The World Bank Implementation Status & Results Report Belarus MSME Access to Finance Project (P152276) Belarus MSME Access to Finance Project (P152276) EUROPE AND CENTRAL ASIA | Belarus | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 4 | ARCHIVED on 26-Jul-2019 | ISR37969 | Implementing Agencies: Development Bank of the Republic of Belarus, Data-Processing Center, Development Bank of the Republic of Belarus Key Dates Key Project Dates Bank Approval Date: 28-Sep-2017 Effectiveness Date: 19-Apr-2018 Planned Mid Term Review Date: 31-Mar-2020 Actual Mid-Term Review Date: -- Original Closing Date: 31-Dec-2022 Revised Closing Date: 31-Dec-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to improve access to finance for private MSMEs and enhance governance and the institutional capacity of the Development Bank of the Republic of Belarus. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component I: Line of Credit to MSMEs:(Cost $56.20 M) Component II: Institutional Strengthening of DBRB:(Cost $3.25 M) Component III: Project Management and Implementation:(Cost $0.55 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 Following partial currency conversion, disbursement of the project has accelerated and stands at 12.9% (as of July 12, 2019), which while still below the expected level is a significant improvement. The World Bank and the Development Bank of the Republic of Belarus are monitoring the disbursement and working together to support the successful implementation of the project. 7/26/2019 Page 1 of 6 The World Bank Implementation Status & Results Report Belarus MSME Access to Finance Project (P152276) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Substantial Substantial Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate 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 Improve access to finance for MSMEs IN00726341 ►Growth of DBRB MSME loan portfolio provided through participating financial institutions (PFIs) (percent) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 312.00 170.00 Date 30-Sep-2017 29-Jun-2018 01-Jul-2019 31-Dec-2022 This indicator is tracked on an annual basis, using end of year financials. The indicator measures the growth rate of DBRB loans to private MSMEs through PFIs. US$33 million outstanding portfolio to commercial banks in support of private MSMEs as of January 1, 2017 corresponds to the baseline of 0%. The growth rate is calculated based on unconsolidated financial statements of the DBRB. It includes all of Comments: DBRB's financing activities to commercial banks in support of private MSMEs both via the Bank-financed portion and DBRB's own MSME programs. It is calculated as follows: [Outstanding Portfolio (year n) / Outstanding Portfolio (baseline)] - 1 IN00726342 ►Number of MSME beneficiaries that obtained credit under the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.00 30.00 150.00 Date 30-Sep-2017 31-Dec-2018 01-Jul-2019 31-Dec-2022 7/26/2019 Page 2 of 6 The World Bank Implementation Status & Results Report Belarus MSME Access to Finance Project (P152276) Enhance the governance and institutional capacity of DBRB IN00726150 ►Governance and business model of DBRB strengthened (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Yes Yes Value No Yes Date 30-Sep-2017 29-Jun-2018 01-Jul-2019 31-Dec-2022 The indicator ensures that DBRB meets the following conditions: (i) operates on a financially sustainable basis, (ii) is in compliance with applicable NBRB regulations, (iii) operates increasingly on a wholesale basis (with new loans and guarantees extended via other Belarusian banks), (iv) has a majority of independent supervisory board members. (i) As of July 2019, DBRB had a positive return on assets and regulatory capital (according to the national standards). (ii) DBRB was also in compliance with the applicable requirements of the NBRB including capital adequacy, liquidity, and asset quality. (iii) DBRB granted 2,355 million BYN new loans in 2018, 9% Comments: of which through PFIs and leasing companies (and 91% directly), compared to 2% percent through PFIs (and 98% directly) in 2016. (iv) As of March 24, 017, the DBRB Supervisory Board has no NBRB representative and consists of 8 members, 5 of whom are independent (more than half of the Supervisory Board), which corresponds to the best international practice of corporate governance. The amended Decree on the DBRB has