Empowering Microfinance and Enterprises for Resilience and Growth Project (EMERGe) (P504220) Draft Stakeholder Engagement Plan (SEP) January 10th, 2024 Table of Contents Table of Contents ................................................................................................................................................2 Tables ..................................................................................................................................................................2 Acronyms and Abbreviations ..............................................................................................................................3 1. Introduction/Project Description ............................................................................................................4 2. Regulations and Requirements ...................................................................................................................7 3. Brief Summary of Previous Stakeholder Engagement Activities ................................................................7 4. Stakeholder Identification and Analysis..................................................................................................9 4.1. Affected Parties...................................................................................................................................4 4.2. Other Interested Parties .....................................................................................................................4 4.3. Disadvantaged / Vulnerable Individuals or Groups ............................................................................5 4.4. Summary of Project Stakeholder Needs .............................................................................................7 5. Stakeholder Engagement Program ....................................................................................................... 10 5.1. Purpose and Timing of Stakeholder Engagement Program ............................................................. 10 5.2. Proposed Strategy for Information Disclosure ................................................................................ 11 5.3. Proposed Strategy for Consultation................................................................................................. 15 5.4. Proposed Strategy to Incorporate the Views of Vulnerable Groups ............................................... 18 5.5. Timelines .......................................................................................................................................... 18 6. Resources and Responsibilities for implementing stakeholder engagement activities. .................. 19 7. Management Functions and Responsibilities ...................................................................................... 19 8. Grievance Redress Mechanism.............................................................................................................. 20 8.1. AKF’s Grievance Redress Mechanism .............................................................................................. 20 9. Monitoring and Reporting ..................................................................................................................... 25 9.1 Involvement of Relevant Stakeholders in Monitoring Activities ........................................................... 25 9.2 Reporting Back to Stakeholder Groups.................................................................................................. 25 Tables Table 1 Levels of Stakeholder engagement ........................................................................................................1 Table 2 Stakeholder needs..................................................................................................................................7 Table 3 Information Disclosure Strategy ......................................................................................................... 12 Table 4 Stakeholder Consultation Strategy ..................................................................................................... 16 2 Acronyms and Abbreviations ACGF Afghanistan Credit Guarantee Fund AKDN Aga Khan Development Network AKF Aga Khan Foundation AP Accelerate Prosperity AMA Afghanistan Microfinance Association CB Capacity Building CBCM Community-based Complains Mechanism CBI Community-Based Institutions CBSGs Community-based Savings Groups CDC Community Development Councils CIGs Common Interest Groups DDA District Development Assembly E&S Environmental and Social ECA Entry Criteria for Access EMERGe Empowering Microfinance and Enterprises for Resilience and Growth Project ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESS Environmental and Social Standard GRM Grievance Redressal Mechanism HH House Holds INGO International Non-Governmental Organization IP Implementing Partners ITA Interim Taliban Administration MAIL Ministry of Agriculture, Irrigation, and Livestock MEW Ministry of Energy and Water MFI Microfinance Institutions MFP Microfinance Provider MRRD Ministry of Rural Rehabilitation and Development MSMEs Medium Small and Micro Enterprises NEPA National Environmental Protection Agency NGO Non-Governmental Organization PAIL Provincial Agriculture, Irrigation, and Livestock PIU Project Implementation Unit PME Participatory and gender-sensitive monitoring PPA Participatory Poverty Assessment PPI Poverty Probability Index PRA Participatory Rural Appraisal PRA Participatory Rural Appraisal PRA Participatory Rural Appraisal SCA Swedish Committee for Afghanistan SDG Sustainable Development Goals SDGs Sustainable Development Goals SEP Stakeholder Engagement Plan SHG Self-Help Groups TA Technical Assistance WB World Bank 3 1. Introduction/Project Description The Afghanistan Empowering Microfinance and Enterprises for Resilience and Growth (EMERGe) aims to build sustainable solutions for developing both the demand for and supply of finance for micro and small enterprises in Afghanistan, prioritizing women's financial inclusion. Given the endemic poverty, undiversified economy, rampant informality, and the escalating uncertainties on the role of women in economic activity - efforts to support job creation (especially for women) in Afghanistan in the near to medium term need to be pragmatic, strategic, and focused. To this end, the project will bolster the stability of the microfinance sector by providing performance-based capital support grants (linked to sponsors own capital injections). Additionally, the operation will provide support to MFPs as they transition to Islamic Finance through Shariah compliant product development and operational capacity building. The project addresses gaps in access to finance, which disproportionally impact women. It also aims to improve economic agency and provide job opportunities to targeted female beneficiaries. The project aligns with the need to deliver to women and ensure the participation of women. Project Components: The project consists of two complementary components that will be implemented across 8 provinces in Afghanistan. The project will be implemented by the Aga Khan Foundation USA (AKF- US) and the AKF-USA will also engage AKF Afghanistan (AKF-A) and the Afghanistan Credit Guarantee Company (ACGF) as implementation partners by signing a Subsidiary Grant Agreement (SGA) with each. The Afghanistan Credit Guarantee Company ACGF will be responsible to implement Component 1 and the AKF-A will be responsible to implement Component 2 with the support of private sector companies if required. Component 1: Reviving Micro-Finance Providers (MFPs - US$10 million): The first component will strengthen the supply of finance to micro and small enterprises in Afghanistan by supporting the MFPs on two fronts. Firstly, performance-based Capital Support Grants (CSGs) will be provided to the 3 MFPs currently operating in Afghanistan. These are designed to clean the balance sheets of the MFPs with a legacy of Non- Performing Loans (NPLs), more specifically, NPLs that originated before August 2021. This will put the MFPs on the path to stability and sustainability. Secondly, to deepen the sector and to enhance its outreach, Technical Assistance (TA) to the MFPs and CAEDO will target the deployment of Shariah-compliant products, promote digitization, support operational capacity building, and so on. This component will be implemented by the Afghanistan Credit Guarantee Company (ACGF). Sub-Component 1(a): Capital Support Grants (CSGs, US$7 million): This sub-component will provide performance based CSGs to the MFPs to help build back their capital and clean their balance sheets. The amount of grants payable to each MFP has been agreed with each institution. It is determined based on their legacy portfolio and current capital position. The grants will be performance-based and contingent on the MFPs ensuring their institution is on a timebound recapitalization plan. In this regard, sponsors have committed to augmenting the CSGs with their own capital injections (US$18.1 