LRPS-2023-9182978 to establish Long Term Arrangement (LTA) for Financial Services for Delivering Cash-Based Interventions in Bangladesh for 2 + 2 years.

TERMS OF REFERENCE FOR INSTITUTIONAL CONTRACT

 

Title of the assignment

Long term Agreement for Financial Services for Delivering Cash-Based Interventions in Bangladesh

Purpose

UNICEF Bangladesh is looking to establish Long Term Arrangements (LTA) with Financial Service Providers (FSPs) to deliver financial payment services throughout Bangladesh to eligible beneficiaries. The FSP should have a duly licensed, established, credible, and secure system for money payments and related activities for effective use for Money Transfer Services in Bangladesh

Location

Dhaka, Bangladesh, with nationwide implementation.

Estimated Duration

The selected service provider(s) will be awarded a Long Term Agreement (LTA) and which will be used to establish contract(s) against respective cash transfer project(s) and upon needs. The LTA will be established for an initial period of 2 years, with the possibility of extensions of another 2 years, subject to performance and UNICEF requirements.

Reporting to the Technical Supervisor of this assignment

Social Policy Specialist, Social Policy, Analysis, Evaluation and Research (SPEAR) Section

 

1. Background

 

UNICEF undertakes various programs throughout Bangladesh that require the transfer of cash to organisations and individuals (beneficiaries).  Currently, different modes of payment are being utilised to beneficiaries’ households across the country; however, UNICEF intends to standardize payments through a Cash Transfer mechanism provided by a third party, using secure technology for registration and verification purposes (preferably biometric technology).  UNICEF seeks to establish a payment system that is cost-effective, secure, reliable, and transparent to facilitate efficient service delivery for children. The Covid-19 pandemic has also exacerbated the need for reduced contact while delivering humanitarian support without eliminating constant communication between UNICEF and targeted beneficiaries. In this context, UNICEF is currently looking to contract Financial Service Providers (FSPs) to deliver payment to eligible beneficiaries throughout Bangladesh. The FSP should have the adequate financial capacity, cash liquidity, comprehensive geographical coverage, and willingness to disburse cash on the reimbursement on confirmation option, keeping with UNICEF’s core values and programming principles into consideration.

 

2. Specific objectives

The specific objectives hereunder

• Safely deliver financial transfer services to eligible UNICEF beneficiaries as per the parameters and list provided by UNICEF.
• Properly account for the transfers delivered and reconcile delivered benefit amounts at the end of each payment phase

 

3. Scope of Assignment

The Scope of Work provides the different elements that UNICEF expects the Financial Service Provider(s) (FSPs) to deliver when undertaking financial transfer services.  FSPs should ensure that all areas are considered when responding to the RFP and that evidence and examples of the effectiveness of their services across Bangladesh are provided.

 

3.1 Transfer Mechanisms

UNICEF seeks to implement appropriate financial payment services which include mobile money payments, bank transfers, other innovative electronic financial payment systems and cash in hand in order of preference. The FSP is expected to outline the effectiveness of their services in respective categories across Bangladesh.

 

3.2 Responsibilities

The following responsibilities need to be fulfilled by both UNICEF and FSP:

 

UNICEF’s  Responsibilities

 

• Share the letter of authorization prior to the payment services, providing the total number of beneficiaries to be paid

• Share the beneficiary list with FSP in a secure, password-protected format or upload payment lists on FSP provided platform.

 

FSP’s Responsibilities

 

