Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) Innovative Access to Finance (P147183) EUROPE AND CENTRAL ASIA | Turkey | Finance & Markets Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 6 | ARCHIVED on 30-Jun-2017 | ISR29031 | Implementing Agencies: Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB), Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) Key Dates Key Project Dates Bank Approval Date:22-Jul-2014 Effectiveness Date:04-Dec-2014 Planned Mid Term Review Date:15-Mar-2017 Actual Mid-Term Review Date:15-Dec-2016 Original Closing Date:31-Dec-2018 Revised Closing Date:31-Dec-2018 Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to improve access to longer term Islamic finance and to factoring for small and medium enterprises and export oriented enterprises. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name A credit line to TSKB to on-lend/finance intermediation through participation bank and factoring company PFIs to SMEs and EOEs.:(Cost $250.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Low  Low Implementation Status and Key Decisions Innovative Access to Finance (IA2F) Project became effective in December 2014. After a slow disbursement period in 2015 disbursement picked up significantly in 2016. TSKB disbursement continues to perform strongly in 2017. With a recent disbursement of US $ 30 million in June 2017 total 6/30/2017 Page 1 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) disbursement from World Bank has increased to US $ 204.4 million. 81 percent of the loan has been disbursed well ahead of the closing date (December 2018). TSKB has already committed full amount of the funds to participation banks and factoring companies in 2016. Final disbursement to SMEs and Export Oriented Enterprises (EOEs) is at US $ 224 (90 percent of the loan) million which is even higher than disbursement from the World Bank. This is driven by TSKB’s prudent approach, whereby drawdown from the World Bank depends on the collection rate of invoices, whereas disbursements to Participating Financial Institutions (PFIs) are made against proforma invoices. This shows that TSKB is bridge financing participation banks until the expenditures are documented. All of the factoring companies have disbursed their allocated portions in 2016. Most of the remaining funds are to be disbursed by Ziraat Participation Bank since Ziraat Participation Bank is the last PFI who signed a subsidiary loan agreement with TSKB in May 2016. Due to global and domestic uncertainties exchange rate volatility is high and growth expectations are milder which is limiting investment appetite and loan demand. Nevertheless, the pre-approved pipeline appears healthy and TSKB is actively managing PFI demand. According to latest available data (December 31, 2016) project continues to perform well in terms of achieving project development objectives. According to the indicators of the maturity performance of Islamic sub-financing and export factoring of factoring sub-financing, the project continues to exceed the targets. Weighted average maturity of Islamic sub-financing under the project is 2.7 times higher than the average maturity under PFIs own portfolio. Share of export factoring is 26.7 times higher compared to the share of export factoring in PFI’s own portfolio. In total 194 SMEs and EOEs have been financed under the project. 15 percent priority region disbursement requirement has already been met. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Moderate  Moderate Macroeconomic  --  Moderate  Moderate Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Low  Low Institutional Capacity for Implementation and Sustainability  --  Low  Low Fiduciary  --  Low  Low Environment and Social  --  Low  Low Stakeholders  --  Low  Low Other  --  Low  Low Overall  --  Low  Low Results Project Development Objective Indicators PHINDPDOTBL  Ratio of the average maturity of Islamic sub-financing under the project, over the average maturity of the Islamic finance PFIs’ portfolio not financed under the project. (Text, Custom) 6/30/2017 Page 2 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 2.70 2.70 >1 Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDPDOTBL  Ratio of export factoring sub-financing in the fact. portfolio financed under the project, over the fact. comp. PFIs’ export factoring finance in the factoring portfolio not financed under the project (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 26.60 26.60 >1 Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDPDOTBL  Number of SME beneficiaries financed by PFIs under the project (cumulative). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 82.00 82.00 300.00 Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDPDOTBL  Number of EOE beneficiaries financed by PFIs under the project (cumulative). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 112.00 112.00 30.00 Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 Overall Comments Intermediate Results Indicators 6/30/2017 Page 3 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) PHINDIRITBL  Number of PFIs under the project (cumulative). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 7.00 7.00 6.00 Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Volume of Bank support (cumulative, US$ million). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 147.90 204.40 250.00 Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Based on Core Indicator: Volume of Bank Support: Lines of Credit - SME (cumulative, US$ million). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 54.10 54.10 150.00 Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Outstanding export finance portfolio (US$ million). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 1,430 1,430 n/a Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 6/30/2017 Page 4 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) PHINDIRITBL  Based on Core Indicator: Outstanding SME finance portfolio (US$ million). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 11,803 11,803 n/a Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Number of active export finance accounts (not cumulative). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 488.00 488.00 n/a Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Based on Core Indicator: Number of active SME finance accounts (not cumulative). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 96,432 96,432 n/a Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Based on Core Indicator: Portfolio Quality: Portfolio at risk (%). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.40 0.40 0.30 n/a Date 31-Dec-2013 01-Dec-2016 23-Jun-2017 31-Jul-2018 6/30/2017 Page 5 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) PHINDIRITBL  Based on Core Indicator: Financial Sustainability: Return on Assets (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.80 2.30 2.30 n/a Date 31-Dec-2013 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Based on Core Indicator: Financial Sustainability: Return on Equity (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 17.90 18.90 19.10 n/a Date 31-Dec-2013 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Percent of SME sub-finance financing SME Sub-projects in priority regions. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 15.00 15.00 15.00 Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 PHINDIRITBL  Compliance with prudential regulation. (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Y Y Y Y Date 01-Aug-2014 01-Dec-2016 23-Jun-2017 31-Jul-2018 Overall Comments 6/30/2017 Page 6 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P147183 IBRD-84090 Effective USD 250.00 250.00 0.00 192.58 45.62 77% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P147183 IBRD-84090 Effective 22-Jul-2014 22-Aug-2014 04-Dec-2014 31-Dec-2018 31-Dec-2018 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) 6/30/2017 Page 7 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) There are no related projects. 6/30/2017 Page 8 of 8 Public Disclosure Copy