Public Disclosure Copy The World Bank Implementation Status & Results Report MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance (P157691) MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance (P157691) EUROPE AND CENTRAL ASIA | Turkey | Finance & Markets Global Practice | IBRD/IDA | Investment Project Financing | FY 2016 | Seq No: 4 | ARCHIVED on 14-Nov-2017 | ISR30039 | Implementing Agencies: Türkiye Halk Bankası A.Ş. (Halkbank), Türkiye Halk Bankası A.Ş. (Halkbank), Türkiye Halk Bankası A.Ş. (Halkbank) Key Dates Key Project Dates Bank Approval Date:22-Dec-2015 Effectiveness Date:21-Jan-2016 Planned Mid Term Review Date:15-Mar-2018 Actual Mid-Term Review Date:-- Original Closing Date:01-Jul-2019 Revised Closing Date:01-Jul-2019 Project Development Objectives Project Development Objective (from Project Appraisal Document)

The Project Development Objective (PDO) is to improve access to finance for micro, small and medium enterprises, and longer term finance to large enterprises involved in domestic supply chains.

Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name The establishment and operation of a credit facility for the provision of Sub-loans to MSMEs and LEs to finance the carrying out of Sub- projects.:(Cost $200.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Unsatisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Unsatisfactory  Moderately Satisfactory Overall Risk Rating  Moderate  Moderate Implementation Status and Key Decisions 11/14/2017 Page 1 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance (P157691) Halk Bank achieved a significant progress in disbursements since June 2017. Disbursement from World Bank increased by US$ 70 million to US $ 110 million by October 2017. World Bank disbursements to Halk Bank and Halk Bank disbursement to final beneficiary SMEs and Large Enterprises stand at 55 percent. In addition, there is a strong pipeline and disbursement is expected to continue strongly. Halk Bank has also fulfilled its commitment already in October to disburse at least half of the loan amount until the end of 2017. Overall, Turkish economy’s strong growth performance in 2017 is supportive for the MSME/LESCF project implementation, with exports picking up and expansionary fiscal policy supporting consumption, investment and employment. The Turkish economy registered a GDP growth of 5.1 percent in Q2 2017 (yoy) and high frequency indicators point to a continuation of recovery in the remaining quarters. Loan growth in the banking sector, especially in the SME segment, accelerated sharply following the newest Credit Guarantee Fund scheme introduced in early 2017. Known for its expertise in SME banking, Halkbank continued to increase its loan portfolio in 2017. Halkbank’s market share in loans and receivables in Turkey’s total banking sector surpassed 9 percent in Q2 2017, up from 8 percent in Q2 2015. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  Low  Moderate  Moderate Macroeconomic  Moderate  Moderate  Moderate Sector Strategies and Policies  Moderate  Moderate  Moderate Technical Design of Project or Program  Low  Low  Low Institutional Capacity for Implementation and Sustainability  Low  Low  Low Fiduciary  Low  Low  Low Environment and Social  Low  Low  Low Stakeholders  Low  Low  Low Other  --  --  -- Overall  Moderate  Moderate  Moderate Results Project Development Objective Indicators PHINDPDOTBL  Ratio of the average portfolio maturity of MSME sub-loans under the project, over the average portfolio maturity of Halkbank’s MSME portfolio not financed under the project. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 -- 2.30 >1 Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 11/14/2017 Page 2 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance (P157691) PHINDPDOTBL  Ratio of the average portfolio maturity of LE sub-loans under the project, over the average portfolio maturity of Halkbank’s LE portfolio not financed under the project. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 -- n.a. >1 Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 PHINDPDOTBL  Number of MSME beneficiaries financed under the project (cumulative). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 24.00 240.00 Date 25-Jan-2016 -- 01-Mar-2017 25-Jan-2019 PHINDPDOTBL  Number of LE beneficiaries financed under the project (cumulative). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 20.00 Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 PHINDPDOTBL  Volume of support (cumulative, USD million). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10.43 10.40 200.00 Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 Overall Comments Intermediate Results Indicators 11/14/2017 Page 3 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance (P157691) PHINDIRITBL  Volume of support to MSMEs (cumulative, USD million). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10.43 10.40 120.00 Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 PHINDIRITBL  Based on Core Indicator: Outstanding MSME finance portfolio (USD million). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a -- 16,788.8 n/a Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 PHINDIRITBL  Based on Core Indicator: Number of active MSME finance accounts (not cumulative). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a -- 586.66 n/a Date 25-Jan-2016 -- 01-Mar-2017 25-Jan-2019 PHINDIRITBL  Based on Core Indicator: Portfolio Quality: Portfolio at risk (%). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3.60 -- 3.20 n/a Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 11/14/2017 Page 4 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance (P157691) PHINDIRITBL  Based on Core Indicator: Financial Sustainability: Return on Assets (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.50 -- 2.10 n/a Date 25-Jan-2016 -- 01-Mar-2017 25-Jan-2019 PHINDIRITBL  Based on Core Indicator: Financial Sustainability: Return on Equity (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 14.40 -- 22.40 n/a Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 PHINDIRITBL  Percent of MSME sub-loans financing sub-projects in priority regions. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.24 0.24 15.00 Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 PHINDIRITBL  Compliance with prudential regulation. (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Y Y Y Y Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 11/14/2017 Page 5 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance (P157691) PHINDIRITBL  Citizen Engagement: MSMEs and LEs that feel project sub-loans reflected their needs (percentage) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- n.a. n/a Date 25-Jan-2016 01-Mar-2017 01-Mar-2017 25-Jan-2019 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P157691 IBRD-85690 Effective USD 200.00 200.00 0.00 136.50 63.50 68% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P157691 IBRD-85690 Effective 22-Dec-2015 28-Dec-2015 21-Jan-2016 01-Jul-2019 01-Jul-2019 Cumulative Disbursements 11/14/2017 Page 6 of 7 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report MicroSmall&Medium Enterprise and Large Enterprise Supply Chain Finance (P157691) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 11/14/2017 Page 7 of 7 Public Disclosure Copy