• Provide a payment management platform with differential access rights for UNICEF to upload payment lists and monitor transfers, withdrawals, and reconciliation.
• Ensure payments to all registered beneficiaries provided by UNICEF in the master beneficiary list. The selected agents shall only make payment to a beneficiary after verifying the National Identification Number/authentic registration document. UNICEF’s partners will facilitate this process at the field level. In case of the unavailability of official documentation, the beneficiary will be verified by the UNICEF partner and programs team. The process will be either to issue unique ID number (Generated by UNICEF or partner) or sign an undertaking form with the beneficiary; all this information will be provided to the FSP before the planned cash distribution as well will be mentioned in the beneficiary list.
• Make all payments to the intended recipients at a requested timeframe with due diligence and efficiency and provide UNICEF with at least 72 hours (three working days) notification of any modification of cash facilitation.
• Re-arrange for the payment as soon as possible in the event of failure to make a completed payment to a recipient within the suggested time. In such a case, the FSP will not charge the service charge on the re-arranged Payment. UNICEF cancel the Payment Request with no penalty and no commission on the undelivered sum.
• Set up, maintain and manage a safe, effective and efficient mechanism for payment of transfers complete with appropriate authentication methods. Co-operate with UNICEF and partner’s staff in monitoring undertaken by both. Both parties will work on making the money transfer mechanisms better for the beneficiaries.
• Verify the existence/active status of the beneficiary accounts for electronic transfers and correct matching with registered names as shared in the payment list. Any unmatching entries shall be communicated to UNICEF within two days of sharing the payment list.
• Collect additional beneficiary information as required for Know Your Customer (KYC) compliance, that will be done by the FSP agents. Nevertheless, the source for payment instructions and information will be the UNICEF-generated payment list or, as advised by UNICEF.
• Provide/ facilitate the opening of accounts for potential beneficiaries if they are not already in possession of one and support with registration where needed.
• Provide technical assistance to the beneficiaries who may not be able to use the services.
• Provide basic training to agents and beneficiaries on the use of respective electronic payment platforms.
• Maintain proper records and documentation of funds received and distributed under the contract. The FSP shall provide all required information and not impede the verification process to allow UNICEF or delegated third party to complete the verification.

 

Dedicated Account Management and Client Service Hotline

The FSP is expected to fulfil the below-recommended customer service/ account management requirements:

• The FSP should be able to provide a dedicated service to UNICEF, including the provision of an office in the minimum location of Dhaka, Bangladesh, and a focal point/person dedicated to managing this project, answering questions and solving any operational problems within a reasonable timeframe.
• The FSP should be available to provide this support during regular business hours from Sunday to Thursday. The channels of communication and reporting mechanisms should be established to ensure efficient resolution of issues.
• As appropriate for the service offering, the FSP will facilitate the opening of a corporate wallet account in the name of UNICEF. Due diligence and KYC requirements for said account opening shall be in accordance with legal status, privileges and immunities granted to UNICEF.
• FSP should provide a free telephone hotline that individual beneficiaries can call, especially in the case of loss or theft of means of withdrawal or other technical problems.
• A free telephone hotline and online access must be included for the staff of UNICEF, other organisations authorized by UNICEF, and project beneficiaries, who will use this service to resolve urgent problems related to the operation of the service. To the extent possible, this hotline should be accessible 24/7 in English and Bangla.

 

Data Protection Agreement

It is a preeminent requirement of UNICEF to protect the confidentiality and security of the data about its beneficiaries and the project. Therefore, services and proposed transfer mechanisms must be aligned with the UNICEF policy on the protection of the personal data of individuals under its mandate and must reflect the rules and processes that allow the encryption of beneficiaries’ data. In case it exists and if the national Know-Your-Customer policy of Bangladesh requires disclosure of personal data and identification of beneficiaries, FSPs are asked to specify whether an exception to these rules can be obtained from the authorities.

 

The FSP must follow UNICEF POLICY ON PERSONAL DATA PROTECTION (See attached Annex One) and have in place rollout plans, including:

• The encryption of any database providing details on the beneficiaries
• The policy and procedures for handling and management of personal data
• The retention period for maintaining beneficiary records per KYC requirements

 

The selected FSP(s) will be asked to sign a non-disclosure agreement (NDA) with terms and conditions governing their access to, usage of, and safeguarding of the data they will handle on UNICEF’s behalf.

 

Mechanisms of Internal control and risk management

The FSP(s) will ensure that appropriate internal control and fraud prevention mechanisms are in place. The internal control mechanisms provided shall be clearly specified in the proposal. The submission should detail the company’s Business Continuity Plan, measures for monitoring and regular testing of security systems and procedures, and the mechanism of monitoring and detection, and response in real-time to technical problems and potential fraud.

