Request for Proposal for Review and Revision of Internal Credit Rating Model (ICRM) for Assessing Micro Finance Institutions and Not-for-profit Community Organizations
Head Office, National Housing Bank
Core 5-A, 4th Floor, India Habitat Centre, Lodhi Road
New Delhi – 110003
E-Mail : email@example.com
|1.||Last Date and Time for Receipt of Bidding Documents||Friday, 11-07-2008 6.00 pm|
|2.||Date and Time of Technical Bid Opening||Monday, 14-07-2008 3.00 pm|
|3.||Place of Opening of Bids||National Housing Bank, Project Finance Department Head Office Core 5-A, 4th Floor India Habitat Centre, Lodhi Road New Delhi – 110003|
INSTRUCTIONS TO BIDDER
National Housing Bank National Housing Bank (NHB), a statutory organisation, is a wholly owned subsidiary of the Reserve Bank of India. NHB is an Apex Financial Institution formed under the Act of the Parliament with a mandate to promote, develop and regulate the Housing Finance Sector. Apart from regulating the housing finance companies (HFC), NHB also extends financial support by way of equity participation in HFCs and refinance facility to financial institutions such as Banks, HFCs, Co-operative Sector Institutions, Housing Agencies, etc. in urban and rural areas. NHB also extends project finance support for housing to different categories of institutions such as housing boards and public agencies, public private partnership companies, Micro Finance Institutions (MFIs), not-for-profit organizations.
Housing Micro Finance (HMF) support to MFIs, not-for-profit organizations is a growing focus area for NHB, given huge housing shortage in the lower income segments in the informal sector. NHB has been extending housing micro finance support for the last four years, and has developed systems and procedures for the same, including an Internal Credit Rating Model for assessing the institutions against their eligibility for such support.
The Head Office of NHB is located in New Delhi with Regional Office in Mumbai and Representative Offices in Hyderabad, Chennai, Bengaluru and Kolkata.
To review and revise the Internal Credit Rating Model (ICRM) of National Housing Bank (NHB) for financing Micro Finance Institutions (MFIs) including not-for-profit community based organizations, Non Governmental Organizations (NGOs) constituted as Registered Societies or Trusts or Section 25 Companies.
II. Scope of Work
(i) To review the existing ICRM for MFIs in the light of the experience gained so far and the developments in the sector relating to MFIs.
(ii) To study, examine and document comparable models being used by other financial institutions in India and abroad.
(iii) To develop ICRM for not-for-profit community based organizations (CBOs) as potential clients of NHB to channelise credit to the lower income groups.
(iv) To develop ICRM for organizations which hitherto were only engaged as originating and servicing agents for institutional lenders but were not lending on their own accord, i.e. organizations which are migrating to lending.
(v) To suggest a suitable appraisal, administrative and monitoring framework for such not-for-profit organizations including standard appraisal formats, application forms duly taking into consideration the special features of community based organizations, the longer tenure of housing loans and the lack of experience on the part of such organizations in managing credit risk over long periods.
i) Study past experience of NHB
(ii) Study and compare credit rating models for micro finance lending in India and abroad, particularly for housing loans.
(iii) Study the country context and range of MFIs undertaking housing micro finance or having the potential to undertake housing micro finance.
(iv) Identify the relevant parameters / variables with assessment.
(v) Review legal and institutional framework of the community based organizations with reference to their suitability for long term borrowings.
(vi) Study the capacity of the MFIs to undertake long term housing micro finance.
(vii) Validate new ICRM vis-à-vis external ratings, if any.
(viii) Suggest periodicity for review of the ICRM for these institutions in view of rapid changes in the segment.
(i) ICRM for rating of community based organizations, differentiating between not-for-profit community based financial institutions (CBFIs) and for-profit MFIs taking into account various factors like legal constitution, size, regional characteristics, business strategies, operating methodologies, customer profiles, financial strength, risk management capabilities, business models, etc.
(ii) Standard appraisal framework, format for appraising CBFIs and application forms, periodic reporting formats to be submitted by CBFIs, and suitable MIS framework in the Bank, preferably compatible with SAP.
V. Eligibility Criteria for Bidders
(i) Public limited company
(ii) Minimum 5 years’ experience in credit rating in India and / or abroad particularly in the rating of Micro Finance Institutions. Weightage will be given to bidders having experience in rating Housing Micro Finance institutions and not-for-profit organizations.
