The World Bank Financial Education and Financial Literacy (P120338) REPORT NO.: RES38476 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF FINANCIAL EDUCATION AND FINANCIAL LITERACY PROJECT APPROVED ON DECEMBER 7, 2010 TO RUSSIAN FEDERATION FINANCE, COMPETITIVENESS AND INNOVATION EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Renaud Seligmann Regional Director: Lalita M. Moorty Practice Manager/Manager: Marialisa Motta Task Team Leader: Soren Nellemann The World Bank Financial Education and Financial Literacy (P120338) ABBREVIATIONS AND ACRONYMS CP Consumer Protection FL Financial Literacy FM Financial Management FEFL The Financial Education and Financial Literacy Loan FGI Fund of Good Ideas ICRR Implementation Completion and Results Report ISRs Implementation Status Reports LA Loan Agreement MOF Ministry of Finance of the Russian Federation M&E Monitoring and Evaluation PAD Project Appraisal Document PDO Project Development Objective PIU Project Implementation Unit POM Project Operational Manual RF Russian Federation The World Bank Financial Education and Financial Literacy (P120338) BASIC DATA Product Information Project ID Financing Instrument P120338 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 07-Dec-2010 31-Dec-2020 Organizations Borrower Responsible Agency Ministry of Finance,Noncommercial Foundation for Russian Federation Enterprise Restructuring and Financial Institutions Development (FER) Project Development Objective (PDO) Original PDO Project development objectives are to: (i) improve the financial literacy of Russian citizens (especially, among the school-age and college students, and active and potential low- and middle-income users of financial services); and (ii) strengthen the foundations for improving consumer protection in financial services. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-79830 07-Dec-2010 14-Mar-2011 29-Jul-2011 31-Dec-2020 25.00 21.05 3.94 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Financial Education and Financial Literacy (P120338) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING The Financial Education and Financial Literacy (FEFL) Project (US$25 million IBRD loan) became effective July 29, 2011. The implementing agency is the Ministry of Finance (MOF). The FEFL Project aims to: (i) improve the financial literacy of Russian citizens (especially, among the school age and college students, and active and potential low- and middle-income users of financial services); and (ii) strengthen the foundation for improving consumer protection in financial services. Progress towards achievement of PDO and overall Implementation Progress are rated as satisfactory. All PDO-level indicators show a positive trend, and some have already exceeded the target. For example, 71,8 percent of the target population in the original two pilot regions (Kaliningrad and Volgograd) understand the trade-off between risks and rewards in choosing a financial product against target value of 68 percent. As of September 9, 2019, US$21.05 million (or 84.23 percent) of the US$25 million IBRD loan was disbursed. The last Project restructuring dated March 13, 2018 extended the Project closing date from April 30, 2019 to December 31, 2020, and the Borrower added co-financing of an additional US$54.0 million, bringing the total of Borrower financing to US$142 million. This additional financing allowed to increase Project scale and outreach. The Project now reaches almost all Russian regions in various formats. The number of beneficiaries has grown significantly. The results achieved to date are quite significant and can lead to the development of a community of practice for other countries to widely gather and disseminate knowledge and scale up results. The additional co-financing from the Borrower will help further expand the regional coverage of the Project, scale up its impact, and finance an additional round of a survey on Financial Literacy (3 rounds have already been completed and the fourth round of the survey will be completed by December 2019) and the 7th round of competitive selection of proposals for the Fund of Good Ideas. II. DESCRIPTION OF PROPOSED CHANGES On September 4, 2019 the MOF informed the Bank of its decision to increase the Borrower’s co-financing by another $11,829,066 (bringing the total to $221,485,048) to further expand the regional coverage of the Project and requested a corresponding change to the disbursement percentages under Category (1) Goods, Technical Services, consultants’ services, and Sub-project Financing. The loan agreement will be amended accordingly. The proposed amendment will not entail any additional Operating Costs. The restructuring will not change the PDO and associated outcomes. Composition of the FEFL’s components and institutional arrangements will also remain unchanged. The share of Borrower’s co-financing under Category (1) will increase from 93.45 percent to 94.47 percent, with a simultaneous reduction of the share of expenditures to be financed from the Loan from 6.55 percent to 5.53 percent, effective as of November 1, 2019. The World Bank Financial Education and Financial Literacy (P120338) EXPECTED DETAILED CHANGES BY COMPONENTS Under Component 1, an additional 5th round of a specialized nationwide household survey on financial literacy will be conducted using the methodology of the specialized long-term nationwide financial literacy survey developed under the Project on the basis of the OECD methodology. The results will be analyzed and interpreted to calculate the Project output indicators. Under the Regional Sub-component of Component 2, the number of Russian regions where the Project results will be disseminated to improve sustainability of the Project will increase. The total number of regions that will be involved in Project activities under Component 2 will increase to 67. Additional textbooks included in the financial literacy teaching and learning toolkits for grades 2-11 of general secondary and vocational schools, orphanages and boarding schools will be printed and disseminated in the regions to provide teaching guidance to educators trained