The World Bank Report No: ISR8249 Implementation Status & Results Kosovo Kosovo Financial Sector Strengthening & Market Infrastructure Project (P108080) Public Disclosure Copy Operation Name: Kosovo Financial Sector Strengthening & Market Project Stage: Implementation Seq.No: 8 Status: ARCHIVED Archive Date: 19-Mar-2013 Infrastructure Project (P108080) Country: Kosovo Approval FY: 2008 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Central Banking Authorities of Kosovo, Kosovo Banking Association, Association of Microfinance Institutions of Kosovo (AMIK) Key Dates Board Approval Date 13-Dec-2007 Original Closing Date 30-Jun-2010 Planned Mid Term Review Date 01-Jun-2013 Last Archived ISR Date 24-Jun-2012 Effectiveness Date 03-Jan-2008 Revised Closing Date 30-Jun-2014 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The objectives of the Project are to (i) enhance the stability and development of the financial sector; and (ii) strengthen the financial secto� s underlying market infrastructure. Has the Project Development Objective been changed since Board Approval of the Project? � Yes No Component(s) Component Name Component Cost Assistance to CBK 1.67 Assistance to AMIK 0.24 Assistance to KBA 0.20 Establishment of a RTGS 1.87 Provision of seed funding to the DIFK 4.00 Public Disclosure Copy Establishment of a BCC 0.85 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Unsatisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating High Implementation Status Overview Page 1 of 7 The World Bank Report No: ISR8249 The project has been restructured and extended after the approval of additional financing (AF) on June 14, 2011 which was signed by the Ministry of Finance of Kosovo on August 3rd, 2011. After Parliament approval, the AF became effective on January 25, 2012. As part of the AF, the project’s objectives were broadened to include enhancing the financial sector market infrastructure and enhancing the efficiency and resiliency of the financial sector. Three new components were added: (a) Component 4 - Establishing a Real Time Gross Settlement (RTGS), (b) Component 5 - Establishing a Business Continuity Center (BCC), and (c) Component 6 - Providing seed funding for the Deposit Insurance Fund of Public Disclosure Copy Kosovo (DIFK) CBK has made significant progress in the achieving the Project Development Objectives for the Financial Sector Strengthening and Market Infrastructure project (FSSMIP) in recent months. In particular, progress that has been made in the institutional development of DFIK that led to the disbursement of the seed financing for DIFK. There have been delays in procurement and disbursement for the components related to the BCC and RTGS. However, for both components a detailed action plan has been discussed with the PMT that allow the project to be completed on time if they are followed. Now that the seed funding for DIFK has disbursed following the completion of the withdrawal conditions, DIFK and the Bank team are focused on the closing conditions that need to be completed before the project closes that primarily relate to the institutional development of DIFK. The Bank has worked closely with DIFK on developing an action plan that focuses on institutional development building of DIFK. Considering the significant involvement of KfW (both financially and in terms of technical assistance), the Bank is also working closely with KfW to ensure that the assistance provided by both the Bank and KfW is complementary and consistent. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Status of updated legal and regulatory Text Value Non existent Achieved Achieved framework for banks and NBFIs and capacity Date 01-Jan-2008 31-Dec-2012 30-Jun-2014 building in the financial sector Comments Status of operationalization of RTGS Text Value Non existent Non existent Achieved Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 Comments Status of establishment of a fully operational Text Value Non existent Non existent Achieved Business Continuity Center (BCC) Public Disclosure Copy Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 Comments Status of establishment of the DIFK Text Value Non existent Operational Operational Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 Comments Intermediate Results Indicators Page 2 of 7 The World Bank Report No: ISR8249 Indicator Name Core Unit of Measure Baseline Current End Target Conponent 1 - Number of missing and/or Number Value 0.00 0.00 0.00 outdated regulations and directives drafted for Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 Public Disclosure Copy banks and NBFIs new laws, which have been Comments 100% achieved passed recently or to be passed over the life of the project Component 1 - Automated database for off-site Text Value Off-site supervision database The firm has been selected Off-site supervision acquired and implemented is non existent and implementation has database for started. monitoring and analysis used in day to day work/supervision database Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 Comments Component 1 - Percentage of CBK staff trained Percentage Value 0.00 0.00 100.00 in using analytical tool and regarding new Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 regulations Comments Component 1 - Number of training sessions to Number Value 0.00 22.00 2.00 MFIs in transforming into deposit taking Date 01-Jan-2008 31-Dec-2012 30-Jun-2014 institutions and to other MFIs Comments Internediate Result 1: Number of activities Number Value 0.00 7.00 2.00 completed related to improvement of Banks Date 01-Jan-2008 31-Dec-2012 30-Jun-2014 and NBFIs - Number of training sessions to Comments bank officers and KBA