million) and retained earnings over a 12-month period. The CSGs will also serve to bolster the liquidity of the MFPs. Targets have been set to ensure that significant amounts of new loans for women borrowers are also originated. All the mechanics of CSG disbursements — including linking grants to the MFP sponsor’s recapitalization commitments, performance standards and all related monitoring — will be part of the Project Operations Manual (POM). Sub-Component 1(b): Product Diversification and Deepening of Microcredit Sector (US$1.8 million): This sub-component will provide TA to the MFPs as they transition operationally to the Islamic finance model and 4 the provision of Shariah-compliant products. TA will also be provided to support lending to women and women-led businesses (through product development, staff training, and so on). Capacity building will be provided to MFPs to enhance operational efficiencies (including through the promotion of digitization and automation of processes where possible). Additionally, TA to operationalize the recently established CAEDO NGO will also be provided under this component. A detailed TA implementation plan will be included in the POM. Activities under this sub-component will also work closely with the International Finance Corporation (IFC) and other donors to build a consensus around a roadmap for the growth of the microfinance sector in Afghanistan, including identifying opportunities for greater World Bank and IFC collaboration as the transition to Approach 3.0 proceeds. Sub-Component 1(c): Component Management and Implementation Costs (US$1.2 million): This component will support the costs that the ACGF incurs to manage and oversee Component 1, including technical support, training, monitoring, and reporting. It will finance: (a) the direct project management and supervision costs required to support project implementation; (b) general management support and indirect costs and fees; and (c) project monitoring, evaluation, and coordination. Component 2: Building a Pipeline of Bankable Micro and Small Enterprises (US$6 million): This component will support the demand for credit among micro and small enterprises1 (including women-led enterprises or those which create jobs for women) by developing a pipeline of bankable enterprises and connecting them to the formal financial system (especially the MFPs under Component 1). This component will include: (i) business development services to firms; and (ii) the establishment of a credit viability fund. It will be implemented by the Aga Khan Foundation (AKF) United States through its Afghanistan office of Aga Khan Development Network (AKDN) in collaboration with the AKF’s teams of Accelerate Prosperity (AP) and the Aga Khan Cultural Services (AKCS). Sub-Component 2(a): Business Development Services (US$1.5 million): Leveraging the existing networks and programs of the implementing partner at both the micro and small enterprise level, this activity will support businesses in becoming more bankable by building capacity, enhancing firm-level productivity, and promoting entrepreneurship and financial literacy. This capacity building support will be structured around two existing programs of the implementing partner to ensure minimal cost overheads, as well as to ensure the operation leverages existing implementation channels in an otherwise complex operating environment. a. Capacity building of Small Enterprises for Credit Readiness (US$ 750, 000): This activity will provide technical and businesses development training to entrepreneurs and their employees (including existing and potential businesses) though the AKF’s Afghanistan Accelerator Program (AP). Small enterprises are defined in this context as firms that have 5-19 employees at the time they start the credit-readiness program. The AP program will provide incubation-level technical assistance to small firms, focusing on product development, marketing, financial modelling, pipeline development, and so on. The objective is for small start-ups to work toward formalization. Training will be provided to women-led firms or firms with demonstratable job creation for women. b. Capacity building of Microenterprises for Credit Readiness (US$750, 000): The key objective of this activity is to facilitate the graduation of women-led microenterprises from informal savings groups to accessing formal channels of credit. The engagement will work through an existing network of 5,290 community-based savings groups (CBSGs) across 8 provinces in Afghanistan. These CBSGs are small and informal associations of 10-20 male and female volunteers from rural communities that are mostly active in agriculture value chains, the handicrafts sector, small-scale manufacturing, and so on. Although many of the CBSGs have now transitioned to clusters of micro- 5 enterprises (with 1-4 employees), they are still not connected to the formal financial sector. As such, they continue to rely on communal savings for ongoing business investments. This activity will provide capacity-building training through clusters, but it shall be done at the enterprise level. Training will focus on financial literacy, business planning, budgeting, marketing, and so on. The training will be provided through the existing trainer network of the AGCS, and it will focus on women-led micro enterprises. Sub-Component 2(b): Credit Viability Fund (US$3.6 million): A Credit Viability Fund (CVF) will be established to help ensure that eligible credit-ready micro and small enterprises (from Component 2a) can access formal financial channels, especially as they begin to (re)build their businesses. Even with the provision of credit readiness support, the ability of micro and small enterprises to access affordable credit will remain a challenge in the current economic and political environment in Afghanistan. When credit is available, it is generally not on terms that are affordable for (especially micro and small) businesses operating in a very fragile context. As such, this CVF will work to ease collateral requirements and/or provide pricing discounts to eligible credit-ready firms without the MFPs having to ease their lending standards. Additionally, the appetite to lend to women is dampened by the restrictions placed on their mobility, as well as the general political uncertainty about women’s economic activities. To this end, the CVF will also de-risk female borrowers from any ITA edict which impacts their ability to work and thus service their loans. As such, to ensure the MFPs continue to lend to women, in the event of a publicly verifiable event that curtails a female borrower’s ability to service her loan, the CVF will make payments on her behalf. This is designed to ensure that women are not excluded from borrowing and that the portfolios of the MFPs are protected from such political developments. This differs from a guarantee instrument in that it also protects the credit history of the borrower (thus, it is more like an insurance instrument). The project will involve and/or affect directly or indirectly, a vast and diverse number of stakeholders at the individual, community, provincial, regional, and national level in the context of a severe political, economic, social, and humanitarian crisis in Afghanistan. The World Bank’s Environmental and Social Standard 102 recognizes the importance of open and transparent engagement with all project stakeholders, based on the recognition that effective stakeholder engagement can improve E&S sustainability of project activities, enhance project acceptance, and implementation, and allow stakeholders to contribute to project design. This SEP outlines stakeholder engagements for the project activities in a systematic way. It defines legal and policy requirements regarding stakeholder engagements, lists stakeholder engagements that have already been undertaken, provides a stakeholder analysis of all relevant project-affected parties, including members of MFPs and their borrowers (both existing and future), as well as micro and small enterprises particular emphasis on women-owned businesses, community-based saving groups CBSGs and cluster, and lays out the means of dissemination of information to different parties as well as means and ways to continue to consult different stakeholder groups throughout the project cycle. Furthermore, it contains a monitoring plan for the implementation of the SEP. The SEP will be implemented by AKF-A, ACGF and all other relevant implementers. Both AKF, ACGF and other implementing partners will each implement Grievance Redressal Mechanism (GRM) and will be responsible for handling all project-related grievances, as described in this SEP. This SEP will apply to all components of the project. It aims at facilitating stakeholder engagement throughout the Project’s life cycle and across the various project components. 2 The World Bank, Environmental and Social Framework (ESF), 2018. 