at the Regional Methodological Centers and to support the training process in regional educational institutions. The additional print run will be 5 million copies, increasing the total print run from 8 million to 13 million. All regions that have a cooperation agreement with the MoF providing for the delivery of the teaching and learning toolkits are expected to receive the required by regions number of textbooks. Educational Sub-component of Component 2 is supposed to support training of school/college teachers and methodologists in 10 additional regions. As a result, there will be over 50 regions covered by educator training through the system of regional and interregional methodological centers established under the Project. As a result, the total number of educators from various levels of the education system and disciplines to be trained under the Project will increase, e.g. target value for number of teachers of the relevant disciplines prepared by the Project will increase from 38,000 to 46,000 specialists; number of methodologists for general education and vocational schools, prepared by the Project will increase from 1,500 to 1,600 specialists. Results framework is updated accordingly. It is also proposed to extend methodological support to the earlier trained specialists, develop e-workbooks for students and additionally organize quest games that were developed under the Project during the next National Savings Week of 2020. The plan is to conduct an additional Financial Literacy Festival during the National Savings Week of 2020 and extend the journalist outreach to promote financial literacy of the population. Also, due to the fact that the support of the hotline and online public office for financial consumers had been delegated to Rospotrebnadzor, it allowed to make saving of about $430,000 for activities under Component 4. These savings will make it possible to expand the regional coverage of activities aiming to disseminate the Project’s best practices through regional libraries. Under the Fund of Good Ideas (FGI), it is proposed to hold the seventh round of the competitive process to select initiatives aiming to replicate and disseminate Project best practices in regions. As a result, support would be given to at least 8 new initiatives in financial literacy, financial consumer protection and information campaign. All proposed changes reflected in the Results framework presented below. The World Bank Financial Education and Financial Literacy (P120338) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Disbursement Estimates ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank Financial Education and Financial Literacy (P120338) OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2011 0.00 0.00 2012 984,537.02 984,537.02 2013 2,052,187.20 2,052,187.20 2014 1,876,816.99 1,876,816.99 2015 2,587,363.61 2,587,363.61 2016 3,043,194.94 3,043,194.94 2017 4,411,510.23 4,411,510.23 2018 3,440,550.64 3,440,550.64 2019 1,463,264.71 1,463,264.71 2020 3,364,580.91 0.00 . The World Bank Financial Education and Financial Literacy (P120338) . Results framework COUNTRY: Russian Federation Financial Education and Financial Literacy Project Development Objectives(s) Project development objectives are to: (i) improve the financial literacy of Russian citizens (especially, among the school-age and college students, and active and potential low- and middle-income users of financial services); and (ii) strengthen the foundations for improving consumer protection in financial services. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 PDO Indicators on Financial Education and Literacy 1.1 (1.1.1) % of active and potential low- and middle-income users of financial services understanding the trade-off between risk and 63.90 68.00 68.00 rewards in choosing financial products in Kaliningrad & Volgograd (Percentage) 1.1 (1.1.2) % of active and potential low- and middle-income users of financial services understanding the trade-off between risk and 66.30 68.00 rewards in choosing financial products in 7 other regions (Percentage) 1.2 (1.2.1) % of school-aged and college students understanding risk-reward trade-off and rewards 53.00 55.00 in choosing financial products in Kaliningrad and Volgograd pilot regions (Percentage) 1.2 (1.2.2) % of school-aged and college 51.90 54.00 students understanding risk-reward trade-off The World Bank Financial Education and Financial Literacy (P120338) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 and rewards in choosing financial products in 7 other regions (Percentage) 2.1 (2.1.1) % of active and potential low- and middle-income users of financial services understanding the importance of financial cushion 30.50 37.00 in Kaliningrad and Volgograd pilot regions (Percentage) 2.1 (2.1.2) % of active and potential low- and middle-income users of financial services 31.70 33.00 understanding the importance of financial cushion in 7 other regions (Percentage) 2.2 (2.2.1) % of school-aged and college students understanding importance of financial cushion in 75.50 77.00 Kaliningrad and Volgograd pilot regions (Percentage) 2.2 (2.2.2) % of school-aged and college students understanding importance of financial 74.50 76.00 cushion in 7 other regions (Percentage) 3. (3.1) % of active and potential low- and middle- income users of financial services who compare alternatives before obtaining a credit in 69.20 72.00 Kaliningrad and Volgograd pilot regions (Percentage) 3. (3.2) % of active and potential low- and middle-income users of financial services who 60.20 63.00 compare alternatives before obtaining a credit in 7 other regions (Percentage) The World Bank Financial Education and Financial Literacy (P120338) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 4. (4.1) % of active and potential low- and middle- income users of financial services who know what aministrative/legal action to be taken having 32.20 42.00 discovered a deceit by provider of a financial service (Percentage) 4. (4.2) % of active and potential low- and middle-income users of financial services who know what aministrative/legal action to be 39.60 