The World Bank Report No: ISR14048 Implementation Status & Results Nicaragua Micro, Small and Medium Enterprise Development (P109691) Public Disclosure Copy Operation Name: Micro, Small and Medium Enterprise Development (P109691) Project Stage: Implementation Seq.No: 14 Status: ARCHIVED Archive Date: 12-Apr-2014 Country: Nicaragua Approval FY: 2008 Product Line: IBRD/IDA Region: LATIN AMERICA AND CARIBBEAN Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 12-Jun-2008 Original Closing Date 31-Dec-2013 Planned Mid Term Review Date 13-Feb-2012 Last Archived ISR Date 14-Sep-2013 Effectiveness Date 16-Jun-2009 Revised Closing Date 31-Dec-2014 Actual Mid Term Review Date 13-Feb-2012 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to improve the competitiveness of micro, small, and medium enterprises (MSMEs) and the business climate that affects those firms. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Business Climate Improvement 3.90 Matching Grants for MSMEs 6.60 Increased Access to Financial Services for MSMEs 0.00 Institutional Development of MIFIC 1.90 Overall Ratings Public Disclosure Copy Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Implementation Status Overview This report fulfills the requirement of completing an ISR after a restructuring. Additionally, it summarizes the results of the November 2013 mission. During the November 2013 mission, the team reviewed the results and pace of implementation of the project. The team found that the project continues to produce positive results. The pace of implementation in the matching grants activity continues to be satisfactory and the project is complying with the established deadlines for the third round. Results for the Page 1 of 8 The World Bank Report No: ISR14048 matching grants include increased sales and number of full-time employees, and the introduction of new products and processes for recipient firms. Business climate activities are also complying with the established timeframes. The component is finally producing results, including decreases in times for obtaining permits and licenses. More specifically, of the project's two project development indicators, the target for one has been achieved and exceeded, while progress has been made on the other. Of the Public Disclosure Copy project's 28 intermediate indicators, including 15 subindicators, 9 have exceeded their targets and 3 have achieved their targets. Of the rest, most are on track to achieve their targets. Additionally, the pace of implementation continues to be strong. Approximately 68% of the loan has been disbursed and the project is on track to disburse the rest. During the mission and thereafter, government counterparts expressed an interest in a new project to continue some of the activities of this project and to address other business climate and enterprise development issues. More specifically, the activities of the business climate component have identified several other areas where significant improvements are possible. The Bank team is working with their government counterparts to develop a proposal for potential activities to discuss with the Ministry of Finance and Bank management. The team also reviewed the status of the transfer and any pending issues. With the amendment signed in July 2013, approximately half of the project was transferred to the Ministry of Family, Community, Cooperative, and Associative Economy (MEFC). The team found that the transfer process was relatively smooth and that high levels of involvement and commitment from the Government was critical. It was noted during the mission that communication between the two executing ministries could be improved. A new Minister was recently appointed in MEFC. The team will request a meeting with her during their April mission to ensure her support of the project's activities. With the July 2013 amendment, the Government and Bank agreed that the project would not support the construction of the National Metrology Laboratory and the Government will pay for this construction from its own resources. For this reason, approximately US$1.2 million was canceled from the project in December 2013. The project is still financing the purchase of equipment for this laboratory. Additionally, during the mission, the Government requested a reallocation of loan proceeds among the project categories to facilitate implementation during the last year. A simple restructuring was processed in February 2014 to complete this reallocation. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Decrease in time needed to start a business Days Value 39.00 36.00 30.00 Date 30-Jul-2013 30-Sep-2013 31-Dec-2014 Comments Doing Business 2014 report registered a decrease of 3 Public Disclosure Copy days. MSMEs receiving matching grants introduce Number Value 0.00 190.00 80.00 new products or processes Date 06-Oct-2009 28-Feb-2014 31-Dec-2014 Comments Previous information iwas Updated with last incorrect since reported restructuring. number of new products and processes, not number of firms. Intermediate Results Indicators Page 2 of 8 The World Bank Report No: ISR14048 Indicator Name Core Unit of Measure Baseline Current End Target 30 percent decrease in time needed to obtain a Days Value business license and construction permit. Date 16-Aug-2013 Public Disclosure Copy Comments See subindicators Revised indicator, see subindicators Business license: Alcaldia de Matagalpa Days Value 14.00 2.00 10.00 Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Target achieved and exceeded. Construction Permit: Alcaldia de Matagalpa Days Value 5.00 5.00 3.00 Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Business License: Alcaldia Municipal de Days Value 3.00 3.00 2.00 Chinandega Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Construction Permit: Alcaldia de Chinandega Days Value 4.00 10.00 3.00 Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Collected data indicates an increase from 2008 baseline. This is in part because full compliance with requirements was not occurring in 2008. Although the number of days increased, compliance has improved. A decrease is expected from this number by project-end. Business license: Alcaldia Municipal de Days Value 1.00 5.00 1.00 Granada Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Public Disclosure Copy Breakdown Comments Collected data indicates an increase from 2008 baseline. This is in part because full compliance with requirements was not occurring in 2008. Although the number of days increased, compliance has improved. A decrease is expected from this number by project-end. Page 