6 The objectives of this SEP are: • To identify project stakeholders, including members of community base saving groups CBSGs and cluster, MFPs and their borrowers (both existing and future), as well as micro and small enterprises particular emphasis on women-owned businesses, their priorities, and concerns. • Identify strategies for information sharing and communication to stakeholders as well as consultation of stakeholders in ways that are meaningful and accessible throughout the project cycle. • To specify procedures and methodologies for stakeholder consultations, documentation of the proceedings and strategies for feedback. • To establish an effective, transparent, and responsive grievance redress mechanism for the project. • To develop a strategy for inclusive and meaningful stakeholder participation in the monitoring of project impacts, documenting, reporting and dissemination of results among the different stakeholders. 2. Regulations and Requirements Stakeholder engagement is an inclusive process conducted throughout the project life cycle to support the development of strong, constructive, and responsive relationships that are important for successfully managing a project’s environmental and social risks. The World Bank’s Environmental and Social Framework (ESF) includes Environmental and Social Standard (ESS) 9 and 10, “Financial Intermediaries� and “Stakeholder Engagement and Information Disclosure�, which recognizes “the importance of open and transparent engagement with the project stakeholders as an essential element of good international practice�. The ESS10 also provides that effective stakeholder engagement can significantly improve the environmental and social sustainability of projects, enhance project acceptance, and make a significant contribution to successful project design and implementation. The application of these standards, by focusing on the identification and management of environmental and social risks and Financial Intermediaries, will support recipients in their goal to reduce poverty and increase prosperity in a sustainable manner for the benefit of the environment and their citizens. The standards will: a. support recipients in achieving good international practice relating to environmental and social sustainability. b. enhance and create jobs opportunities/employments at the community level. c. improved new created MFPs, micro enterprise and entrepreneur and it increased their local products. d. create and support the facilities for community local products. e. increased the beneficiary’s income generation and reduced the poverty as well. f. Support and assist recipients in fulfilling their national and international environmental and social obligations. g. enhance non-discrimination, transparency, participation, accountability, and governance; and h. enhance the sustainable development outcomes of projects through ongoing stakeholder engagement. Stakeholder engagement is also provided for in the various forms of national legislation including the constitutions, Islamic Banking regulations, and legislation on environmental and social impact assessments and audits. The instruments unanimously advocate for meaningful involvement of project stakeholders in decisions that affect them, participatory planning, and trans-parent grievance management mechanisms. 3. Brief Summary of Previous Stakeholder Engagement Activities For now most of the stakeholder meetings and engagements have revolved around AKF, ACGF, AKCS and the World Bank in pursuit of designing the project. The initial set of meetings focused on a broad-based 7 private sector support which included matching grants, investments in enabling infrastructure and so on. AKF held several meetings and workshops aimed at scanning the private sector situation in the country and relating best case scenarios and solutions. AKF-ACGF also held several bilateral meetings to find an amicable and strong partnership to strengthen women-led businesses. Given that engagement with the Interim Taliban Administration is not possible, no further consultations have taken place. In-depth stakeholder consultations will be conducted after the Effectiveness Date, and the SEP will be updated accordingly by AKF and ACGF as relevant. Details about the meetings and consultations held with stakeholders are presented below. Table 1. Previous Stakeholder Consultations Place Month Participants Key points raised Online July 2022 National and � Regional consultation within AKF provincial Regional AKF stakeholders about the management o SME development [CEO, Program o Access to finance Director, Regional o Market infrastructure Director, National o Vocational and professional trainings and regional sector lead (EI, AFS, Infrastructure and MERL, & Sector Lead Online Sep 2022 National and � Finalizing the targets in potential sectors with Regional AKF AKF internal stakeholders management & o SME development Sector lead o Access to finance o Market Infrastructure Online August 2023 AKF USA, AKF � Discussion on proposed implementation Afghanistan structure, project implementation unit between AKF USA and AKF Afghanistan Online Multiple AKF Afghanistan, � Project design engagement AKF Geneva � Implementation structure from June AKF USA � Project document 2022 to September 2023 Upcoming AKF Afghanistan Registration of project and MOU with Ministry of and Ministry of Commerce Economy, ministry Introduction of project to Provincial Governor, Commerce, directorate of economy, commerce, and district provincial governor Governor, 8 directorate of Economy, Commerce, district Governor 4. Stakeholder Identification and Analysis For this project stakeholders are defined as individuals, formal or informal associations/ organizations, private and public entities whose interests or rights will be affected, directly or indirectly by the project, both positively and negatively, who may have an interest, and who have the potential to influence the project outcomes in any way. The following matrix and diagram illustrate different levels of stakeholder engagement and interest in the project. 9 Table 1 Levels of Stakeholder engagement Stakeholder Primary Secondary Stakeholders interest in project Potential Level of (1st) (2nd) interest on proposed project (high/medium/low) Interim Taliban x Private sector development is of great interest to the ITA at all levels; therefore, given High Administration (ITA) the scope of the project and based on recent experience implementing similar projects (Ministries and involving matching grants, credit facilities etc, the ITA will likely be interested in being Directorates)-national level frequently appraised of progress. ITA provincial and district x The ITA authorities at both provincial and district level are likely to have significant High authorities interest as subprojects start rolling out. Community Based Saving x Strong interest in project and implementation including ownership and monitoring High Groups (CBSGs) aspects. Community Development x The elected member/s of CDCs are of a rural community under the existing CDC, which High Councils (CDCs) is headed by a community leader. They are democratically elected by all village residents. They are closely linked with community-based savings groups so they will naturally be interested in capacity building and internal lending mechanism and technical training for CBSG clusters. Women’s Groups (e.g., x Strong interest in being Consulted and or/engaging in the implementation of High Community-Based Savings microfinance project activities. Groups) Afghanistan Women x AWCCI holds annual exhibitions for women-led businesses and also advocates policies Chamber of Commerce and for private sector development. They will have significant interest in the CVF and other Industry (AWCCI) instruments. Non-Agriculture x Strong interest in being consulted and or/engaging in the implementation of project High Cooperatives activities. Women and Girls x A household workers women and girls will have great interest in the microfinance High services related projects, and finding employment through the project Unemployed People x Strong interest in seeking employment opportunities. Low Persons with Disabilities x Strong interest in seeking employment opportunities and benefitting from project Medium (PWDs) activities. Strong interest in accessing microfinance services. Internally Displaced Persons x Some interest in finding benefited groups of the projects. Strong interest in accessing Low (IDPs) microfinance products. Ethnic and Religious x They may articulate their concerns and convey that they are being marginalized or Medium Minorities they have not been properly represented etc. The project may receive grievances from ethnic and religious minorities. Female-Headed Households x They are often marginalized and sidelined from public services. They will have a High positive interest in microfinance and working with enterprises’ projects. Academia/Researchers x For microfinance and enterprise services and dialogue. Medium Pastoral Nomadic x For microfinance and enterprise services. Medium Communities Residents, business entities x These will be directly affected parties and obviously will