Money transfer research and market assessment Consultancy

This Call for Interest is open to all eligible Consultants, in accordance with hulo’s procedures and principles.

Context of the consultancy:

Global context – Hulo presentation

The Humanitarian Logistics Cooperative, also known as “hulo”, is the first humanitarian European Cooperative Society (SCE) created in June 2021. In March 2024, hulo counts 13 member organisations: ACTED, Action contre la Faim (ACF), Bioport, the French Red Cross (FRC), Fleet Forum, Handicap International / Humanity & Inclusion (HI), INTERSOS, Médecins du Monde (MDM), Oxfam Intermón, Plan International, Première Urgence International (PUI), Solidarités International (SI), and Welthungerhilfe (WHH).

Its objective is to increase the impact of humanitarian aid by strengthening links and solidarity between humanitarian logistics actors and improving performance through the pooling of logistics and supply chain resources and expertise. Hulo’s “Joint Initiatives” are already underway in 6 countries (Burkina Faso, Central African Republic, Democratic Republic of Congo, Lebanon, Jordan for the Syrian crisis, and Colombia) and include on the ground: Joint Procurement Initiatives, shared human resources, Digital Solutions, Joint Transport Initiatives and Joint Environmental Initiatives. At the global level (i.e., across Headquarters of hulo member organisations), hulo activities focus on Joint Procurement Initiatives. These initiatives save time and money, improve the quality of goods and services provided, and therefore provide more efficient assistance to those who need it most.

As a cooperative, hulo can rely on the network and expertise of its members (all established humanitarian organisations). Hulo currently employs approximately 40 people and is rapidly growing.

Specific context – Syrian context

The current humanitarian crisis in Syria has been ongoing since the onset of the civil war in 2012. Since the initial phases of the crisis response, humanitarian actors relied on cash transfer agencies (i.e.. Hawala) for various aspects of financing their operations inside Syria. After 12 years of the crisis, the system remains mostly unchanged and with limited number of service providers willing and able to provide this essential service. The system has a lot of limitations and the fee for the transfer service has been fluctuating with any increased demand or change in context. Almost entirely, the current service providers servicing the aid sector operate from Iraqi Kurdistan Region with bases in Erbil. As for North West Syria, INGOs that are registered in Turkiye have access to services provided by PTT. However, for those who are not registered or to send cash in hard-to-reach areas, INGOs would still have to use the Hawala agents.

Furthermore, there is a perceived loss of funds and loss of operational efficiency related to the fluctuating service fees and the (sometimes double imposed) currency exchange rates that are associated with bank transactions related to cash transfer services. In addition to the shortcomings related to the cash transfer system used by the humanitarian agencies working in Syria, the counter terrorism and economic sanctions imposed by multiple state actors on individuals and businesses in the middle east, have an additional negative impact. Banks and financial authorities tend to be over-compliant with sanction regimes, resulting in further delays and sometimes blockages of bank transfers. Inside Syria, some of MTA suppliers are known for providing low quality bills, which might suggest a long lifecycle inside the country and the lack of actual movement of notes across the border. This part remains unclear and needs to be further clarified.

Recently, the Iraqi federal bank issued a new regulation limiting the ability of clients to withdraw and deal in US dollars. This regulation was later clarified and simplified for some banks and some international NGOs, however, it limited the number of banks that can provide US dollars cash to their clients. Consequently, multiple NGOs started looking for alternative service providers and sign multiple new framework agreements to ensure the continuity of their operations. This situation, together with previous shortcomings of the money transfer system have decreased the trust of hulo member NGOs towards that system and triggered a willingness to look for alternatives for such a critical service that can jeopardize all of operations if it stops functioning for any reason.

