Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) Morocco Microfinance Development Project (P144500) MIDDLE EAST AND NORTH AFRICA | Morocco | Finance, Competitiveness and Innovation Global Practice | Recipient Executed Activities | Investment Project Financing | FY 2013 | Seq No: 10 | ARCHIVED on 14-Jun-2019 | ISR37489 | Implementing Agencies: Ministry of Economy and Finance, Ministry of Economy and Finance, Central Bank of Morocco (Bank Al-Maghrib) Key Dates Key Project Dates Bank Approval Date:27-Jun-2013 Effectiveness Date:25-Jul-2013 Original Closing Date:31-Jan-2018 Revised Closing Date:30-Jun-2019 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project objective is to promote access to finance to low income households and micro and small enterprises through the promotion of a sustainable and inclusive microfinance sector. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory Implementation Status and Key Decisions This project, a $4.9 million grant financed under the Middle East and North Africa Transition Fund (Deauville) and implemented by the Moroccan Ministry of Economy and Finance (MEF), aims to improve access to finance for low-income households and micro and small businesses through the development of an inclusive and sustainable microfinance sector. The project is aligned with the first pillar of the new Morocco country partnership framework (CPF) 2019-2024 which aims to promote job creation through improving competition and business enabling environment reforms, particularly for micro, small, and medium-sized enterprises (MSMEs). The project finances four types of outputs: 1) studies and diagnostic aimed at accelerating reforms related to the supervision and regulation of the 6/14/2019 Page 1 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) sector; 2) improvements to market infrastructure (mapping tools, communications support for sector association); 3) training tools (financial education/literacy), and 4) convening support in the form of workshops and conferences. Since the latest reporting period (June 2018), activities have advanced across all three components of the project. Deliverables of strategic importance to Moroccan authorities include: • First stage reform of the reform of the microfinance sector. Law No. 85-18 submitted to parliament amends Law No. 18-97 on microcredit authorizing an increase in the maximum lending size from MAD 50,000 to MAD 150,000. • Finalization and endorsement of Morocco national financial inclusion strategy. The strategy, presided by the Minister of Finance, with an implementation mechanism chaired by the Governor of Bank Al-Maghrib, calls for increasing the number of adults with access to an account from 20% in 2018 to 50% in 2023 and 75% in 2030, with the emphasis on improving access points, developing digital platforms, financial resilience (savings, insurance) and SME financing. • Finalizing the 5,000-sample size findex survey exercise. The survey demonstrates that only 29% of Moroccan adults have access to a formal transaction account. The findex survey demonstrates there is large opportunity for banks to design more appropriate, accessible, and affordable financial products, particularly for women. Equally there is a big opportunity to develop digital financial services. 91% of adults in Morocco with a dormant account have a mobile phone. Connected, there is a big opportunity to drive inclusion through digitizing social payments through agricultural supply chains/payments as well as moving remittances from over-the-counter to accounts. Survey data can be found here: https://globalfindex.worldbank.org/ The project is set to close June 30, 2019. 6/14/2019 Page 2 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) 6/14/2019 Page 3 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) 6/14/2019 Page 4 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) 6/14/2019 Page 5 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) Risks Overall Risk Rating Risk Category Rating at Approval Previous Rating Current Rating Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL % of Adults (and women) with an account at a formal financial institution, including low income households (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 39.00 29.00 29.00 51.00 Date 01-Dec-2012 10-Apr-2018 04-Jun-2019 28-Jun-2019 Comments This indicator is measured by the Findex survey exercise. The survey is conducted every four years. The team will discuss an updated survey provided the project gets extended to get updated data prior to project closure. PHINDPDOTBL Number of end-beneficiaries of MFIs, including low-income households, microenterprises, and small firms (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 6/14/2019 Page 6 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) Value 804,000.00 937,599.00 925,000.00 1,100,000.00 Date 01-Dec-2012 29-Dec-2017 15-Mar-2019 01-Feb-2018 Comments 925,000 is the latest data point received from authorities during the March 2019 supervision