have significant interest in the High such as MSMEs, small success of the project. products entrepreneur, and individual entrepreneurs in the project that can be affected or can benefit from employment opportunities. MISFA Microfinance x They may articulate their concerns and convey that they are being marginalized or Low Investment Support Facility they have not been properly represented etc. The project may need some technical for Afghanistan inputs from MISFA. MSMEs Micro, Small, and x The MSMEs will be directly affected parties and obviously will have significant interest High Medium Enterprises in the success of the project. AMA Afghanistan Micro x Highly interest in project technical supporting and implementation as AMA vision is to High Finance Association promote financial inclusion through creation of an enabling environment for the development finance sector. WB World Bank x Highly interest in technically, supporting for the successfully implementation of project High DAB Da Afghanistan Bank x has interest for facilitating the microfinance services project implementation. Medium ETN Entrepreneur x Strong interest in being Consulted and or/engaging in the implementation of High (Enterprise holder) microfinance project activities. MFIs Micro Finance x They have much interested in the MF implementing particularly and technically. Medium Institutions 2 Interim Taliban Administration (ITA) (Ministries, Directorates) MFPs MFIs supporting Public/Private MSMEs Potential Other Actors Stakeholders Civil Society Organizations as Relevant /NGOs Business Community Development Base Saving Service Groups CBSGs Providers(BDSPs) 3 In accordance with the ESS10, this SEP categorizes the stakeholders into three groups: � affected parties - stakeholders that are affected or may be affected by the project. � other interested parties - other parties who may have an interest in the project. � vulnerable/ disadvantaged groups - individuals or groups who may require special engagement efforts due to their vulnerable status. 4.1. Affected Parties The EMERGe will have multiple stakeholders ranging from the Interim Taliban Administration (ITA), which will be engaged indirectly, to the private sector, academia, civil society (including CDCs, CBSGs and women groups), and the public. AKF and where applicable ACGF will ensure that consultations are held with all relevant stakeholders directly bearing upon project outcomes. For the purposes of their engagement, stakeholders who are likely to be directly affected, and involved in the implementation of the project are classified as Affected Parties. The stakeholders below are classified under each component. For Component 1 (a, b and c) the following will be affected parties: - Da Afghanistan Bank, AIIB, Scheduled Banks - Microfinance Providers - Business entities such as MSMEs, small products entrepreneurs, and individual entrepreneurs which can be affected or can benefit from employment opportunities. - Business Development Services leveraging the existing networks and programs of the implementing partner at both the micro and small enterprise level. For project component 2, the following will be directly affected parties: - Community Base Saving Groups CBSGs - Business Member Organizations (BMOs) - Afghanistan Women Chamber of Commerce and Industry (AWCCI) - Business Development Service Providers (BDSPs) - Community representatives and Community Development Councils (CDCs) - Trainees’ parents/families - Kabul Historic Garden Trust - Ministry of Labor and Social Affairs - Workshop/business Owners - 4.2. Other Interested Parties The complex community landscape dictates that there will be individuals, associations or even private companies with vested interests overshadowing or influencing the project in ways that may or may not positively impact project outcomes. As such the project’s stakeholders would include parties other than those directly affected. These include: - Civil society groups and NGOs on the regional, national, and local levels, that pursue or are engaged in microfinance services interests and may become partners of the project. - MFPs of services and products within the project area that will be involved in the project’s wider services providers or may be considered for the role of the project’s services providers. 4 - Local conservation organizations and environmental activists - Mass media and associated interest groups, including local, regional, and national print and broadcast media, digital/web-based entities, and their associations. - Community-based organizations, including Community Development Councils (CDCs) and Women’s Groups. Engagement with ITA: Interactions with the ITA will be limited to coordination and accessing the beneficiaries. Coordination entails participation in relevant Bank (Islamic commercial Bank Murabaha), NGO coordination forums, sharing higher-level information about the project plan and intended outcomes, and consultation on technical matters that require input. Access to beneficiaries requires adherence to the local regulations, including registration of the project to the Ministry of Economy, provision of biannual progress reports, exchanging letters of approval with relevant line ministries, participating in the provincial development committee meetings, compliance with tax regulations, and working closely with the district authorities on the implementation. These measures are complemented by higher level interactions at the policy level by the AKF Regional Directors, CEO, and the AKDN’s special envoy to Afghanistan. Managerial and technical may require that ministry staff participating in project activities will be vetted and no form of compensation will be provided. 4.3. Disadvantaged / Vulnerable Individuals or Groups Given the diversity of ethnic and linguistic groups across Afghanistan there are always situations where various groups of people are excluded or in many instances represented disproportionately. Socially excluded groups often lack voice and the power to influence decisions and to express their concerns or understand the impacts of a project. The Project will aim to include all stakeholders and ensure not only diverse representation but meaningful participation/ engagement, particularly of disadvantaged/vulnerable individuals or groups. This value is articulated in the ESF, as well as in AKDN’s Ethical Framework which binds AKF programs and provides an anchor for advancing social engagement agendas. The following disadvantaged and vulnerable groups have been identified for this project. - Persons living below the poverty line /ultra-poor households. - Internally displaced persons (IDPs), and returnees - Persons with Disabilities (PWD) - The population living in hard-to-reach places. - Elderly People - Pastoral Nomadic Communities - Women and girls that haven’t financial security - Beneficiary/householders that can’t be repaid. Vulnerability can be exacerbated by compounding intersecting factors, such as a person’s origin, gender, age, health condition, economic deficiency and financial insecurity, disadvantaged status in the community (e.g., minorities or fringe groups), dependence on other individuals or natural resources, etc. Women are considered one of the most vulnerable groups in Afghanistan. They often face multiple levels of discrimination – as rural women, widows, disabled women, internally displaced women, etc. Overall, vulnerability of different groups has exacerbated since the loss of livelihoods in the wake of the regime change in August 2021. The World Bank offers a unique combination of global expertise and customized instruments to address the immediate financing and TA needs of the financial and private sector in fragile and vulnerable economies. The discussions with the private and financial sector stakeholders, World Bank surveys (Welfare Monitoring, Gender Monitoring, and Private Sector) and research of the development partners substantiate 5 that any meaningful recovery for Afghanistan will require measures to support the continued resilience and growth of the financial and private sectors. The World Bank Group’s FCV Strategy recognizes the critical role of partnerships in operationalizing support in FCV settings. Guided by this strategy, the World Bank will build its partnerships based on respective complementarities and comparative advantages. The extensive knowledge of the Bank regarding the key players in Afghanistan is based on its prior engagement. This knowledge has contributed to the identification of key implementation agencies and partners. The critical nature of an effective presence on the ground is vital to delivering results in FCV settings. Thus, the trust built with the AKF-USA and the ACGF over time will prove helpful in the current country context. The AKF and ACGF have had a continued presence in Afghanistan since the 2021 crisis. This will allow the project to leverage existing implementation capacity and relationships in Afghanistan. AKF has been implementing this exercise and is accordingly very familiar with who is vulnerable and how to reach different groups. implementing partners will deploy similar methods. Furthermore, engagement and feedback mechanisms for disadvantaged / vulnerable individuals or groups will be facilitated through the various engagement forums that will be established during the project (see section below). In addition, AKF often engages women groups, such as Community-Based Savings Groups, as a critical entry point to consult vulnerable women at various stages of a project e.g., project design, community management of microfinance services to ensure sustainability, dissemination of key messaging. AKF and ACGF will conduct a gender analysis at the onset of the project including consultations with women, men, community/religious leaders, and CSOs, to ensure that the unique experiences and needs of women are amply considered and addressed in the project design, implementation, and monitoring and evaluation. 