Overall scope of work expected from the Consultant:

• Hulo members have agreed to commission a consultant/consulting team to evaluate the existing system and assess other available options for money transfer services into Syria. The interest of hulo members is to assess, not only alternatives to Erbil (i.e. other regional hubs, such as Dubai) as the main base for hawala agents, but also to assess completely new and innovative alternatives to the hawala system.
• This is expected to include both a desk research component (explaining and evaluating the currently used systems by hulo members, reviewing available published research and reports on the money transfer system, reviewing legislative frames in countries of operations of different suppliers who are able to provide the service in NES and NWS, interviewing of focal points and practitioners at member NGOs to clarify and document the existing practices and partner teams’ assessment efforts which already took place);
• And it also includes conducting a market assessment which includes reaching out to potential service providers and mapping the market for cash transfer services including the different comparative parameters between suppliers (price, speed, liquidity, locations of service inside Syria, etc…).
• The consultant(s) is/are expected to review the ToR and submit a proposal for the interview questionnaire for approval. After the interviews are completed, s/he/they will submit a proposal for the report layout for validation before the drafting of the report.

Key priorities

1. Analysing the current money transfer system:

Provide an updated mapping of the current market situation looking at the cash flows and their reliability on import stream, identify the local coping mechanism to inflation and SYP devaluation. Clarify the dependence on the imported cash bills versus the circulating cash bills and the bill traceability through hawala stamps. Analyse and explain the existing solutions used by hulo members for transferring cash to run their operations in Syria and related cash flows in different currencies (Syrian Pound, Turkish Lira, US Dollars). Analyse the appropriateness and efficiency of the used methods and clarify any losses/additional costs incurred due to excessive/unnecessary exchange rates or inefficient practices.

2. Finding practical solutions within the hawala system:

Identify better, cheaper, donor-compliant and more reliable solutions for money transfer into NES/NWS than the suppliers in use at the moment (suppliers based other countries/cities, with lower cost, clarifying the legal frame in different countries of operations)

3. Finding alternative solutions outside the hawala system:

Identify sustainable alternative/more innovative ways of working than the current MT system (explore and clarify the practicality of solutions such as Amana card, cryptocurrency, and others)

Research questions:

Q1: How does the current model of money transfer function and what are its limitations? How are hulo members transferring money for running their operations in Syria (NES + NWS)? What are the systems currently used and types of suppliers contracted for this service? How efficient and appropriate those methods? Are there any avoidable losses in cost or time or operational efficiency?

Q2: What are the available money transfer service providers and what are the service packages they can provide to hulo partners operating in Syria? Are there other service providers that are not currently providing their services to aid organizations operating in Syria who can provide cash services in Syria with acceptable and donor-compliant conditions for the participating partners?

Q3: What are the legislative frameworks that organize money transfer (Hawala) outside the banking system in countries in the region with access to cash services inside Syria (Iraq, UAE, KSA, Jordan, and other potential bases)? What are the legal and operational risks taken by NGO partners in engaging with such service providers?

Q 4: Are there more efficient, more sustainable, and more reliable ways of working for cash delivery inside Syria apart from using money transfer service providers?

Delivrables:

• 05/04/2024 Submit interview questionnaire for approval
• 15/04/2024 Conduct Interviews with hulo members to expand understanding of the current limitations and operational requirements
• 01/05/2024 Conduct interviews with potential service providers
• 04/05/2024 Submit layout of the mid-term report for approval
• 18/05/2024 Submit mid-term report draft answering questions 1, 2 & 3 including supplier mapping and contacts
• 25/05/2024 Present mid-term assessment findings to hulo members on the findings of the initial phase of the assessment
• 10/06/2024 Submit Final report draft answering all questions of the assessment
• 16/06/2024 Present the final findings of the report to hulo members
• 31/06/2024 Submit the final report incorporating the written and verbal feedback from hulo members and including all relevant annexes and data sets

Qualifications and Experience:

Interested Consultants should possess the following qualifications and experience:

• Strong knowledge of NGO’s financial process and flow is a must. Understanding of the unique challenges of the Syrian Crisis context is a plus.
• Strong knowledge of banking regulations.
• Previous experience conducting research projects and/or market analysis.
• Fluency in English is a must, Arabic is a plus.
• Ability to work autonomously with minimal supervision.
• Capacity to work with multiple interlocutors
• Excellent redaction skills in English.
• Previous experience in the Syrian Crisis context is a plus.

Management and Reporting Lines:

The Consultant will be working under the direct line management of the hulo Syrian Crisis Coordinator.

Schedule:

This consultancy is targeting a maximum of 30 working days within the April to June 2024 period.