mission and the preparation of the FIDE DPF. The task team is working with authorities to get updated figured for end June 2019, which we suspect to be higher than 925,000. PHINDPDOTBL Portfolio at Risk - Microfinance (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 6.70 3.00 3.46 6.40 Date 01-Dec-2012 17-Aug-2017 15-Mar-2019 01-Feb-2018 PHINDPDOTBL Outstanding Microfinance Loan Portfolio (USD mn) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 550.00 808.00 816.00 590.00 Date 01-Dec-2012 20-Jul-2017 14-Mar-2019 01-Feb-2018 Overall Comments Intermediate Results Indicators 6/14/2019 Page 7 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) PHINDIRITBL Institutional, Legal, Regulatory, Tax and Governance Framework for Microfinance: Regulatory Studies Strengthening Completed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 2.00 3.00 Date 01-Dec-2012 10-Apr-2018 14-Mar-2019 30-Jun-2019 Comments 1. Completed study on the institutional and regulatory framework for microfinance. 2. Completed study on the market potential for microfinance. Note study on risk management in the microfinance sector is currently being finalized by PWC and will meet the intermediate indicator accordingly. PHINDIRITBL Strengthening Institutional, Legal, Regulatory, Tax and Governance Framework for Microfinance: Number of operational and regulatory initiatives implemented by BAM and other key stakeholders (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 3.00 3.00 Date 01-Dec-2012 10-Apr-2018 14-Mar-2019 30-Jun-2019 Comments 1. Restructuring of the sector association (FNAM) after the 2013 workshop on the legal and regulatory framework for microfinance. 2. Modification of law 18-97 increase maximum loan amount. 3. Microfinance guarantee program launched by CCG (Feb 2019). PHINDIRITBL Strengthening Market infrastructure, product innovation and funding sources for microfinance: Number of alternative microfinance products developed and piloted (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3.00 3.00 3.00 Date 01-Dec-2012 10-Apr-2018 14-Mar-2019 30-Jun-2019 Comments 1. Microinsurance. 2. Work on participation of microfinance organizations in the category of non-bank payment service providers. There is one active 6/14/2019 Page 8 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) microfinance association that received a payment company license. More are expected to follow suit. 3. Possibility of MFIs to offer Islamic finance products through dedicated financing windows (article 61 of the banking law). PHINDIRITBL Strengthening market infrastructure, product innovation and funding sources for microfinance: Number of Trainings to Micro Entrepreneurs Delivered (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,697.00 4,141.00 1,100.00 Date 01-Dec-2012 10-Apr-2018 14-Mar-2019 30-Jun-2019 PHINDIRITBL Integrating Microfinance into a national financial inclusion strategy: Financial Inclusion Stock-Taking Completed (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N Y Y Y Date 01-Dec-2012 18-Aug-2017 14-Mar-2019 30-Jun-2019 Comments This indicator was met by the completion of an analytical report on the governance structure for the NFIS which was completed in July 2016. The main mission for this output was organized March 2016. PHINDIRITBL Microfinance into a national financial inclusion strategy: Evaluation Completed of Existing Financial Inclusion Integrating Measures (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N Y Y Y Date 01-Dec-2012 10-Apr-2018 14-Mar-2019 30-Jun-2019 Comments 6/14/2019 Page 9 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) This indicator was met by the two-day search conference the project financed May 22-23 2017 in addition to the completion of the Morocco findex survey (publication finalized Q3 2019). PHINDIRITBL IntegratingMicrofinance into a national financial inclusion strategy: Number of Beneficiaries Receiving Financial Literacy Training (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 6,000.00 15,655.00 15,655.00 14,000.00 Date 01-Dec-2012 10-Apr-2018 14-Mar-2019 01-Feb-2018 Comments 15,655 divided as follows: Centre Mohammed VI: - 1697 microentrepreneurs (3394 jours de formation/training days) - 786 trainings through collaboration with MFIs (1572 training days) - 2672 training through transversal modules (4761 training days) National Foundation for Financial Literacy: - 5,000 illiterate people trained - 1,900 artists - 3,600 agricultural workers Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P144500 TF-15084 Effective USD 4.90 4.90 0.00 2.59 2.31 53% 6/14/2019 Page 10 of 11 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Morocco Microfinance Development Project (P144500) Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P144500 TF-15084 Effective 25-Jul-2013 25-Jul-2013 25-Jul-2013 31-Jan-2018 30-Jun-2019 Cumulative Disbursements Restructuring History Level 2 Approved on 30-Jan-2018 Related Project(s) There are no related projects. 6/14/2019 Page 11 of 11 Public Disclosure Copy