6 4.4. Summary of Project Stakeholder Needs Table 2 Stakeholder needs Community Stakeholder Group Key Characteristics Language needs Preferred notification means (email, radio, phone, letter) Provincial Beneficiaries/ Communities in the PWDs are particularly Pashto/Dari and Email, internet, Level vicinity of the project’s planned marginalized in local languages as radio, mobile activities. Afghanistan. The PWD relevant in areas phone, social are more likely to be where the majority media, and Residents, business entities such as excluded from speak to them. individual MSMEs, small product participation and meetings entrepreneurs, and individual benefit from public entrepreneurs in the project can be services. affected or can benefit from employment opportunities. Government and local authorities play a Residents of the other rural crucial role in communities in the project area, stakeholder who benefit from entrepreneurs’ engagement through products and training opportunities various strategies for other rural communities. aimed at fostering collaboration, Project direct beneficiaries. transparency, and community involvement ITA Provincial and District Authorities ETN Entrepreneur (Enterprise Enterprise Holders and holder) NACs are committed to facilitating the Non-Agricultural Cooperatives execution of AKF's programs, thereby Community Development Councils strengthening project (CDCs) implementation and promoting specific Community-Based Saving Groups objectives. CBSGs CDCs and community- Women’s Groups (e.g., Community- based organizations Based Savings Groups) are well-capacitated community platforms with experience in prioritization and consultations. 7 Community Stakeholder Group Key Characteristics Language needs Preferred notification means (email, radio, phone, letter) Persons living below the poverty Almost 70 percent of Pashto/Dari and/or Community line. the rural population the local languages radio, depends on in areas where the telephone, IDP and returnees agriculture. Crops are majority speaks to women group mainly rain-fed, which them. meetings, notice Elderly People makes agriculture a boards Pastoral Nomadic Communities vulnerable livelihood. Livestock levels have Women’s Groups fluctuated due to droughts. Generally, Female-headed households droughts as well as flooding, and years of Unemployed people protracted conflict have resulted in high Ethnic and religious minorities levels of poverty in rural households. Persons with Disabilities (PWD) Urban growth has significantly increased in Afghanistan over the last couple of decades. In 2020, the WB recorded 3.4 percent of urban growth. The urban population accounted for over 10 million people in the country. This has come along with increased poverty, with many urban poor households living in slums due to disorganized urban growth. Afghanistan is made up of various ethnic and religious groups, with a number of ethnic and religious minorities living in precarious conditions post takeover of Afghanistan by the 8 Community Stakeholder Group Key Characteristics Language needs Preferred notification means (email, radio, phone, letter) Taliban in August 2021. These groups usually comprise individuals with a low level of education who are reluctant to participate in consultations. Vulnerable Communities Vulnerable and little Pashto/Dari and/or Community access to assistance, the local languages radio, highly food insecure, in areas where the community and with an emergency majority speaks to meetings, notice livelihood coping index. them. boards, and community mobilizers to reach out Community Leaders and Members Their authority will Pashto/Dari and/or Community depend on the the local languages meetings, presence and strength in areas where the individual of community leaders majority speaks to meetings, notice of other groups; them. boards, social leaders can have a media, significant influence on community the communities radio, TV Regional Interim Taliban Administration (ITA) Government and local Pashto/Dari and/or Community Level (Ministries and Directorates)- authorities play a the local languages meetings, national level crucial role in in areas where the individual stakeholder majority speaks to meetings, notice Contractors and Local Partners engagement through them. boards, social Suppliers various strategies media, aimed at fostering community collaboration, radio, TV transparency, and community involvement 9 Community Stakeholder Group Key Characteristics Language needs Preferred notification means (email, radio, phone, letter) National UN agencies, international NGOs, Established UN, NGO, English Internet/email, Level bilateral donors and donor coordination ACBAR, UNCT mechanisms, including ACBAR National CSOs, NGOs, Good capacity English Internet/email, individual Academia and Researchers meetings, telephone Other Agencies operating at national Good capacity English Internet/email, level individual meetings, telephone 5. Stakeholder Engagement Program 5.1. Purpose and Timing of Stakeholder Engagement Program The overall objective is to define a program for stakeholder engagement, including public information disclosure and consultation, throughout the inception, microfinance services, and operation phase of the proposed subprojects. The SEP outlines the ways in which the implementing agencies/MFPs will communicate with stakeholders and includes a mechanism by which people can raise concerns and provide feedback about the Implementing Agencies/MFPs. The SEP will facilitate communications and ensure fruitful interactions between the implementers of a sub-project e.g., microfinance services, etc., and its stakeholders, including beneficiaries. The detailed objectives of the SEP are summarized as follows: � Outline the stakeholder engagement activities of the project in line with the World Bank ESS10. � Define roles and responsibilities for the implementation of the SEP. � Identify key stakeholders that are affected, interested, and/or able to influence the project. � Guide implementing partners, and sub-project MFPs to build mutually respectful, beneficial, and lasting relationships with stakeholders, particularly beneficiary communities. � Provide guidance for stakeholder engagement, including the timing and methods of engagement with stakeholders throughout the life cycle of the project. � Describe the measures that will be used to remove obstacles to participation, and how the views of differently affected groups will be captured. 10 � Identify effective ways and methods to disseminate project information as per the needs of the stakeholders. � Establishment of grievance redress committee GRC at the targeted project area. The implementing partners will involve stakeholders as early as possible and will continue their engagement process throughout the life cycle of the project including planning, beneficiary selection process via approved criteria, implementation and monitoring and evaluation. The dialogues and exchange of information will continue until each project (Microfinance Services), proper tracking/monitoring system will be followed as per the agreement via MFPs. The engagement process will seek to promote local buy-in for the project activities and ensure that stakeholder concerns, feedback and suggestions are properly received and addressed, and MFPs expectations regarding microfinance services are managed. Continuous dialogues with stakeholders will contribute to reducing conflict and minimize misunderstanding with regards to the project interventions. 