The FSP must maintain an up-to-date information security policy that is in line with the UNICEF policy on the protection of personal data.

The FSP must ensure that control measures of physical or virtual system access, restricting access to the beneficiaries' data and monitoring the access of users, are in place.

The FSP shall state and justify the mechanisms that will be implemented to ensure the security of beneficiaries and staff of UNICEF or its partners at the point of withdrawal/disbursement of the money.

All transfers of data must be encrypted, contain integrity checks, and must be sent over secure lines, using protocols such as Secure File Transfer Protocol (SFTP). The provider must provide detailed information about the security measures they use.

UNICEF will put in place a third-party monitoring system that will ensure field verification of beneficiary’s payments on a simple random selection basis each month.

The FSP must reimburse UNICEF for any balance on any UNICEF-owned accounts that are not withdrawn by the beneficiaries in accordance with the criteria which will be specified by UNICEF in the Contract.

 

Identification of Beneficiaries

UNICEF shall provide comprehensive data of all beneficiaries to aid in the initial verification of registration and confirmation of registration of the beneficiary on financial transfer service, which can be leveraged to enter information into the FSP’s database. This will be termed Master List and will be provided in the form of an encrypted file. Subsequently, whenever a new beneficiary is identified, UNICEF will notify the FSP through a secure encrypted method of the details of such an individual to be registered on the financial transfer service and added to the master list. The details will include Name, contact details, Date of Birth, State, county, address, passport photo; and, where applicable, ID number. Specific projects may discuss particular details during the launch of such a project.

The FSP will work hand in hand with the UNICEF team in the field locations to register the identified beneficiaries who need to be registered on financial transfer services. The FSP is responsible for cross-checking the data of beneficiaries against Master List provided by UNICEF. FSP may work with other providers (i.e Mobile Network Operators (MNOs)) to register new users and subsequently enroll such users in respective financial service, especially in locations where UNICEF may desire to launch payments.

The FSP must specify in its proposal what the accepted and valid pieces of identification for registration of the beneficiaries are, per national regulation. Where necessary, the FSP shall work with UNICEF to identify other acceptable legal and/or functional identification pieces such as refugee/asylum seeker identification, UNHCR-issued ID, WFP SCOPE ID, IOM BRAVE ID, or other relevant functional IDs.

The FSP must specify in its proposal the procedure and mechanisms that will be implemented to ensure that the transfers are provided to the targeted beneficiaries according to the lists provided by UNICEF. The FSP must specify all means to be implemented to limit the risk of fraud and misidentification.

The FSP should provide as part of its bid relevant documentation concerning its data handling, including:

• Data storage details
• Information security procedure
• Hardware and software details
• Data retention current practice
• Biometric solution (if in place)

 

Usability of the Transfer Mechanism

While responding to this RFP, FSPs are encouraged to demonstrate what measures are being taken to ensure that the targeted beneficiary can access and effectively use the transfer service with no added burden of time and cost. In particular, the FSPs are invited to provide details on how their services can be securely accessed and used by people with specific needs or vulnerabilities - including people with disabilities, pregnant and lactating women, the elderly, and the illiterate.

The selected FSP(s) will be required to provide training to UNICEF staff, partners, and beneficiaries to understand their cash transfer system and therefore ensure it is user-friendly to ease utilization by beneficiaries.

The FSPs must provide a detailed guide for the proper use of the service by the beneficiaries in English and Bangla, with the possibility to extend the service to other languages spoken by the target population.

The guide should explain clearly, but not limited to, the following:

• How and where to make withdrawals
• How to use the means of payment
• How to use and protect individual identification codes / PIN code
• The required information and identification documents to make a withdrawal
• How to check the balance on their accounts
• How to report lost or stolen sim cards or any other problem linked to the use of the service

 

Means of Payment, Infrastructure, and Network

FSPs will specify in their technical submission the means of individual payment/withdrawal, including the infrastructure and network used for hosting the electronic transfer service.