3 of 8 The World Bank Report No: ISR14048 Construction Permit: Alcaldia Municipal de Days Value 3.00 7.00 2.00 Granada Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Collected data indicates an Public Disclosure Copy increase from 2008 baseline. This is because full compliance with requirements was not occurring in 2008. Although the number of days increased, compliance has improved. A decrease is expected from this number by project-end. Business license: Alcaldia Municipal de Leon Days Value 2.00 2.00 1.00 Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Construction Permit: Alcaldia Municipal de Days Value 12.00 5.00 8.00 Leon Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Target achieved and exceeded. Business license: Alcaldia Municipal de Rivas Days Value 2.00 1.00 1.00 Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Target achieved. Business license: Alcaldia Municipal de Days Value 3.00 6.00 2.00 Masaya Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Collected data indicates an increase from 2008 baseline. This is because full compliance with requirements was not occurring in 2008. Although the number of days Public Disclosure Copy increased, compliance has improved. A decrease is expected from this number by project-end. Construction Permit: Alcaldia Municipal de Days Value 5.00 30.00 3.00 Masaya Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Collected data indicates an increase from 2008 baseline. This is because full compliance with requirements Page 4 of 8 The World Bank Report No: ISR14048 was not occurring in 2008. Although the number of days increased, compliance has improved. A decrease is Public Disclosure Copy expected from this number by project-end. Business license: Alcaldia Municipal de Days Value 10.00 2.00 7.00 Bluefields Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Target achieved and exceeded. Construction Permit: Alcaldia Municipal de Days Value 10.00 5.00 7.00 Bluefields Sub Type Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Breakdown Comments Target achieved and exceeded. 30 percent decrease in the time to obtain food Days Value and health permits Date Comments See subindicators Revised indicator, see subindicators Health permit Days Value 180.00 140.00 126.00 Sub Type Date 30-Jun-2011 31-Dec-2013 31-Dec-2014 Breakdown Comments Food Permit Days Value 15.00 12.00 11.00 Sub Type Date 30-Jun-2011 31-Dec-2013 31-Dec-2014 Breakdown Comments Number of firms served by Decentralized Number Value 600.00 51318.00 3400.00 Support Centers (CAMIPYMEs) Date 06-Oct-2009 31-Dec-2013 31-Dec-2013 Comments Of the CAMIPYMEs Cumulative number of firms Cumulative supported by the project. served from Client that includes repeat firms. Public Disclosure Copy Commerce code presented to National Text Value No revision of commerce Sent Assembly code. Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Comments Process for revising code is underway. 10 month reduction in the time to obtain Months Value 18.00 4.00 8.00 trademark at RPI Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Comments Baseline date may need to be Target achieved and updated. exceeded. Page 5 of 8 The World Bank Report No: ISR14048 12 month reduction in the time to obtain patent Months Value 24.00 18.00 12.00 at RPI Date 10-Apr-2013 31-Dec-2013 31-Dec-2014 Comments Baseline date may need to be Public Disclosure Copy updated. At least 100 MSME understand and practice Number Value 0.00 279.00 100.00 health and safety measures at MITRAB Date 06-Oct-2009 31-Dec-2013 31-Dec-2014 Comments Target achieved and exceeded. Number of grants awarded (total) Number Value 0.00 513.00 600.00 Date 06-Oct-2009 31-Dec-2013 31-Dec-2014 Comments Currently 605 grants have Revised target been awarded but contracts have been signed with 511 firms. Amount of grants awarded. Amount(USD) Value 0.00 3854732.00 5800000.00 Date 06-Oct-2009 31-Dec-2013 31-Dec-2014 Comments Previous number was incorrectly inputted, should have been 2,416,120. Number of firms that implemented product or Number Value 0.00 359.00 120.00 process quality enhancement projects Date 06-Oct-2009 31-Dec-2013 31-Dec-2014 Comments Number of firms that introduces new products Number Value 0.00 190.00 80.00 and/or processes Date 06-Oct-2009 31-Dec-2013 31-Dec-2014 Comments Previous information in prior ISR was incorrect since it measured the number of processes and products, not the number of firms. Public Disclosure Copy Information corrected here. Number of firms that increase sales Number Value 0.00 241.00 120.00 Date 06-Oct-2009 31-Dec-2013 31-Dec-2014 Comments Target achieved and exceeded. Staff trained in project management, planning Number Value 53.00 60.00 and monitoring Date 06-Oct-2009 31-Dec-2013 31-Dec-2014 Comments Page 6 of 8 The World Bank Report No: ISR14048 Adequate technical fiduciary staff in place, Yes/No Value No Yes Yes clean audits Date 31-Dec-2013 31-Dec-2014 Comments Public Disclosure Copy Operational and Procurement Plans presented Yes/No Value Yes Yes Yes at start of every year. Date 31-Dec-2013 31-Dec-2014 Comments Presented prior to project effectiveness. Data on Financial Performance (as of 24-Mar-2014) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P109691 IDA-44680 Effective 12-Jun-2008 25-Jul-2008 16-Jun-2009 31-Dec-2013 31-Dec-2014 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P109691 IDA-44680 Effective XDR 12.30 8.08 4.22 5.54 2.53 69.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation Page 7 of 8 The World Bank Report No: ISR14048 With the July 2013 amendment, the Government and Bank agreed that the project would not support the construction of the National Metrology Laboratory and the Government will pay for this construction from its own resources. For this reason, approximately US$1.2 million was canceled from the project in December 2013. The project is still financing the purchase of equipment for this laboratory. Additionally, during the mission, the Government requested a reallocation of loan proceeds among the project categories to facilitate implementation during the last year. A simple restructuring was processed in February 2014 to complete this reallocation. Public Disclosure Copy Given that the project is in the last year of implementation, the Bank team will work with the Government to begin closing procedures and to ensure evaluation requirements are fulfilled. Restructuring History Level two Approved on 21-Jul-2011, Level two Approved on 16-Jul-2013, Level 2 CD Decision on 18-Feb-2014 Related Projects There are no related projects. Public Disclosure Copy Page 8 of 8