5.2. Proposed Strategy for Information Disclosure Implementing partners (MFPs) will build on their pre-existing knowledge of the MFIs (Microfinance Institutions) networks, and relationships to advance constructive engagements for the project. They will also draw upon various tools and approaches which are contextually relevant as part of our continuous interaction with the MFIs and other relevant stakeholders. Experience demonstrates that methods used for disseminating information to statutory officials may be different from the format of providing information to MFIs on technical aspects. Therefore, for the information dissemination process to be effective and meaningful, implementing partners/MFPs will adapt techniques that are specifically tailored to the identified stakeholder groups. Generally, the format of information dissemination seeks to meet basic requirements on accessibility, i.e. information will be provided at venues that are easily reachable and do not require long commutes, entrance fee or preliminary access authorization, cultural appropriateness (i.e. with due respect to the local customs and current norms including gender segregation), and inclusiveness, i.e. engaging all segments of the local society, including women and girls, people with disabilities, the elderly, minorities, and other vulnerable individuals. Implementing partners/MFPs will seek to raise the communities’ and stakeholders’ awareness about the planned and current activities of the project. If necessary, logistical assistance may be provided to enable participants from remote areas, persons with limited physical abilities, and those with insufficient financial or transportation means to attend public meetings scheduled by the project. 11 Table 3 Information Disclosure Strategy Project Stage List of information Methods proposed Timelines: locations Target Stakeholders % of target Responsibilities to be disclosed / dates population reached Project Design SEP (incl. GRM), ESCP Internet/email, Virtual / Kabul National-level stakeholders 50% AKF’s PIUs individual meetings, (UN agencies, int. NGOs, telephone Prior to project bilateral donors, private sector approval. companies, academia) MFPs/MFIs meetings, Regional capitals / Regional-level stakeholders 20% AKF’s PIUs individual meetings, Kabul (NGO Network – ACBAR) notice boards, social media, community 3 weeks after Effective radio, TV Date Public meetings At the project Provincial-level stakeholders 10% AKF’s PIUs Email, internet, radio, targeted areas (MFPs) (beneficiary communities, mobile phone, social disadvantaged/vulnerable media 3 weeks after Effective groups – persons living below Date the poverty line, IDPs and returnees, elderly people, pastoral nomadic communities, ethnic and religious minorities, women, PWD, residents, business entities ) Community radio, At project area level MFPs 10% AKF’s PIUs telephone, women group meetings, 3 weeks after Effective notice boards Date Other relevant project Internet/email, Virtual / Kabul National-level stakeholders 20% AKF’s PIUs documents and individual meetings, (UN agencies, int. NGOs, information telephone 3 weeks after Effective bilateral donors, private sector Date companies, academia) MFPs/MFIs meetings, Regional capitals / Regional-level stakeholders 20% AKF’s PIUs individual meetings, Kabul (NGO Network – ACBAR, etc)) notice boards, social media, community 3 weeks after Effective radio, TV Date Public meetings At the project Provincial-level stakeholders 10% AKF’s PIUs targeted areas (MFPs) (beneficiary communities, disadvantaged/vulnerable 12 Email, internet, radio, 3 weeks after Effective groups – persons living below mobile phone, social Date the poverty line, IDPs and media returnees, elderly people, pastoral nomadic communities, ethnic and religious minorities, women, PWD, residents, business entities, etc)) Community radio, At the project Provincial-level stakeholders 10% AKF’s PIUs telephone, women targeted areas (MFPs) MFPs/MFIS/ Community group meetings, Based Saving Group CBSGs notice boards 3 weeks after Effective Date Project Activity – or site Internet/email, Continuous National-level stakeholders 50% AKF’s PIUs Implementation specific ESMPs or individual meetings, (UN agencies, int. NGOs, other site-specific E&S telephone bilateral donors, private sector instruments companies, academia) MFPs/MFIs meetings, Continuous Regional-level stakeholders 20% AKF’s PIUs individual meetings, (NGO Network – ACBAR, etc)) notice boards, social media, community radio, TV Public meetings Continuous Provincial-level stakeholders 10% AKF’s PIUs Email, internet, radio, (beneficiary communities, mobile phone, social disadvantaged/vulnerable media groups – persons living below the poverty line, IDPs and returnees, elderly people, pastoral nomadic communities, ethnic and religious minorities, women, PWD, residents, business entities) Community radio, Continuous Provincial-level stakeholders 10% AKF’s PIUs telephone, women MFPs/ Saving MFIS/ group meetings, Community Based Group notice boards CBSGs Any project-related Internet/email, Continuous National-level stakeholders 50% AKF’s PIUs information (on individual meetings, (UN agencies, int. NGOs, activities, beneficiary telephone bilateral donors, private sector selection etc…) companies, academia, etc)) MFPs/MFIs meetings, Continuous Regional-level stakeholders 20% AKF’s PIUs individual meetings, (NGO Network – ACBAR, etc)) 13 notice boards, social media, community radio, TV Public meetings Continuous Provincial-level stakeholders 10% AKF’s PIUs Email, internet, radio, (beneficiary communities, mobile phone, social disadvantaged/vulnerable media groups – persons living below the poverty line, IDPs and returnees, elderly people, pastoral nomadic communities, ethnic and religious minorities, women, PWD, residents, business entities) Community radio, Continuous Provincial-level stakeholders 10% AKF’s PIUs telephone, women MFPs/ Saving MFIS/ group meetings, Community Based Group notice boards CBSGs GRM Internet/email, Continuous National-level stakeholders 50% AKF’s PIUs individual meetings, (UN agencies, int. NGOs, telephone bilateral donors, private sector companies, academia, etc) MFPs/MFIs meetings, Continuous Regional-level stakeholders 20% AKF’s PIUs individual meetings, (NGO Network – ACBAR, etc) notice boards, social media, community radio, TV Public meetings Continuous Provincial-level stakeholders 10% AKF’s PIUs Email, internet, radio, (beneficiary communities, mobile phone, social disadvantaged/vulnerable media groups – persons living below the poverty line, IDPs and returnees, elderly people, pastoral nomadic communities, ethnic and religious minorities, women, PWD, residents, business entities) Community radio, Continuous Provincial-level stakeholders 10% AKF’s PIUs telephone, women MFPs/ Saving MFIS/ group meetings, Community Based Group notice boards CBSGs 14 5.3. Proposed Strategy for Consultation Implementing partners/MFPs will deploy a variety of engagement techniques to build relationships with stakeholders and to consult all relevant MFIs and stakeholders. The following set of consultation techniques will be utilized and adapted to broaden consultations of the stakeholders. Efforts will be made to implore public feedback through pre-existing MFPs/MFIs structures, such as AMA where MFIs have grown comfortable providing feedback. This feedback can subsequently be used as input into the project’s mitigation and enhancement measures. As discussed above, proper consideration will be given to the MFPs and MFIs and inclusiveness of the consultation environments, as well as to gender and other sensitivities that may prevail in the local community. In addition to stakeholder consultations that will accompany the project throughout all phases, the team will prepare a rapid gender analysis (RGA), which will include primary data collection consisting of consultations with women, men, community/religious leaders, and other key stakeholders to examine contextual needs of women and girls, men and boys, across intersecting factors, such as ability, marital status, ethnicity, geographies, and other identities. The findings of the RGA will identify key gender gaps, which will be used to inform the Gender Equality Strategy (GES). The GES will outline key gender equality principles, priorities, and gender smart solutions to enhance equitable access and improve Microfinance Services and practices, to, in turn, strengthen the project’s overall objective of improving access to microfinance services in project targeted areas. Frequent consultations with the MFPs and other relevant stakeholders will be organized throughout the implementation of the EMERGe project. In particular, public consultations will be organized to consult relevant stakeholders about their needs and the project activities, as well as potential environmental and social risks and impacts and planned mitigation measures – of the entire project and of specific subprojects. Moreover, public consultations will be held on an ongoing basis as part of the overall citizen engagement process during the project cycle. All implementing partners/MFPs will record and document minutes of these MFPs meetings, both for the purposes of transparency and the accuracy of capturing MFPs/MFIs and relevant stakeholders comments. These will serve used as a record of consent or input. The following methods of meeting documentation will be used: - taking written minutes of the meeting by a specially assigned person - taking attendance of participants and their signatures/thumbprint as a record and proof of the meeting and their consent on a certain agreement (disaggregated by gender, age, type). - audio recording with consent (e.g., by means of voice recorders). - Photographing with consent. 