ready Group

Level 4 – Investment/Expansion-Ready Group

For each level, the model shall define:

Minimum eligibility criteria

Financial indicators

Governance requirements

Record-keeping requirements

Savings and loan performance requirements

Credit-readiness indicators

Key risks

Required capacity-building actions

Conditions for graduation to the next level

Engagement with Financial Institutions

The consultant shall identify and engage relevant financial institutions operating within or accessible to the project area.

These may include:

Commercial banks

Microfinance institutions

SACCOs

Community-based financial institutions

Other relevant financial service providers

The consulting firm shall document:

Group lending products available

Eligibility requirements

Required documentation

Minimum savings requirements

Collateral/security requirements

Loan limits

Interest rates and applicable fees

Repayment periods

Group guarantees or other security arrangements

Credit assessment criteria

Requirements for registration/formalization

Other conditions for accessing finance

The consultant shall then compare these requirements against the profiles of the 20 SHGs and identify which groups are potentially ready for which financing options.

Consolidated Analysis and Recommendations

The consultant shall produce a consolidated analysis of the 20 SHGs highlighting:

Overall financial performance

Savings and lending trends

Strongest and weakest performing groups

Groups that are credit-ready

Groups requiring further strengthening

Common institutional and financial gaps

Common risks

Financing opportunities

Priority capacity-building areas

Recommended actions for HFHK and Social Mobilisation Workers

The analysis should provide an overall outlook of the 20 SHGs, rather than presenting 20 profiles without synthesis.

Expected Deliverables

The consultant shall deliver the following:

Deliverable 1: Inception Report

Including:

Understanding of the assignment

Methodology

Assessment framework

Data sources

Work plan

Data collection and validation approach

Deliverable 2: SHG Credit Profiling Tool

A standardized assessment tool for assessing the financial, governance, operational and credit-readiness status of the SHGs.

Deliverable 3: 20 Individual Annual SHG Credit Profiles

One comprehensive credit profile for each SHG.

Deliverable 4: SHG Graduation Model

A practical graduation framework with defined levels, criteria, gaps and actions required for progression.

Deliverable 5: Financial Institution/MFI Requirements Assessment

A documented assessment of financing requirements from relevant banks, MFIs, SACCOs and other financial institutions.

Deliverable 6: Consolidated SHG Credit Readiness Report

A report synthesizing the findings from all 20 groups, including:

Comparative performance

Credit-readiness categorization

Key risks and gaps

Financing opportunities

Capacity-building priorities

Recommendations for HFHK

Recommendations for Social Mobilisation Workers

Recommendations for engagement with financial institutions

Deliverable 7: SHG Credit Profile Database

A structured Excel/database containing the key quantitative indicators for all 20 SHGs to support future monitoring and updating of the profiles.

Deliverable 8: Final Presentation

A presentation of findings and recommendations to HFHK, including the proposed graduation model and recommended pathway for linking SHGs to financial institutions.

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