The World Bank Implementation Status & Results Report Madagascar Financial Inclusion Project (P161491) Madagascar Financial Inclusion Project (P161491) AFRICA | Madagascar | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 2 | ARCHIVED on 13-Dec-2018 | ISR34594 | Implementing Agencies: Ministere des Finances et du Budget, Ministere des Finances et du Budget Key Dates Key Project Dates Bank Approval Date: 28-Feb-2018 Effectiveness Date: 27-Sep-2018 Planned Mid Term Review Date: 15-Jul-2020 Actual Mid-Term Review Date: -- Original Closing Date: 31-Jul-2022 Revised Closing Date: 31-Jul-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective of this project is to promote the financial inclusion of individuals and MSMEs in Madagascar. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Digitalization of transactions to increase usage of transaction accounts:(Cost $25.50 M) Access to credit for MSMEs:(Cost $16.50 M) Project Management and Impact Evaluation:(Cost $3.00 M) Contingent Emergency Response Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions 1- Digitalization of Government Payment. Negotiations between mobile payment services providers and the Government on the digitization of salaries of teachers and unbanked officials are not progressing due payment arrangements and high fees level asked by the Electronic Money Institutions (EMI).. It was agreed that the Public Accountant Office and the Taxation Office would prepare a call for expressions of interest, in order to seek interest from other providers, while continuing discussions with the EMI and the Bankers Association for a more and cost effective solution. . The TOR for the financial education to accompany the Digitalization process will be finalized. 2- Modernizing the Payment System Infrastructure 12/13/2018 Page 1 of 6 The World Bank Implementation Status & Results Report Madagascar Financial Inclusion Project (P161491) Regarding the implementation of the National Switch, the Central Bank (BFM) will produce the terms of reference to recruit a consultant to assist in the analysis technical specifications, , the definition of a business model and the support for the implementation of the digital platform (switch). The Steering Committee for the financial inclusion project will be involved in the selection of the consultant. Supported by a Retroactive financing of the Project, the infrastructure regarding the RTGS and ACH are delivered at the Central Bank. The Central Bank is required to transmit to the PIU the justification for processing the reimbursement. 3- Digitalization of MFIs In view of the multiplicity of support already received by microfinance Institutions (MFIs), including those in progress, and due to the lack of knowledge of the actual needs of each MFI, a need assessment be conducted in the area of digitization. The objective of this diagnostic will be to categorize the various MFIs in relation to the nature of the support to be provided, a definition of the selection criteria and to propose a timetable for implementation. Thus, the results of the diagnosis will also facilitate the implementation of the rural expansion of MFIs, which started under the PASEF. It was agreed that the Microfinance Association will transmit a TOR to conduct the diagnostic in coordination with the PMU will contribute. 4- Partial Portfolio Guarantee The funding for the extension of technical assistance was recommended to be released. The signing of the MU between the and the fund manager (SOLIDIS) has encountered delays and is slowing down implementation. It was agreed that the Government will sign the MOU as soon as possible. It is important to clarify either to sign a new Government/SOLIDIS convention or to send an official letter to SOLIDIS by the Ministry of Finance indicating the actions taken to bring the Convention of 10 July 2014 in accordance with the funding agreement of the PIFM. This letter will be accompanied by the revised manual of procedures. 5- Institutional set-up : (I) The project steering Committee will be implemented by an Arreté of the Minister of Finance no later than November 15, 2018; (ii) A Project Implementation Support committee will also be created to oversee the project implementation; (iii) the PIU staffing will be completed and trained on Financial Inclusion and FINTECH topic; (iv) The Budget and PBTA of the project will be submitted to the Bank no later than November 30 6- Reimbursement of the retractive Financing The reimbursement of the Retroactive Financing is underway, this include the 2.5 million$ to advance on the Capital of the GPP, the financing of the ACH/RTGS software of the Central Bank and the reimbursement of the two trips of the Central Bank's in India and in Ghana on Payment system. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High High High Macroeconomic Substantial Substantial Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Sustainability Substantial Moderate Moderate Fiduciary Substantial Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Substantial Substantial Moderate Other -- -- -- Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes 12/13/2018 Page 2 of 6 The World Bank Implementation Status & Results Report Madagascar Financial Inclusion Project (P161491) Number of currently unbanked (i) FRAM teachers/students that receive their government salary/scholar IN00603704 ►Number (cumulative) of MSME borrowers that banks and MFIs have registered under the partial portfolio credit guarantee since effectiveness of the project (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 Date 18-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603703 ►Number of currently unbanked (i) FRAM teachers/students that receive their government salary/scholarship and (ii) businesses that pay the "impot synthetique" through a transaction account (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 130.00 Date 18-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 Overall Comments PDO The project is at the beginning of implementation, the PIU is setting up the Monitoring and Evaluation Framework to conduct measuring the Project Result Indicators Intermediate Results Indicators by Components Digitalization of transactions to increase usage of transaction accounts IN00603740 ►Number of currently unbanked female (i) teachers/students that receive their government salary/scholarship and (ii) businesses that pay the "impot synthetique" through a transaction account (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 65.00 Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603705 ►The number of MFIs that allow loan repayment through a mobile money account (“wallet-to-account”) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2.00 Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603731 ►Shared MIS developed and operational (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes 12/13/2018 Page 3 of 6 The World Bank Implementation Status & Results Report Madagascar Financial Inclusion Project (P161491) Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603736 ►National Switch developed and operational (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603732 ►Number of consumers reached by the financial education campaign via mobile phone messages (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 60.00 Date 17-Oct-2017 28-May-2018 28-May-2018 30-Jun-2021 IN00603741 Number of female consumers reached by the financial education campaign via mobile phone messages (Number (Thousand), Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 30.00 Access to credit for MSMEs IN00603733 ►Percentage of loans extended to MSMEs registered under the portfolio guarantee that are non-performing (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.70 1.70 1.70 3.00 Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603735 ►Number of enterprises reached with BDS (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 500.00 Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603743 Number of women-led enterprises reached with BDS (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 250.00 IN00603734 ►Number of clients of the new MFI branches established through the project (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 12/13/2018 Page 4 of 6 The World Bank Implementation Status & Results Report Madagascar Financial Inclusion Project (P161491) Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603742 Number of female clients of the new MFI branches established through the project (Number (Thousand), Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 8.00 IN00603737 ►Banks and MFIs report data to a centralized electronic collateral registry (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603738 ►Percentage of banks and microfinance institutions reporting data to the CBSF on financial consumer complaints (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 30.00 Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 IN00603739 ►Report drafted annually on Citizen Engagement Survey (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 17-Oct-2017 28-May-2018 28-May-2018 29-Jul-2022 Overall Comments IR The project is at the beginning of implementation, the PIU is setting up the Monitoring and Evaluation Framework to conduct measuring the Project Result Indicators Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P161491 IDA-61890 Effective USD 45.00 45.00 0.00 4.04 39.65 9.2% Key Dates (by loan) 12/13/2018 Page 5 of 6 The World Bank Implementation Status & Results Report Madagascar Financial Inclusion Project (P161491) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P161491 IDA-61890 Effective 28-Feb-2018 19-Apr-2018 27-Sep-2018 31-Jul-2022 31-Jul-2022 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/13/2018 Page 6 of 6