15 Table 4 Stakeholder Consultation Strategy Project stage Topic of consultation Suggested Method Location and Date Target stakeholders Responsibilities Project Design Overall Project activities and Email, individual meetings, Kabul National-level stakeholders (UN AKF PIU E&S risks and impacts telephone agencies, int. NGOs, bilateral During Project inception donors, private sector companies, Beneficiary selection method phase academia) MFPs/MFIs meetings, individual Regional capitals Regional-level stakeholders (NGO AKF PIU meetings, notice boards, social Network – ACBAR, etc) media, community radio, TV During Project inception phase MFPs/MFIs meetings, individual Provincial-level stakeholders AKF PIU meetings, notice boards, social Provincial-level (beneficiary communities, media, community radio, TV stakeholders MFPs/ Saving disadvantaged/vulnerable groups MFIS/ Community Based – persons living below the poverty Group CBSGs line, IDPs and returnees, elderly people, pastoral nomadic During Project inception communities, ethnic and religious phase minorities, women, PWD, residents, business entities) MFPs meetings, mobile phone, Provincial-level Provincial-level stakeholders AKF PIU social media, and individual stakeholders MFPs/ Saving Community Based Saving Group meetings, CBSGs MFIS/ Community Based CBSGs, MFPs) Group CBSGs During Project inception phase Project Community infrastructure Email, individual meetings, Kabul National-level stakeholders (UN AKF PIU Implementation workplans, prioritization telephone agencies, int. NGOs, bilateral exercises Prior to commencement of donors, private sector companies, microfinance enterprises, academia, etc) MFPs, MFIs and AMA Community meetings, individual Regional capitals Regional-level stakeholders (NGO AKF PIU meetings, social media Network – ACBAR, etc) MFPs/MFIs meetings, individual Prior to commencement of meetings, notice boards, social microfinance enterprises, media, community radio, TV MFPs, MFIs and AMA MFPs/MFIs meetings, individual Provincial-level Provincial-level stakeholders AKF PIU meetings, notice boards, social stakeholders MFPs/ Saving (beneficiary communities, media, CBSGs MFIS/ Community Based disadvantaged/vulnerable groups Group CBSGs – persons living below the poverty 16 line, IDPs and returnees, elderly Prior to commencement of people, pastoral nomadic microfinance enterprises, communities, ethnic and religious MFPs, MFIs and AMA minorities, women, PWD, residents, business entities) MFPs meetings, mobile phone, Provincial-level User Associations, Community AKF PIU social media, and individual stakeholders MFPs/ Saving Based Saving Group CBSGs, MFPs) meetings, CBSGs MFIS/ Community Based Group CBSGs Prior to commencement of microfinance enterprises, MFPs, MFIs and AMA Sub-Project Specific ESMPs Email, individual meetings, Kabul National-level stakeholders (UN AKF PIU telephone agencies, int. NGOs, bilateral Sub-project specific E&S risks Prior to commencement of donors, private sector companies, and impacts and mitigation microfinance enterprises, academia) measures MFPs, MFIs and AMA MFPs/MFIs meetings, individual Regional capitals Regional-level stakeholders (NGO AKF PIU meetings, notice boards, social Network – ACBAR, etc) media, community radio, TV Prior to commencement of microfinance enterprises, MFPs, MFIs and AMA MFPs meetings, individual Provincial-level Provincial-level stakeholders AKF PIU meetings, social media, CBSGs stakeholders MFPs/ Saving (beneficiary communities, MFPs/MFIs meetings, individual MFIS/ Community Based disadvantaged/vulnerable groups meetings, notice boards, social Group CBSGs – persons living below the poverty media, community radio, TV line, IDPs and returnees, elderly Prior to commencement of people, pastoral nomadic microfinance enterprises, communities, ethnic and religious MFPs, MFIs and AMA minorities, women, PWD, residents, business entities) MFPs meetings, mobile phone, Provincial-level User Associations, Community AKF PIU social media, and individual stakeholders MFPs/ Saving Based Saving Group CBSGs and meetings, CBSGs MFIS/ Community Based MFPs) Group CBSGs Prior to commencement of microfinance enterprises, MFPs, MFIs and AMA 17 5.4. Proposed Strategy to Incorporate the Views of Vulnerable Groups Engagement with vulnerable groups and individuals often requires the application of specific measures and assistance aimed at the facilitation of their participation in the project-related decision-making so that their awareness of and input to the overall process are commensurate to those of the other stakeholders. This includes addressing barriers which prevent vulnerable groups from participating. For example, ensuring that activities are scheduled at a time of day in which all groups are available (ex. women who have domestic work in the early morning would likely be better able to attend in the afternoon, to be determined in consultations). The project team will ensure that disadvantaged/ vulnerable individuals or groups are appropriately identified, made aware of project activities, and have opportunities to provide propositions/suggestions. Consultations using relevant stakeholders/partners as an appropriate tool for the engagement of vulnerable groups will be carried out with representatives of people with disabilities, women, minorities, and marginalized ethnic groups. The relevant stakeholders/partners will be documented where vulnerable groups will provide their views and put forward their concerns that may be integrated into the delivery of various sub-projects. Implementing partners/MFPs will carry out a beneficiary satisfaction survey during the 3rd and 4th quarters of the project which will also cover the vulnerable groups and attention will be paid to ensure that all stakeholder’ opinions and feedback is reflected in the data collection mechanisms. The survey results and the lessons learned from it will be incorporated and will be used to inform decisions on the subprojects as they are rolled out. Annual reviews will be conducted on the Gender Equality Strategy, which will be adapted as required in light of changing circumstances or new learnings to ensure that the GES is continually improving, relevant, and effective to the needs of the communities. As such the engagement mechanisms and frequencies will be designed and customized based on the contextual needs of the vulnerable people. This will continue throughout the project life cycle. Implementing partners/MFPs will also build on its existing understanding of vulnerable people’s needs and will integrate this in the inception phase as well. In view of the current ban of female NGO staff, AKF and ACGF will ensure that women are adequately informed and consulted. ACGF will continue to inform and consult women directly. Where direct consultations are not possible, male MFPs/CDC members will be trained in conducting consultations with women and will serve as proxies in gathering and understanding women’s inputs and concerns. 5.5. Timelines Information disclosure and consultations are especially relevant throughout the early stages of the project, but also throughout the project cycle. Project design has therefore been based on consultations. Activities under each Component will include further consultations prior to their commencement to ensure transparency and accountability on project modalities, and to allow stakeholder voices to form the basis of the concrete design of every intervention and consultations will continue throughout the project cycle. This is an Empowering Microfinance and Enterprises for Resilience and Growth Project with a fixed time 18 frame spanning 18 months. There may not be any future phases of the project. However, the implementing partners/MFPs will communicate to stakeholders when appropriate about the (i) subprojects preparation and development (ii) administration process; (iii) implementation; and (iv) tracking and monitoring of project impacts and operation mechanisms. Accordingly, they will not provide any additional information or make commitments with the MFPs and MFIs and stakeholders beyond the scope of the current project and its subcomponents. However, they will provide necessary and more detailed information about the operations and implementation. 6. Resources and Responsibilities for implementing stakeholder engagement activities. AKF is implementing the World Bank supported Water Emergency Response Project (WERP) which has a fully staffed Program Implementation Unit with a robust mechanism and staffing. for the implementation of their SEP. To ensure efficiencies AKF will leverage capacities within WERP PIU to also assist in the implementation of SEP for the EMERGe project as well. in addition, ARTF MA will also oversee the implementation of the SEP under the EMERGe project. 