The proposal must detail the precise geographical location of payment/withdrawal points/Agents, and their number (how many) in each geographical area. The FSPs are to ensure, if they do not exist, the implementation of points of payment/withdrawal in the immediate vicinity and directly accessible by targeted beneficiaries.

FSPs will specify the mechanism for cancellations of payments in case of loss or theft. Upon receipt of a report on the toll-free line or instruction from the UNICEF focal point of such a loss/theft, the means of payment must be immediately cancelled out by the FSPs, who will report in writing the cancellation of lost/stolen cards and credit the corresponding unused amounts to the UNICEF account.

Upon receipt of a report on the toll-free line or instruction from the UNICEF focal point of a loss/theft of a card, FSPs will specify steps for confirmation of the beneficiary account and blocking the card to prevent further harmful and malicious action on the said beneficiary’s account.

FSPs will be responsible for ensuring that cancellation procedures are implemented on time and accept financial responsibility to reimburse UNICEF for any financial loss resulting from the delay in processing by the FSP(s).

When the infrastructure and/or the network used for the transfer service does not belong to or is not supported by the FSP(s), the proposal should specify the mechanisms by which the FSP(s) will ensure their quality and effectiveness to ensure the transfer service.

 

Reporting and Reconciliation

The FSP(s) will maintain the accounts under contract based on generally accepted accounting principles. Accounts should be maintained in computerised standard accounting software.

The service provider will maintain proper records and documentation of funds received and disbursed under this contract. The service provider should produce all records to UNICEF as and when requested.

Regular reports shall be provided by the FSP(s) for monitoring, recording, and reporting of transactions. For each payment instruction, the FSP(s) will provide UNICEF, a confirmation report certifying the successful payments to the beneficiaries,  the amounts received by each, and the dates of receipt.

 

The FSP(s) will provide UNICEF every month:

• A report on the movements of cash
• A report detailing for each beneficiary the amounts being received by the beneficiary
• A report listing the beneficiary’s accounts activated and deactivated
• A report of inactive accounts of the beneficiary including the account balance
• A proof of life for every account with 3 months of account inactivity.
• A report listing all the attempts or cases of fraud
• A report listing all incidents and delays in the implementation of the service

 

The FSP(s) shall have in place an electronic reporting system accessible online in real-time.  UNICEF should be given access rights. This possibility will be considered an asset for submissions including this service.

The FSP(s) will ensure that all financial records are available for Audit/review by UNICEF as and when required by UNICEF for a minimum period of 5 years.

It should be noted that to avoid a conflict of interest in an instance of fraud, the FSP(s) and UNICEF may solicit independent investigation processes.

 

Insurance and Security

UNICEF cannot be held responsible for the fraud, misappropriation, or loss of funds occurring between the UNICEF dedicated account at the FSP(s) and the targeted beneficiaries.

The FSP(s) retains the risks associated with the absence of proper and valid insurance to cover the Risks in respect of transactions of cash and shall not hold UNICEF liable for any loss in that respect.

It is the responsibility of the FSP(s) to seek damages from their insurance provider where applicable, in the event of loss of the cash during transit or before the cash is handed over to the beneficiary by the beneficiaries.

The FSP(s) shall procure adequate insurance to cover the Insurable Risks in respect of the cash and shall not hold UNICEF liable for any loss during the period described above.

The FSP(s) retains the risks associated with physical cash loss, value loss to cash (e.g. due to inflation), losses associated with damage to the cash between the periods of initiation of the services until the delivery of the cash to the intended recipient as instructed by UNICEF and shall take appropriate measures to ensure the said risks are mitigated or avoided.

