The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) EAST ASIA AND PACIFIC | Lao People's Democratic Republic | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 10 | ARCHIVED on 16-Jun-2019 | ISR37411 | Implementing Agencies: Ministry of Finance, Ministry of Industry and Commerce Key Dates Key Project Dates Bank Approval Date: 09-Jun-2014 Effectiveness Date: 15-Sep-2014 Planned Mid Term Review Date: 10-Jul-2017 Actual Mid-Term Review Date: 10-Jul-2017 Original Closing Date: 30-Jun-2019 Revised Closing Date: 30-Jun-2020 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) This project aims at providing long-term funding sources for banks to provide long-term credit to SMEs. The project will support the growth of privately-owned SMEs by increasing the supply of long-term finance provided by commercial banks and by strengthening thecapability of the Department for Small and Medium Enterprise Promotion (DOSMEP) to formulate and implement public policies that promote access to finance for SMEs. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name 1. Line of Credit to Commercial Banks to Support SME Loans:(Cost $15.00 M) 3. Techical assistance:(Cost $5.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions For the past six months, the project has achieved significant implementation progress of both components supported by a functional project management team; and therefore the key ratings of project remain Moderately Satisfactory. Several notable achievements during this reporting period include: Project Component 1 – Line of Credit. Currently there are four banks selected as PFIs for the project and US$13.6 million had been transferred from DoSMEP to these PFIs. As of March 31, 2019, approved loans to SMEs by the four PFIs of the Project have cumulatively reached LAK94.5 billion or US$11.5 million to 139 SMEs. 6/16/2019 Page 1 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) Project Component 2 – Technical Assistance. There has been continued progress with the delivery of the project’s key training for the PFIs and SMEs. First, The TA for SMEs has received good feedback from SMEs and PFIs, but has not yet reached the agreed targets due to launch delays and lack of demand among SMEs. Progress to date includes developing the SME toolkit tailored for Lao, and a cadre of business development service providers (11) to deliver the training to SMEs, and delivering training to 285 SMEs (according to quarterly progress report, 1Q19), compared to target of 600 by the end of June. The training will target a minimum of 600 SMEs in Lao PDR. Secondly, a reputable international consulting firm (AFC) completed the first phase of training for the PFIs in December 2019. A 12 month no-cost project extension and a revision to the monitoring and evaluation framework has been granted on June 4, 2019. This is necessary to fully achieve the project development objectives. The new closing date is now June 30, 2020. 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 -- Substantial Substantial Technical Design of Project or Program -- Substantial Substantial Institutional Capacity for Implementation and Sustainability -- Moderate Moderate Fiduciary -- Substantial Substantial Environment and Social -- Moderate Moderate Stakeholders -- Substantial Substantial Other -- -- -- Overall -- Substantial Substantial Results PDO Indicators by Objectives / Outcomes increase in long-term financing available to SMEs in participating banks IN00712797 ►Volume of Bank Support: Lines of Credit - SME (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10,700,000.00 11,530,000.00 15,000,000.00 Date 30-Sep-2014 31-Oct-2018 29-Mar-2019 30-Jun-2020 As the end of February 2018, US$13.6 million had been transferred from DoSMEP to the four PFIs (ST Bank, Sacom Bank, Lao China Bank, and Lao Viet). The cumulative disbursement of loans from the PFIs Comments: to the SMEs reached LAK 94.5 billion or US$ 11.3 million to 139 SMEs as of the end of October 2018. The (first three) PFIs expressed their optimism that they would be able to fully utilize the funds (approximately US$12 million) by the end of 2018. To date, Sacom Bank and ST Bank have fully 6/16/2019 Page 2 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) disbursed, while Lao China Bank has disbursed 77% of allocated funds, and Lao Viet Bank -23%. Both LVB and LNCB are expected to fully disburse funds during extension period, but WB has recommended close monitoring, particulary of LNCB which has been slow to utilize funds. Increase Department of SME Promotion's capacity to formulate and implement SME strategy IN00712800 ►% of trained DOSMEP Staff, SMEs and PFI staff reporting medium or intensive use of lessons learnt from Capacity Building Measures (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 70.00 Date 29-Mar-2019 -- 29-Mar-2019 30-Jun-2020 This will be measured through the Tracer Study which is part of the new national M&E Officer ToR. Comments: Strengthen business skills of participating SMEs IN00712801 ►% increase in employment at beneficiary SMEs (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 10.00 Date 29-Mar-2019 -- 29-Mar-2019 30-Jun-2020 Overall Comments PDO "Increase in Sales by beneficiary SMEs" has proven difficult to measure, and also has attribution problems. The new indicator will measure increase in employment in SMEs. The new indicator to measure quality of all TA activities will be measured through the impact assessment. Intermediate Results Indicators by Components 1. Line of Credit to Commercial Banks to Support SME Loans IN00712798 ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 176.00 139.00 150.00 Date 30-Sep-2014 31-Oct-2018 29-Mar-2019 30-Jun-2020 This figure consists of 124 SMEs which have borrowed from the PFIs and 52 SMEs which received Comments: training on safeguards. IN00712806 Female beneficiaries (Percentage, Custom Supplement) 6/16/2019 Page 3 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 62.00 62.00 20.00 IN00712803 ►Performance of SME loans (NPLs) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 Date 30-Sep-2014 31-Oct-2018 29-Mar-2019 30-Jun-2020 Based on data from the three PFIs, as of the end of February 2018 all loans to SMEs were current (no Comments: NPLs). IN00712805 ►Number of SME Banking Strategies developed and adopted by PFIs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 2.00 Date 17-Apr-2019 -- 17-Apr-2019 30-Jun-2020 3. Techical assistance IN00712799 ►Number of DOSMEP Staff receiving training (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 75.00 298.00 300.00 Date 30-Sep-2014 28-Feb-2018 29-Mar-2019 30-Jun-2020 From July 2017 to February 2018, an additional 30 DOSMEP staffs out of total 70 staffs of the Ministry of Industry and Commerce (MoIC) had received environment and social safeguard training. Adding Comments: this number to the previously reported number of DOSMEP's staffs receiving training of 45, the cumulative number increased to 75. IN00712802 ►Number of SMEs benefiting from Technical Assistance (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 52.00 285.00 600.00 Date 30-Sep-2014 28-Feb-2018 29-Mar-2019 30-Jun-2020 Thus far 52 SMEs had received training on E&S safeguards in the Vientiane, Savannakhet and Comments: Luangphrabang provinces. IN00712804 ►A cross-ministerial and outcome-oriented SME Development Action Plan (2021-2025) is developed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 1.00 6/16/2019 Page 4 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) Date 30-Sep-2014 28-Feb-2018 29-Mar-2019 30-Jun-2020 The SME Master Plan has been issued following the endorsement by the Prime Minister on 18 August Comments: 2017. A translated English version was made available in December 2017. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P131201 IDA-54710 Effective USD 10.00 10.00 0.00 9.08 0.00 100% P131201 IDA-H9580 Effective USD 10.00 10.00 0.00 8.26 0.81 91% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P131201 IDA-54710 Effective 09-Jun-2014 14-Aug-2014 15-Sep-2014 30-Jun-2019 30-Jun-2020 P131201 IDA-H9580 Effective 09-Jun-2014 14-Aug-2014 15-Sep-2014 30-Jun-2019 30-Jun-2020 Cumulative Disbursements 6/16/2019 Page 5 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) Restructuring History Level 2 Approved on 09-Sep-2016 ,Level 2 Approved on 04-Jun-2019 Related Project(s) There are no related projects. 6/16/2019 Page 6 of 6