been prepared, reviewed by the World Bank, and is pending approval by the Head of State. Intermediate Results Indicators by Components Credit Line IN00726343 ►Volume of loans disbursed under the project (US$, millions) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.68 6.52 56.20 Date 30-Sep-2017 31-Dec-2018 01-Jul-2019 31-Dec-2022 IN00726345 ►Number of active PFIs under the project (cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.00 7.00 3.00 Date 30-Sep-2017 31-Dec-2018 01-Jul-2019 31-Dec-2022 There are 8 PFIs, of which 7 are active (have extended credit). A SFA is currently under negotiation for an Comments: additional PFI IN00726347 ►Portfolio Quality: Portfolio at risk (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 1.77 2.00 n/a 7/26/2019 Page 3 of 6 The World Bank Implementation Status & Results Report Belarus MSME Access to Finance Project (P152276) Date 30-Sep-2017 29-Jun-2018 01-Jul-2019 31-Dec-2022 This is a MSME Core Intermediate Result Indicator. It offers no baseline or targets, as PFIs were not preselected at the time the project was approved and the indicator collection is for analytical purposes and project implementation adjustments. Comments: The Portfolio-At-Risk (share of non-performing assets) as of June 30, 2019 was 2.0% for DBRB, 5.3% for Belagroprombank, 6.65% for Belinvestbank, 0.59% for Alfa-Bank, 1.5% for Belaruski Narodny Bank, 1.6% for MTBank, and 1.3% for Priorbank, 1.9% for Belgazprombank, 1.34% for Bank Dabrabyt. IN00726349 ►Gender: share of businesses beneficiaries that obtained credit under the project with at least 15 percent female workforce participation (percent) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 1.00 n/a Date 30-Sep-2017 29-Jun-2018 01-Jan-2019 31-Dec-2022 The gender data has no target as it is collected for analytical purposes and towards the design of future projects. The semi-annual report for the period January - July 2019, will be shared with the WB by August 15, 2019 Comments: and will be reflected in the next ISR. IN00726350 ►Citizen Engagement: MSMEs that report that project sub-finance reflected their needs (Percentage) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 n/a n/a >90 Date 30-Sep-2017 29-Jun-2018 01-Jul-2019 31-Dec-2022 Institutional Strengthening IN00726344 ►Financial Sustainability: Return on Assets (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 3.10 2.70 n/a Date 30-Sep-2017 29-Jun-2018 01-Jan-2019 31-Dec-2022 This is a MSME Core Intermediate Result Indicator. It offers no baseline or targets, as PFIs were not preselected at the time the project was approved and the indicator collection is for analytical purposes and project implementation adjustments. Belagroprombank OJSC – 0.54% Comments: MTBank CJSC – 5.1% (as of 01/01/2018)) Belinvestbank OJSC – 1.22% Alfa-Bank CJSC – 2.7% (as of 01/01/2018) Belaruski Narodny Bank CJSC – 1.74% IN00726346 ►Financial Sustainability: Return on Equity (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 13.50 12.70 n/a 7/26/2019 Page 4 of 6 The World Bank Implementation Status & Results Report Belarus MSME Access to Finance Project (P152276) Date 30-Sep-2017 29-Jun-2018 01-Jan-2019 31-Dec-2022 This is a MSME Core Intermediate Result Indicator. It offers no baseline or targets, as PFIs were not preselected at the time the project was approved and the indicator collection is for analytical purposes and project implementation adjustments. Belagroprombank OJSC – 3.26% Comments: MTBank CJSC – 42.2% (as of 01/01/2018) Belinvestbank OJSC – 9.6% Alfa-Bank CJSC – 17.6% (as of 01/01/2018) Belaruski Narodny Bank CJSC – 12.6% IN00726348 ►Compliance with prudential regulation (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Yes Yes Yes Yes Date 30-Sep-2017 29-Jun-2018 01-Jan-2019 31-Dec-2022 DBRB and the PFIs are in full compliance with the prudential requirements of the National Bank of the Comments: Republic of Belarus (NBRB). Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P152276 IBRD-86960 Effective USD 60.00 60.00 0.00 8.45 43.06 16% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P152276 IBRD-86960 Effective 28-Sep-2017 12-Oct-2017 19-Apr-2018 31-Dec-2022 31-Dec-2022 Cumulative Disbursements 7/26/2019 Page 5 of 6 The World Bank Implementation Status & Results Report Belarus MSME Access to Finance Project (P152276) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 7/26/2019 Page 6 of 6