 

Assessment of Performance

UNICEF will periodically review the performance of FSP(s) to ensure among other things, the following, and independent monitoring of the FSP(s) by a third party will also be periodically undertaken:

• Efficiency and effectiveness of the disbursement to beneficiaries
• Time of the transfer and disbursement
• Security of payments and beneficiaries
• Technical assistance and problem-solving
• Accuracy of the accounts and reports of disbursement
• Usability and ease of use of the mechanism, based on the comments of beneficiaries
• Effective access to financial services by the beneficiaries, considering their specific vulnerability
• The maximum time between the transfer by UNICEF to the FSP(s) and the availability of funds to the beneficiaries
• The average response time for customer service inquiries should be on the same day
• The time limit for cancellation of a means of payment/withdrawal after the request by UNICEF or the beneficiary, in case of loss, theft, or other

 

MONITORING:

Through random interviews with beneficiaries, UNICEF will appoint a third party to monitor and confirm receipt of transfers for at least 10 percent of all payments done. The third-party monitor will develop an independent report of the process, including, timeliness, beneficiary appreciation of the process, services, and customer relations.

 

DELIVERABLES:

The following deliverables will be required:

• Inception report: For each project, an inception report with a detailed work plan with all required information on resource allocation (including the specific number of agents per target location as per specific project), and payment process, are to be submitted within 14 days following the signing of the respective project contract.

 

• Reconciliation Report: Report including the individual (electronic) file and aggregated report detailing the use of the funds that have been allocated to make payments to the beneficiaries. The reconciliation report must be submitted no later than 10 working days after completing the disbursement phase.

 

The Reconciliation Report should contain general and specific information on the management of the funds:

• Service provider’s general information
• The number of beneficiaries to be paid
• The number of beneficiaries paid
• The number of beneficiaries unpaid
• The total amount deposited
• The total amount transferred to the beneficiaries’ accounts

 

Outstanding balance

• Details of the payment per beneficiary, including the information on the beneficiaries whose money was transferred
• Details of beneficiaries whose transfer did not occur with a description of the reason for transfer failure.
• Other relevant information that UNICEF deems necessary.

 

Payment Cycle Report:

At the end of the payment cycle, a report should be provided describing activities made, challenges confronted, results, and recommendations.

 

Payments will be made as follows:

1. The payment to FSP will be on a reimbursement basis of the amount paid to beneficiaries plus a commission charge.
2. For clarity, The amount reimbursable will be the actual transfer to the beneficiary, which will include the earmarked amount plus a one-time withdrawal fee eligible for that amount as per the schedule, i.e MMO schedule
3. If the FSP is not in a position to pre-finance the cash disbursements, UNICEF will require a third-party bank guarantee for the amount to be advanced from a financial entity to be agreed by UNICEF. Any administrative costs for the issuance of a guarantee shall be the responsibility of the FSP.
4. Payments will generally be made at the end of each monthly payment cycle after completing the reconciliation and independent payment verification process.
5. The payment will be transferred to the service provider upon receipt of the invoice and the approval by UNICEF of the reconciliation documents submitted by the service provider at the end of the payment cycle.
6. FSPs shall stipulate any special discounts given to UNICEF under this request for proposal.
7. The above notwithstanding, for each future project, UNICEF may request and FSPs may avail for the specific projects other special rates provided these are better than those stipulated in this LTA

 

LOCATION

Nationwide, Bangladesh

 

QUALIFICATIONS AND EXPERIENCE REQUIRED:

The following is required in terms of the Organisation and the proposed team experience:

• Be an institutional entity fully and duly registered with local authorities and licensed with the Central Bank and the National Communications Commission to perform financial and payment transactions as detailed in this TOR
• Must have an operational presence in Bangladesh with an operational office and address
• Must have a secure system of clients’ registration during the issuance of cards and during client’s registration for financial services
• Have prior experience in similar assignments
• Work experience with international and local humanitarian organisations will be taken into consideration
• Have the infrastructure and human resources and the level of technology adequate for the execution of the activities in the Payment process and attend to the beneficiaries in a professional and cordial manner
• Demonstrate the ability to access all the geographical areas the FSP(s) indicated the presence and provide qualified agents to carry out the payments
• Demonstrate the feasibility of the proposed methodology to perform the assignment with an acceptable level of effectiveness (through a detailed proposal)
• Demonstrate that the level of security presented is appropriate according to the context

 

APPLICATION AND EVALUATION PROCESS:

Organizations interested to apply or submit a proposal should read the following documents and acknowledge to comply with them in terms of signing off the LTA and subsequent service contracts:

