Terms of Reference (TOR)

For creating Access to Childcare through Tailored Access to finance

1. Background and Rationale

Mercy Corps Ethiopia, with support from the Conrad N. Hilton Foundation, is implementing an initiative aimed at strengthening women’s economic empowerment and improving the sustainability, quality, and growth of childcare and women-owned micro and small enterprises in Addis Ababa.

Creating affordable and accessible childcare services has multifaceted benefits including creating a safe place for children, enabling mothers to have time to engage in productive work both self and wage employment opportunities. However, women from host communities, refugees, and Internally Displaced Persons (IDPs) face
compounded economic and social barriers, including limited access to finance, weak business planning capacity, low financial literacy, restricted market access, and limited exposure to formal Business Development Services (BDS). Particularly, Women economic participation is constrained by lack of affordable and accessible childcare services. These challenges are severe for low income and marginalized targets due to high upfront costs, irregular income streams, and limited access to financial services. Therefore, the purpose of this assignment is to enable willing and selected financial institutions to design, deliver accessible tailored financial products that support women/households in financing to access childcare services through affordable and flexible payment mechanisms that will foster economic empowerment and financial inclusion.

2. Objective of the Assignment

To improve access to affordable childcare services for marginalized and underserved households mainly women through tailored and affordable inclusive financial product implemented by the financial institutions.

2.1 Specific Objectives

• Tailor financial product for low-income families Host, IDP and Refugees for access to childcare service.
• Reduce financial barriers to childcare access through subsidized financing mechanism
• Promote women participation in employment and livelihood opportunities
• To document learnings on utilization of tailored financial products for productive uses

3. Scope of Work

The activity will be implemented in Addis Ababa and will target women from host, refugee and internally displaced communities. The selected financial institution will accomplish the following tasks

• Market and Financial Need assessment: – Analyze the financial barriers faced by families to access childcares service, their ability and willingness to pay and required regulatory considerations.
• Product Development: Design a financial product tailored for childcare access that has flexible payment modality based on women income patters, affordable/low interest rate, eligibility and targeting mechanisms coupled with risk mitigation strategies
• Product Implementation: Pilot the provision of tailored financial products for eligible mothers who are willing to access childcare services, with a simplified loan application process.
• Project Risk Sharing: – The project will share the risk for childcare service fees, link financial institution with providers, provide technical support during product rollout including selection of target groups who are low income, women led and working mothers. Integrate project-supported risk sharing mechanisms where applicable (e.g., interest reduction, partial guarantees, or service-linked subsidies.
• Collaboration and coordination: – Collaborate and coordinate with project teams targeting childcare actors, government stakeholders and implementing partners for facilitation of payment and linkage among the childcare centers and users.

4. Deliverables

• Inception report
• A detailed assessment report that includes the financial product with the flexible modality of payment and agreed interest rates with implementation plan
• Periodic report on number of target groups reached, amount of loan taken and access to childcare services.
• Loan uptake, repayment performance and challenges and learning

5. Duration of the partnership

• The partnership is expected to run for 5 months, subject to performance review and mutual agreement.

6. Required Qualification

Mercy Corps seek financial institutions with proven experience and willingness to provide the required services as mentioned above. In particular, the financial institution is expected to have the following minimum qualifications:

• The financial institution should be legally registered and licensed.
• Financial institutions require demonstrated experience in serving low-income clients, having diversified products and being willing to tailor for the needs of the target group.
• The institution needs to have operational presence in target implementation areas.
• Demonstrate commitment to financial inclusion and women’s economic empowerment.

7. APPLICATION PROCESS & SELECTION CRITERIA

Following the procurement notice, qualified financial institutions are required to submit both a financial and technical proposal

7.1. Technical proposal (70%)

• Understanding the scope of work and comprehensiveness of the methodology/approach; and the workplan (30%).
• Context understanding, and prior experience of similar assignments related to innovative financial product mechanisms for low-income groups in Ethiopia (40%).
• Brief outline of the proposal approach aligned with the TOR

7.2. Financial Proposal (30%)

• The financial proposal, submitted in a separate document, should be simple, and the proposals shall indicate all applicable taxes separately in a clear manner.

Completed documents must be submitted to Mercy Corps by July 24, 2026, 5:00 PM.

Submit the completed technical and financial proposals via email to et-tender-questions@mercycorps.org  and ensure the tender reference number is clearly indicated in the subject line of the email.