International Resident banking Advisor Bank-E-Millie Afghan (BMA)

Background of the Assignment

The State-Owned Banking sector of Afghanistan currently comprises three banking institutions, all of which are dutifully established under Law and regulated by Da Afghanistan Bank-Central Bank of Afghanistan: Bank-E-Millie Afghan (BMA) has been historically state-owned and was established originally in 1933.

With US$565 million in total assets Bank-E-Millie Afghan (BMA) is the largest of the three State Owned Banks (SBs), accounting for about 46% of the SB sector. However, BMA loan book is comparatably small focused mainly on corporate clients. A substantial part of BMA assets are held in liquid instruments or investments, with interest income of the latter driving overall financial performance.

The Government of the Islamic Republic of Afghanistan (GoIRA) has embarked on implementing an ambitious strategy to reform and modernize the SBs of Afghanistan, with the aim to establish the SBs as financially sustainable institutions that will provide a meaningful economic contribution towards GoIRA’s aim of increasing access to finance for all Afghan economic and social sectors, thereby contributing to GoIRA’s objective of fostering economic growth and job creation in addition to its prime objective of profitability. Implementation of GoIRA’s reform and modernization strategy will be supported by the World Bank funded ‘Modernizing Afghan State Owned Banks’ project.

The strategy seeks to modernize and reform SBs in three fundamental areas: (a) Corporate Governance, (b) institutional development and businesses strategy, and (c) information technology systems. Essential elements of the SB strategy will be the definition and implementation of a sustainable business strategy, including the redefinition of the business models of SBs, and the possible adjustment of the size of institutions in accordance to their respective mandate and business strategy.

Description:

To support its ambitious reform and modernization efforts for the SB sector, GoIRA is seeking to contract consultant services for qualified long term resident advisor for BMA. This ToR has been prepared for a resident advisor who will support the implementation of BMA modernization.

The ToR focus on a consultant expected to provide support to BMA management and Board of Supervisors, in formulating and implementing key activities related to the modernization of BMA in line with strategic vision outlined by GoIRA.

This will include – but will not be limited – to the detailed definition of the business objectives and plan, identification of implementation steps and resources requirements, formulation of relevant policies and procedures, definition of resources needs and establishment of performance targets.

Scope of Services:

The Resident Advisor will provide support and input to the reform and modernization process of BMA by advising BMA Management, Supervisory Board and ownership representatives on all relevant strategic, policy and technical aspects of the process. The Scope of Services is expected to range from supporting high level definitions of strategy to focused hands-on support in the implementation process of the modernization program and the reorientation of the institution; including the definition, design and implementation of policies, procedures, processes and manuals.

Broadly, the Scope of Services is divided into activities in four areas, as outline in more detail below:

1. Strategic and policy advisory

The Resident Advisor will provide support and technical advice in operationalizing and implementing the reform and modernization strategy defined by GoIRA. Specifically, the Resident Advisor will support BMA Management and Supervisory Board in (among others):

• Revising and improving five year strategic plan for BMA for expansion of the business and strengthening the control functions.
• Assessing, reviewing and recommending the development and implementation plan for BMA of a detailed 5 year business plan in line with GOIRA SB strategy.
• Advising on the implementation arrangements and action plan of the business strategy in order to guarantee the financial viability of the institution (see no.3 for details).
• Reviewing implementation results and identifying adjustments needs of the business plan on a regular basis, including documenting opportunities for and challenges to BMA’s financial and operational strengthening and proposing supportive or remedial measures.
• Improving existing policies and manuals of the bank as per the existing Da Afghanistan Bank regulations.
• Advising on the definition and implementation of a product and services strategy aimed at attending defined market segments and designing relevant policies, procedures and processes.
• Introduce new innovative operations and credit products & services as per current market needs.
• Undertaking the annual assessment of business strategy and analyze performance and reviewing the product portfolio mix, market position and institutional capacity and accordingly and recommend adjustments in order to maximize financial sustainability and development impact of the institution.
• Work with management board in defining competitive advantage for the bank
• Assessing, reviewing and recommending the development and implementation of the Bank’s internal control and operational policies and manuals.
• Establishing arrangements for regular structured assessments for the operational and resources strategy in line with the business strategy of the institution.