VI. Bidding Process (2 Stages)
For the purpose of the present assignment, a two-stage bidding process will be followed. The response to the RFP will be submitted in two parts :
- Technical bid Part I
- Financial / Commercial bid Part II
The bidder will have to submit the Technical bid and Commercial portion of the bid separately in two separate red lac-sealed envelopes (wax seal), duly superscribing “Review and Revision of Internal Credit Rating Model (ICRM) for Assessing Micro Finance Institutions and Not-for-Profit Community Organizations “, “Technical Bid” or “Financial / Commercial Bid” as the case may be.
Technical Bid shall not contain any pricing or commercial information.
The bid shall be typed or written in indelible ink and shall be signed by the Bidder or a person duly authorized by him. The authorization shall be indicated by a written power of attorney accompanying the Bid. All pages of the Bid shall be initialed by the person(s) signing the Bid.
The Bid shall contain no interlineations, erasures or overwriting except as necessary to correct errors made by the Bidder, in which case corrections shall be initialed by the person(s) signing the Bid.
VII. Bid Document for Technical Bid
The Bid Document for Technical Bid shall contain the following details :
(i) Experience in developing Credit Rating Models for Financial institutions, MFIs and housing micro finance entities.
(ii) Experience in credit rating in micro finance and housing microfinance (at least three summary rating documents to be submitted) with contact details of clients
(iii) Experience in designing of financial products and operating framework for financial products with contact details of clients
(iv) Experience in providing consultancy services for the micro finance and housing micro finance sectors with contact details of clients
(v) Composition of Board of Directors and details of key personnel including their qualifications, experience etc.
(vi) Proposed work
- Methodology to be adopted
- Time to be taken
- Composition of team for the proposed work including the qualifications, experience, track record of the team members
VIII. Bid Document for Financial / Commercial Bid
The Bid Document for Financial / Commercial Bid shall contain the amount bid for the proposed work including the break up for different components and the payment schedule. All the amounts shall be mentioned only in Indian Rupees.
IX. Evaluation of Technical Bids
Criteria and Point System for the evaluation of the Technical Bids are as under :
|1.||Experience in credit rating in micro finance||10|
|2.||Experience in credit rating in housing micro finance||10|
|3.||Experience in designing of financial products and operating framework for financial products||10|
|4.||Experience in providing consultancy services for micro finance||05|
|5.||Experience in providing consultancy services for housing micro finance||05|
|6.||Composition of team for the proposed work, their qualifications, experience, track record||15|
|7.||Methodology of proposed work||10|
|8.||Time to be taken||10|
Rating references may be provided in respect of sr. nos. 1 – 5 above.
The minimum qualification score for the Technical Bid will be 45.
X. Evaluation of Financial / Commercial Bids
The Financial / Commercial Bids of only those bidders who achieve the minimum qualification score in the Technicial Bid will be opened.
The bid amount should be inclusive of all taxes and applicable Government levies.
The Financial / Commercial Bid will carry maximum score of 25. Bids will, therefore be evaluated on maximum score of 100.
XI. Submission of Bids
The bidders shall duly seal each envelope and place both the envelopes in a third envelope, which shall also be sealed. The outer envelope shall be superscribed in bold letters “Bid for Review and Revision of ICRM”.
The Bid shall be sent / delivered to the Bank at the following address :
General Manager (Project Finance)
National Housing Bank
Head Office Core 5-A, 4th Floor, India Habitat Centre, Lodhi Road
New Delhi – 110003
XII. Last Date and time for Submission of Bids
Bids must be received by the Bank at the address specified in Clause XI of this document not later than the specified date and time as mentioned on page 2 of this document. In the event of the specified date of submission of bids being declared a holiday for the Bank, the bids will be received up to the appointed time on next working day.
XIII. Late Bids
Any bid received by the Bank after the deadline for submission of bids will be rejected and / or returned unopened to the Bidder, if so desired by him / her.
XIV. Modifications to and / or Withdrawl of Bids
- Bids once submitted will be treated as final and no further correspondence will be entertained on the subject.
- No bid will be modified after the deadline for submission of bids.
- No bidder shall be allowed to withdraw the bid, if the bidder happens to be a successful bidder.
XV. Cost of Bidding
The bidder shall bear all the costs associated with the preparation and submission of bid and Bank will in no case be responsible or liable for these costs regardless of the conduct or outcome of the bidding process.