42.00 taken having discovered a deceit by provider of a financial service (Percentage) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Development of financial literacy strategy and financial literacy and consumer protection monitoring and evaluation 1.1 Financial literacy strategy is developed and agreed between No Yes key stakeholders (Text) 1.2 Requirements to education programs are approved by the No Yes Expert Board (Text) 1.3 Four rounds of the FL assessment are conducted in YR Yes, with extension survey shifted from Y7 to Y8 and now No 2,5,8,10 (Text) also year 10 1.4 Four rounds of the Consumer Finance Survey are conducted Yes, with extension survey moved from Y7 to Y8 and now No in YR 2,5,8, 10 (Text) also year 10 1.5 Ministry of Finance establishes dedicated working group on No Yes financial literacy and consumer protection (Text) The World Bank Financial Education and Financial Literacy (P120338) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target 1.6 Amendments to the federal legislation to provide for effective consumer protection in financial markets and financial No Yes literacy are prepared (Text) Financial Literacy Capacity Building 2.1 # of regional FL development programs being implemented 0.00 9.00 with the Project support (Number) 2.2 (2.2.1) # of teachers of the relevant subjects trained by the Project in regions (two pilot and new participating regions) 0.00 46,000.00 (Number) Action: This indicator has been Revised 2.3 (2.2.2 (methodists) and 2.4 (consultants) # of financial literacy specialists (consultants) and methodists trained for 0.00 8,200.00 general education and vocational schools by the Project regions (two pilot an (Number) Action: This indicator has been Revised (2.7) Number of financial literacy textbooks published and 0.00 13,000,000.00 distributed in regions (up to < 6,000,000) (Number) Action: This indicator has been Revised # methodists for general education and vocational schools, 0.00 1,600.00 prepared by the Project (Number) Action: This indicator has been Revised 2.3 (2.3: # students - future teachers trained under the Project 0.00 12,000.00 in financial literacy) (Number) 2.6 FL information and educational portal established and fully No Yes operational (Text) The World Bank Financial Education and Financial Literacy (P120338) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target 2.5. #education events carried out by financial consultants, 0.00 21,000.00 prepared by the Project (Number) Action: This indicator has been Revised 2.8. #of additional regions (regions where the Project results will 0.00 67.00 be dessiminated) (Number) Action: This indicator is New Strengthening of consumer protection in financial services 4.1 A system of hotline call centers to advise consumers on financial issues is established and operational (Yes or No) 0.00 0.00 (Number) 4.1.1 Total number of complaints consultations on financial consumer rights issues provided by Rospotrebnadzor 17,175.00 180,000.00 specialists (target value - 10 000 annualy) (Number) Action: This indicator has been Revised 4.1.2 Number of financial consumer complaints examined through Rospotrebnadzor "hotlines" and public officers 7,801.00 120,000.00 (target value - 5000 complaints annualy) (Number) Action: This indicator has been Revised 4.2 Special system for submitting and handling financial No Yes consumer complaints in e-format is developed (Text) 4.3 An e-library (infotheque) on topical CP issues is established No Yes and operational (Text) 4.4 Number of Rospotrebnadzor consulting centres for 0.00 500.00 consumers in Russian Federation (Number) 4.5 # of Rospotrebnadzor specialists trained during the Project 0.00 1,500.00 on financial consumer protection and financial literacy (Number) The World Bank Financial Education and Financial Literacy (P120338) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Action: This indicator has been Revised # of other state budgetary institutions' specialists trained 0.00 2,000.00 during the Project (Number) Rationale: # of other state budgetary institutions' specialists trained during the Project to promote responsible financial behavior and Action: This indicator is New financial literacy 4.6 # of the reports dedicated to the financial consumer protection, containing independent monitoring results and 0.00 9.00 recommndations (Amount(USD)) (4.8) # of information materials (booklets/leaflets) on financial consumer protection distributed to consumers by 0.00 9,100,000.00 Rospotrebnadzor staff (Amount(USD)) Development and implementation of education programs and information campaign for improving financial literacy, incl $14 million in sub-projects 3.1 (3.1.2) # of educational modules and learning materials 0.00 120.00 developed nationally at federal level (Number) Action: This indicator has been Revised 3.1 (3.1.1) # educational programs created at Federal level 0.00 36.00 (Number) Action: This indicator has been Revised (3.9) Number of digital products (information, edutainment and social ad videos, games, webpages) created under Funds 0.00 160.00 of Good Ideas (Number) Action: This indicator has been Revised 3.2 National information campaign designed and launched (Text) No Yes The World Bank Financial Education and Financial Literacy (P120338) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target 3.3 (3.6) # of financial literacy and consumer protection improvement initiatives supported through the Fund of Good 0.00 124.00 Ideas (Number) 3.1.3. # of digital learning resources, created at the Federal level 0.00 30.00 (Number) Action: This indicator is New 3.2. #of participants of events carried out within "Financil 0.00 7,500,000.00 Literacy Week" (Number) Action: This indicator is New 3.7. # of study cources worked out under the Fund of Good Ideas 0.00 50.00 (Number) Action: This indicator is New 3.8. # of printed materials issued under the Fund of Good Ideas 0.00 100.00 (Number) Rationale: Action: This indicator is New 3.8. # of printed materials (brochures, leaflets, etc.) issued under the Fund of Good Ideas IO Table SPACE The World Bank Financial Education and Financial Literacy (P120338)