The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) Access to Finance for MSMEs (P152307) LATIN AMERICA AND CARIBBEAN | Jamaica | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 4 | ARCHIVED on 11-Dec-2019 | ISR38796 | Implementing Agencies: Ministry of Finance and the Public Service, The Development Bank of Jamaica Key Dates Key Project Dates Bank Approval Date: 29-Jan-2018 Effectiveness Date: 29-May-2018 Planned Mid Term Review Date: 01-Jun-2020 Actual Mid-Term Review Date: Original Closing Date: 30-Jan-2023 Revised Closing Date: 30-Jan-2023 pdoTable 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 (MSMEs). Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Enhancement of the Credit Enhancement Facility (CEF):(Cost $5.55 M) Establishment of an SME Fund:(Cost $7.00 M) Improvement of enabling environment for access to finance and Business Development Services for MSMEs:(Cost $1.56 M) Project management:(Cost $0.85 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions A World Bank team visited Kingston during November 11-14, 2019 on a project implementation support mission. The implementation of activities under Component 1 is progressing as expected. The CEF was strengthened by adopting enhanced operational lending guidelines such as a loan portfolio guarantee scheme, and related operational parameters such as coverage ratios and loan amounts for eligible categories. The official launch event of the revamped CEF has taken place on November 21, 2019 with large participation from government, private financial sector, donors and other relevant stakeholders. Disbursement conditions for this component were met in April 2019 and subsequently the first tranche for the capitalization of the Credit Enhancement Facility (CEF) was disbursed in June 2019. Component 3 is progressing as expected, with the Procurement for the reverse factoring electronic platform (one of the largest contracts) being in final stages of completion with implementation 12/11/2019 Page 1 of 5 The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) launch expected in January 2020. The full delivery of the platform together with the launch of the reverse factoring pilot are expected by April 2020. On Component 2, the preparatory work for the launch of the SME fund has been finalized (this included legal review, tax study, and demand studies) and the request for proposal for the selection of the fund manager is expected to be launched by DBJ in December 2019. Financing activities of the SME Fund are expected to start in year 3 of the project implementation. On the procurement side, out of the twenty-three procurement processes/activities foreseen in the current Procurement Plan, eleven contracts have been signed so far. Five of the twenty-three planned activities are under implementation and the rest of the activities are still pending implementation. This means that there was a slight increase in the number of contracts signed and activities launched under the project since the last Project ISR in June 2019. Based on this, the procurement rating for the Project was upgraded to “Satisfactory”. On financial management, The project has been submitting timely IFRs. IFR for the quarter ended September 2019 was received on time and was adequate. The first audit report for the period ended March 31, 2019 was received in August 2019 and was reviewed by the Bank. It was a clean audit report and did not highlight any substantial risks to the financial management of the project. The project’s FM implementation and status results (ISR) rating is Satisfactory. On safeguards, the Environmental and Social Management Framework (ESMF) was revised to more effectively manage the Client’s potential environmental and social risk, streamline the process and work flow, and digitize the application/reporting process. Financial intermediary training on Environmental and Social risks management aspects will be initiated in early 2020. The project’s Safeguards rating is Satisfactory Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Substantial Substantial Macroeconomic High High High Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Sustainability Substantial Substantial Substantial Fiduciary Substantial Substantial Substantial Environment and Social Moderate Moderate Moderate Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes The PDO is to improve access to finance for micro, small and medium enterprises (MSMEs) IN00750822 ►Number of SMEs getting access to risk capital through the SME Fund (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 15.00 12/11/2019 Page 2 of 5 The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) Date 29-Jan-2018 29-Mar-2019 29-Nov-2019 30-Jan-2023 IN00750823 ►Number of guarantees issued for MSME loans through the improved CEF (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 78.00 162.00 413.00 1,178.00 Date 29-Jan-2018 29-Mar-2019 31-Oct-2019 30-Jan-2023 Overall Comments PDO The PDO level result for the number of guarantees issued for MSME loans though the improved CEF has exceeded year 2 target. The PDO level result for the number of SMEs getting access to risk capital through the SME Fund remains at 0 given that the process for the selection of the fund manager and the establishment of the SME fund is still pending. Intermediate Results Indicators by Components Enhancement of the Credit Enhancement Facility (CEF) IN00750926 ►Improvements of the DBJ's institutional capacity in credit risk management of AFIs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Procurement underway (final stages) for a digital solution to support the The DBJ has limited The DBJ has assessment of The DBJ has limited institutional capacity to adequate systems and participating lenders institutional capacity to scale sustainably the expertise in place to Value and automation of scale sustainably the CEF's operations but a scale and manage the guarantee approval CEF's operations. training program is being CEF, in a sustainable processes. Training designed. manner. has been provided to strengthen DBJ staff's expertise in credit risk management. Date 29-Jan-2018 29-Mar-2019 29-Nov-2019 30-Jan-2023 IN00750929 ►Volume of guarantees provided to MSME loans (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4,412,800.00 7,942,728.00 19,834,977.22 135,954,685.00 Date 29-Jan-2018 29-Mar-2019 31-Oct-2019 30-Jan-2023 Establishment of an SME Fund IN00750825 ►Private capital mobilized (Amount(USD), Custom) 12/11/2019 Page 3 of 5 The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10,000,000.00 Date 29-Jan-2018 29-Mar-2019 29-Nov-2019 30-Jan-2023 IN00750928 ►Volume of risk capital provided to SMEs (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 11,500,000.00 Date 29-Jan-2018 29-Mar-2019 29-Nov-2019 30-Jan-2023 Improvement of enabling environment for access to finance and Business Development Services for MSMEs IN00750824 ►Percentage of beneficiaries that feel project activities reflected their needs (Citizen Engagement Indicator) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 75.00 Date 29-Jan-2018 29-Mar-2019 29-Nov-2019 30-Jan-2023 IN00750927 ►New business development service platform operational (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 29-Jan-2018 29-Mar-2019 29-Nov-2019 30-Jan-2023 RFB for technical solution provider for the platform is to be issued in December 2019 Comments: Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P152307 IBRD-88220 Effective USD 15.00 15.00 0.00 3.07 11.93 20% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P152307 IBRD-88220 Effective 29-Jan-2018 02-Mar-2018 29-May-2018 30-Jan-2023 30-Jan-2023 12/11/2019 Page 4 of 5 The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/11/2019 Page 5 of 5