• Establishing cost control measures for the bank.
• Periodic budgeting and financial planning and definition of long-term required resources.
• Improving risk based auditing system and its processes manual
• Defining and implementing of a ‘Delivery Channel’ strategy, taking into account and evaluating the efficiency of the traditional branch network and emerging alternative delivery options.
• Establishing outreach and communication with all relevant stakeholders.
• Documenting progress and challenges in the transformation and modernization process, and implementing appropriate M&E approaches to evaluate the institution’s financial, operational and outreach performance.
• Identifying non-strategic assets and determining an implementation plan for their divestment, including the identification of qualified equity investors.
• Improving and implementing Capital Injection Plan for BMA.
• Any other tasks assigned in the related areas

2. Capacity Building

The Resident Advisor will support BMA Management and Supervisory Board in fostering the institution’s capacity to successfully integrate business and operations and transition with other SBs towards a universal banking approach, which emphasizes attending to small and medium business in its lending activities. Specifically, the Resident Advisor will support Management and the Supervisory Board in:

• Conducting regular reviews and amend relevant business and credit risks policies, procedures and operational manuals and instructions.
• Organizational reviews to determine optimal organizational structure based on Da Afghanistan Bank regulations and assign relevant capacity, for efficient and effective credit risk management.
• Review and modernize HR management policies, procedures and instruments
• Providing regular trainings on the subjects matters as maybe requested by the HR department

3. Coordination and oversight of specialized consulting services

The institutional reform, strengthening and refocusing process for BMA is a multipronged endeavor, encompassing engagements and support in a number of different strategic aspects, including: (a) the strengthening and reform of Governance structures, (b) focused communications efforts to support the rebranding and market positioning of the SB in coordination with the communications advisor who will be hired under this project, and (c) significant investments in the modernization of the technological infrastructure and processes.

The resident advisor will also work in close coordination with the advisory firm that will be recruited by GoIRA for the implementation of the sectoral and structural aspects of the strategy as concerning BMA. Once the advisory firm is on board, the resident advisor will supervise, liaise with and complement the advisory firm’s services, through recommendations to BMA Board of Supervisors and Management. The Resident Advisor is expected to be placed at BMA and will report administratively to the board of management. The resident advisor will be responsible for undertaking preliminary reviews, preparing key documentation, and taking key first initial actions in the implementation of the GoIRA strategy.

Furthermore, the Resident Advisor is expected to coordinate and consult closely and as needed, its work efforts with the Project Banking Expert Advisor assigned to the project implementation team in MoF.

Deliverables:

• Improve Strategic Plan and produce Strategic Plan implementation plans
• Policies, procedures and manuals for the new product mix and internal operations     
• Assessment of Quarterly budget and financial plans including analysis of actual historical performance against planned and defining projected targets.
• Branch network assessment and outreach strategy and the action plan for the branch network operations.
• Monthly progress reports submitted to MoF and IDA on the resident advisor’s activities, and issues of relevance to BMA operations and adoption of the reform strategy.

Duration and Type of contract:

The contract shall be Time Based

The entire scope of services need to be as executed and the listed deliverables be delivered in Kabul, Afghanistan for a duration of 12 months from the day of commencement of the contract.

Contract benefits will include relocation mobilization benefits, secured housing and transportation

Selection Criteria:

The Consultant must have:

• Minimum fifteen years of relevant professional experience on a senior level in the domain of Banking, Finance, Accounting, Audit, Strategic planning and budgeting, costing, asset management and Risk management.
• Significant experience in small and medium enterprise financing. Experience in financing of semi-urban and rural businesses is highly desirable.
• successfully participated in the implementation of at least two similar consultancy projects, in terms of scope (multi-year, policy level intervention).
• Proven experience in working in similar capacity, bank management or financial sector supervision or similar in (post) conflict and fragile states desirable.
• At least Masters level qualification in related field.
• Fluency in spoken and written English.

Submission Guideline:

Interested International candidates are requested to submit a cover letter, CV and related documents to the email address mentioned specifying the position and vacancy number in the subject line

 Submission Email:

  shahenshah.sherzai@gmail.com