staff on banking sector topics Component 2 - Status of operational integration Text Value Non existent Non existent Achieved of the RTGS system with the existing Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 Electronic Interbank Clearing System (EICS) Comments Public Disclosure Copy Component 2 - Status of operational integration Text Value Non existent Non existent Achieved of the RTGS system with the Central Securities Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 Depositary (CSD) Comments Percentage of transactions in GoK and CBK Percentage Value 0.00 0.00 100.00 securities settled in the RTGS system in Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 conformity with the principles of Delivery Comments Not measurable until versus Payment (DvP) implementation of RTGS is completed. Page 3 of 7 The World Bank Report No: ISR8249 Intermediate Result 2: Operationalization of Percentage Value 0.00 0.00 95.00 RTGS: Percent of payments settled Date immediately or with a short delay (<15 minutes) Comments Not measurable without Public Disclosure Copy implementation of RTGS Intermediate Result 3: Establishment of Fully Text Value Non existent Non existent Achieved Operational BCC - Status of completion of Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 refurbishment of the BCC facility Comments Component 3 - Percentage of failover from the Percentage Value 0.00 CBK's primary processing site to BCC, and Date 14-Jun-2011 30-Jun-2014 restoration back to the primary site, Comments successfuly demonstrated for all CBK's critical systems Component 4 - Contributed amount from GoK Amount(USD) Value 0.00 3.30 3.30 Date 14-Jun-2011 20-Dec-2012 30-Jun-2014 Comments GoK contribution transfered Intermediate Result 4: Establishment of the Text Value No Yes Yes DIFK - Premiums received from member banks Date 14-Jun-2011 31-Dec-2012 30-Jun-2014 Comments Return on Assets/Equity Percentage Value 8.86 100.00 Date 01-Jan-2008 30-Sep-2012 30-Jun-2014 Comments Q3 2012 This for monitoring only as core indicators no end value needed Percentage of project-supported institutions Percentage Value 100.00 100.00 that are reporting on this indicator Sub Type Supplemental Outstanding Microfinance Loan Portfolio Amount(USD) Value 130000000.00 100.00 Date 01-Jan-2008 30-Jun-2012 30-Jun-2014 Public Disclosure Copy Comments Exchange rate EUR/USD - This for monitoring only as 1.25/ amount in Euro = core indicators no end value 109,149. This indicator was needed added to meet the the Bank's reporting requirementsforMSME and will not be used to monitor and evaluate the project's performance. Page 4 of 7 The World Bank Report No: ISR8249 Percentage of project-supported institutions Percentage Value 100.00 100.00 that are reporting on this indicator Sub Type Supplemental Public Disclosure Copy Volume of Bank Support: Institutional Amount(USD) Value 0.00 165000.00 240000.00 Development - Microfinance Date 01-Jan-2008 01-Dec-2011 30-Jun-2014 Comments EUR 93146 (accumulated) - Assistance to AMIK (PAD, Exchange rate EUR/USD = P.44) 1.3362 % active loans to women - Microfinance Percentage Value 38.00 1.00 Date 01-Jan-2008 30-Jun-2012 30-Jun-2014 Comments This indicator was added to This for monitoring only as meet the the Bank's reporting core indicators no end value requirements for MSME and needed will not be used to monitor and evaluate the project's performance. Percentage of project-supported institutions Percentage Value 100.00 100.00 that are reporting on this indicator Sub Type Date 01-Jan-2008 20-Dec-2012 30-Jun-2014 Breakdown Comments Portfolio at Risk - Microfinance Percentage Value 4.50 1.00 Date 30-Jun-2012 30-Jun-2014 Comments on average among the 17 This for monitoring only as MFIs served. core indicators no end value needed Percentage of project-supported institutions Percentage Value 100.00 100.00 that are reporting on this indicator Sub Type Supplemental No of active loan accounts -Microfinance Number Value 62000.00 1.00 Public Disclosure Copy Date 01-Jan-2008 01-Jan-2012 30-Jun-2014 Comments This indicator was added to This for monitoring only as meet the the Bank's reporting core indicators no end value requirements for MSME and needed will not be used to monitor and evaluate the project's performance. Percentage of project-supported institutions Percentage Value 100.00 100.00 that are reporting on this indicator Sub Type Supplemental Page 5 of 7 The World Bank Report No: ISR8249 Data on Financial Performance (as of 08-Nov-2012) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date Public Disclosure Copy P108080 IDA-50060 Effective 14-Jun-2011 03-Aug-2011 25-Jan-2012 30-Jun-2014 30-Jun-2014 P108080 IDA-H3410 Effective 13-Dec-2007 14-Dec-2007 03-Jan-2008 30-Jun-2010 30-Jun-2014 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P108080 IDA-50060 Effective XDR 4.30 4.30 0.00 2.48 1.82 58.00 P108080 IDA-H3410 Effective XDR 1.30 1.30 0.00 0.74 0.56 57.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation • The seed funding for the Deposit Insurance Fund of Kosovo has been disbursed following the completion of the withdrawal conditions that were part of the financing agreement. • An action plan for the development of the Business Continuity Center and the implementation of the RTGS has been agreed to with the CBK. Both of these should ensure the efficient implementation of the components of the project that have seen delays in the upcoming months. Restructuring History Level two Approved on 27-Apr-2010 Page 6 of 7 The World Bank Report No: ISR8249 Related Projects P122084-Kosovo, Financial Sector Strengthening and Markets Infrastructure Project - Additional Finance Public Disclosure Copy Public Disclosure Copy Page 7 of 7