1. Annex 1: General terms and conditions for Institutional Contract
2. Annex 2: UNICEF Non-Discloser Agreement
3. Annex 3: Standard Terms of UNICFE of Contractual Provisions
4. Annex 4: UN Suppliers Code of Conduct
5. Operational presence in Bangladesh, including evidence of License with Bangladesh Bank to undertake services detailed in the TOR
6. Accepting ‘Collection of, Access to and Processing of Data - Confidentiality Obligations’ [NDA Template, Annex-2]

 

Each proposal will be assessed first on its technical merits (including legal aspects) and subsequently on its price. In making the final decision, UNICEF considers both technical and financial aspects. The Evaluation Team first reviews the technical aspects of the offer, followed by a review of the financial offers of the technically compliant vendors. The proposal obtaining the highest overall score after adding the scores for the technical and financial proposals together that offers the best value for money will be recommended for the award of the contract.

 

PLEASE ENSURE TO SUBMIT THE TECHNICAL AND FINANCIAL PROPOSALS SEPARATELY.

 

For technical and financial proposal two separate file/document to be submitted. No financial information should be provided in the technical proposal as it will make the entire submission disqualified. The financial proposal should be submitted as a password protected document, UNICEF will request for the password only from the technically qualified organizations.

 

The Technical Proposal should include but not be limited to the following:

1. Document(s) for registration of the company with the relevant national authorities
2. Document(s) for registration of the company with the national tax services
3. Certified copy of the license to provide money transfer services, issued by the relevant government authority
4. Corporate Profile highlighting the bidder’s qualifications and relevant experience in implementing similar assignments in the same context and complexity
5. Last two years’ financial statements and audit reports
6. Executive Summary: A brief summary of the FSP's qualifications, experience, and approach to implementing the project.
   1. Description of how the Bidder will address each component of the requirements described in this TOR highlighting key steps and approach, including outlining the methodology and modality for the payment, quality assurance framework, applicable tools and the associated timeline for each step of the service, including registration of the beneficiaries.
   2. List all current contracts with other Govt Agencies, International Organizations, INGOs, and UN Agencies including other organizations.
   3. Expertise of the service provider detailing general and specific experience with similar assignments in size, scope, and complexities, and the emergency context in the past two years. Please provide a [minimum 3] list of project experience and include the following information in your proposal:

• Name of Client
• Title of the Project
• Year and duration of the Project.
• Brief description and scope of the Project
• Proposed solution, timeliness, and results
• Contact person details

1. The bidder will clearly indicate the states, counties and locations across the country where they currently have a presence. This should also include the number of clientele in the respective location.

1. Methodology: A detailed description of the FSP's approach to implementing the project, including the transfer mechanism, registration and verification process, quality assurance framework, and risk management plan
   1. Including the methodology for the disaster recovery process and cycle time, contingency during a disaster, e.g. system failure. Please describe your disaster recovery plan for short-term and long-term disaster recovery; How and when will your customers be notified of any service affected by a disaster? What are your plans to ensure continuity of service in the event of disaster or system failure that affects a partner or third-party provider included in your proposal?

1. Data Protection and Privacy: A description of the FSP's policies and procedures for collecting, processing, and protecting personal data of beneficiaries in accordance with the relevant data protection laws and regulations.
   1. Policies and procedures for personal data (including biometric traits) collection, processing, and retention, including details mentioned in the relevant paragraph of this ToR.

1. Capacity, Communication & Coordination: A plan for communicating and coordinating with UNICEF and its partners throughout the project, including regular reporting and updates on the project's performance.
   1. Provide detailed information on structure, core team members, and other resources the bidder has in place/will put in place for this assignment. This must also include a list of offices, partners in case of subcontracting/consortium bidding, and any other information the bidder deems necessary to support their claim of capacity to implement the assignment.

The Financial Proposal should include but not be limited to the following:

Bidders are expected to submit a financial proposal based on the terms of reference. The bidders will clearly show the applicable service fees charged to UNICEF and applicable transaction fees charged to beneficiaries, as per Annex D.