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: 11 | ARCHIVED on 19-Dec-2019 | ISR39912 | 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; and therefore the key project ratings 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$13.6 million had been transferred from DoSMEP to these PFIs. As of June 30, 2019, the four PFIs have fully approved sub-loans to 164 SMEs for an amount of LAK 111.69 billion (US$ 13.6 million). 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, phase II of the TA for SMEs commenced in September 2019. Positive feedback was received by the MSMEs trained according to the 12/19/2019 Page 1 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) ILO trainings Tracer Studies in various aspects including the quality of the trainings, trainers as well as the training methodologies. Secondly, the first phase of TA to PFIs by AFC has been successfully concluded in December 2019 and Phase II will commence in mid-January 2020. For that, the project entered into the MOU with STB, Sacom Bank and LDB for the Phase II in developing SME banking strategy. From the last mission, M&E team has improved the M&E templates used for the project. The new template and database of LOC monitoring is now completed. The M&E Specialist also completed the ILO training Tracer Study Report. The mission reiterated the importance of M&E activity and urged the project team to move forward with the Project Impact Assessment now that the procurement for this consultancy is finalized. Furthermore, the new Environmental and Social safeguards consultant commenced work in September 2019. 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 IN00783101 ►Volume of Bank Support: Lines of Credit - SME (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 11,530,000.00 13,600,000.00 15,000,000.00 Date 30-Sep-2014 29-Mar-2019 30-Jun-2019 30-Jun-2020 Due to the loss on exchange of US$1.4 million, current fund of LOC is only US$13.6 million. As the end of Comments: February 2018, the full US$13.6 million had been transferred from DoSMEP to the four PFIs (ST Bank, Sacom Bank, Lao China Bank, and Lao Viet Bank). As of June 30, 2019, total amount of LOC fund of LAK 12/19/2019 Page 2 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) 111.68 billion (US$ 13.6 million approximately) were approved by the 4 PFIs (SACOM Bank, ST Bank, LCNB, and Lao-Viet Bank) for 157 MSMEs (164 sub-loan contracts). Increase Department of SME Promotion's capacity to formulate and implement SME strategy IN00783102 ►% 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 0.00 70.00 Date 29-Mar-2019 29-Mar-2019 29-Mar-2019 30-Jun-2020 For the ILO training, 73% have used the business plan and/or improved their accounting system. For Comments: DOSMEP staff and PFIs, this indicator will be summarized in the Impact Assessment before project end. Strengthen business skills of participating SMEs IN00783103 ►% increase in employment at beneficiary SMEs (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Date 29-Mar-2019 29-Mar-2019 29-Mar-2019 30-Jun-2020 Data will be collected and summarized in the Impact Assessment before project end. Comments: Intermediate Results Indicators by Components 1. Line of Credit to Commercial Banks to Support SME Loans IN00783104 ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 139.00 159.00 150.00 Date 30-Sep-2014 29-Mar-2019 30-Oct-2019 30-Jun-2020 IN00783107 Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 62.00 57.00 20.00 IN00783108 ►Performance of SME loans (NPLs) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 12/19/2019 Page 3 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) Date 30-Sep-2014 29-Mar-2019 30-Oct-2019 30-Jun-2020 Based on data from PFIs, as of October 2019 all loans to SMEs were current (no NPLs). However, 16 Comments: SMEs are currently rated B and are possible to become NPLs. IN00783110 ►Number of SME Banking Strategies developed and adopted by PFIs (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2.00 Date 17-Apr-2019 17-Apr-2019 30-Oct-2019 30-Jun-2020 AFC assignment will commence in mid-January 2020. Comments: 3. Techical assistance IN00783105 ►Number of DOSMEP Staff receiving training (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 298.00 26.00 30.00 Date 30-Sep-2014 29-Mar-2019 30-Oct-2019 30-Jun-2020 As of October 2019, 21 DoSMEP staff have received English training. Out of current 34 DoSMEP staff, 26 Comments: have provided information on training participation (English and other trainings). Participation in further trainings will be summarized in the Impact Assessment. IN00783106 ►Number of SMEs benefiting from Technical Assistance (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 285.00 251.00 600.00 Date 30-Sep-2014 29-Mar-2019 30-Nov-2019 30-Jun-2020 Until November 2019, total 659 MSMEs have participated in the ILO trainings. (408 unregistered vs 251 Comments: registered; 339 SMEs vs 320 micro-enterprises) IN00783109 ►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 0.00 1.00 Date 30-Sep-2014 29-Mar-2019 30-Oct-2019 30-Jun-2020 The indicator was revised during June 2019 restructuring to reflect plans to update original plan (2016- Comments: 2020) to 2021-25. The consultant is currently drafting new Action plan. 12/19/2019 Page 4 of 6 The World Bank Implementation Status & Results Report Lao PDR - Small and Medium Enterprise Access to Finance Project (P131201) 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 8.81 0.26 97% 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 12/19/2019 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. 12/19/2019 Page 6 of 6