7. Management Functions and Responsibilities The SEP implementation will be the responsibility of AKF’s PIU Environmental and Social Specialist. He/She will implement the SEP with the assistance and coordination of MFPs ESM teams. He will be reporting to PIU, AKF and then the WB. The Environmental and Social Specialist will be dedicated to the implementation of the AKF GRM for Component 2. *Proposed key staffs for microfinance services: No Position Qualification Experience 1 Team Leader Master’s degree, 5 years of experience 2 MIS Officers Bachelor Computer sciences Three Years Experiences 3 M&E Officers Bachelor, Bachelor’s degree Three Years Experiences 4 Loan Officer Bachelor BBA, Three Years Experiences 19 8. Grievance Redress Mechanism A grievance is an issue, concern, or claim (either perceived or actual) that an individual or community group wants addressed or resolved by the programme. These may include complaints of impacts, damages or harm caused by the project or related activities during providing, operation and implementation microfinance services to the targeted group and area of the project. A GRM will be established by the Project to provide a formal process for managing complaints from relevant stakeholders (members of the public, employees, and partners) as provided under ESS10 of the ESF. The objectives of the GRM shall include: i. Ensure prompt, consistent, and respectful receipt, investigation, and response to complaints. ii. Identify and manage s relevant stakeholder grievances and concerns and thus support effective risk management. iii. Ensure proper documentation of complaints and implementation of actions. iv. Contribute to continuous improvement in performance through lessons learned. v. Enhance trust and positive relationships with relevant stakeholders; and vi. Ensure compliance with laws and regulations and reduce exposure to litigation. Two different sets of GRM will be implemented for this project. AKF will set up and implement a GRM for Component 2 activities, and ACGF will implement a GRM specifically for Component 1 activities. Both organizations have already functioned GRMs in place in various projects in Afghanistan and will therefore continue with systems already in place. 8.1. AKF’s Grievance Redress Mechanism AKF is committed to safeguarding staff, beneficiaries, and other stakeholders and provides the needed support at all levels to create a safe environment for all. AKF will establish its GRM system for the project and a dedicated GRM specialist will be responsible for the implementation of the GRM by PIU and IPs throughout the project implementation. The GRM specialist ensures that staff and partners prevent harm to beneficiaries, particularly children and vulnerable adults, including exposure to abuse or exploitation; protects staff from inappropriate behavior such as bullying and harassment; and strongly penalizes everyone involved in financial misconduct including bribery, money laundering, and fraud. The IPs GRM officers within each provincial office monitor GR processes and reporting. They regularly conduct orientations and training for staff and partners on the social safeguards policy to ensure that staff and beneficiaries fully understand their rights and responsibilities. The policy also makes sure an effort will be made so that everyone involved understands social safeguard policies and reporting procedures. This is done through intermittent training, dissemination of information through leaflets, and consultation dialogues that are held with the communities and beneficiary partners. AKF will form Grievance Redress Committee (GRC) at National Level by its PIU, Provincial and district level by its IPs and the members of the National level GRC will be ESM & Gender Manager, M&E Manager and the GRM responsible staff. For the provincial GRC committee members will be Provincial Manager, ESM/GRM officer, MFPs representatives and local authorities’ representatives. The GRC members at district level will be IPs assigned district responsible staff, MFPs representative and district authorities’ representatives. Proposed Measures and Actions for GRM Strengthening: AKF has active Memorandums of Understanding 20 (MoU) with Awaaz Afghanistan, a toll-free, confidential humanitarian helpline in Afghanistan (signed in July 2019) for referring issues raised by callers on the ground and acting as a repository for information to stakeholders. Beneficiaries can call the Awaaz Afghanistan hotline number to report any concerns related to program implementation or social issues. AKF will distribute Awaaz Afghanistan cards to the individual beneficiaries and attach Awaaz Afghanistan posters in accessible and visible formats to encourage the beneficiaries to raise their voices and report any concerns. AKF has also piloted a community-based complaint mechanism (CBCM) project through a community consultation process to develop reporting mechanisms based on how the community would prefer to report. This project was underpinned by a survivor-focused approach to mitigate risks to survivors and others in reporting and responding to safeguarding concerns. AKF will draw on this experience and adapt for different communities considering various contexts. Socio-cultural norms have been taken into consideration in all safeguarding policies and procedures including reporting and responding mechanisms. There will be male and female CBCM focal points in the regional offices who are responsible for reporting grievances from beneficiaries of both genders. AKF’s will have a dedicated GRM specialist based in Kabul. In addition, dedicated staff of the IPs across provinces will be appointed. AKF will strengthen internal reporting and coordination mechanisms for the project. Grievance Redressal Steps: Grievances through Awaaz Afghanistan are forwarded directly to AKF’s PIU GEM specialist within 24 hours of complaint registration with Awaaz. The ESM unit will see the nature of the grievance if it’s a safeguarding case so it will be responded to base on AKF safeguarding investigation guideline for allegations of misconduct towards beneficiaries. Other grievances e.g., the management or program-related issue will be referred to HR or program. And the safeguarding unit will have a follow-up on every grievance to make sure it's handled and responded back to the complainant properly. According to AKF’s Safeguarding Policy for the project, anyone receiving safeguarding cases should notify the designated focal person within 24 hours. Within 72 hours of a formal allegation being made, AKF will convene a Strategy Meeting to agree on next steps. Any urgent attention required should be provided to parties involved in an incident (e.g., where a child or adult has been harmed) such as medical attention or immediate protection from further harm. Based on the severity of the allegation, it is decided in the Strategy Meeting the timeline of investigating and responding to a grievance. AKF will communicate its grievance mechanism with relevant stakeholders through provincial teams in the provincial offices. In both cases where a grievance is upheld or not, AKF will provide a response/explanation to the complainant. Sorting and Verification Oversight and Registration Acknowledgement Action/Resolution Processing /Investigation monitoring Relevant stakeholders can submit their grievances regarding any element of the project without any restriction through a variety of means as listed below: AKF will also explore grievance uptake channels already in existence to boost the grievance mechanism proposed, including the uptake channels at the regional and national levels. 21 While the existing mechanisms would be leveraged for this project, in order to address other requirements of ESS10, the system would be augmented for the purposes of this project in accordance with the objectives articulated above and the following steps: � Step 1: Uptake – Project relevant stakeholders will be able to provide feedback and report complaints through several channels. The aggrieved party must be able to select the most efficient institution, the most accessible means of filing a grievance, and must be able to circumvent partial relevant stakeholders in the Project, who may be implicated in the complaint. He or she must further be able to bypass some grievance channels that are perceived as potentially unresponsive or biased. The means to file a grievance would include the toll-free hotline Awaaz, SMS, email, filling up grievance forms, verbally, sending a letter, to implementing agencies via the implementing institutions’ websites, help desks and collection boxes stipulated for walk-ins at the sites of project activities. Anonymous grievances can also be raised. All uptake channels should permit grievances in Dari and Pashto as well. � A help desk will also be set up by AKF and implementing parties during the implementation of activities at the central and provincial levels. At the help desk, aggrieved parties can inquire about project activities, or they can file a grievance directly with the person manning the desk. Grievances can be filed in writing or verbally at the Help Desk. � The staff managing help desks and those operating the toll-free hotline number would be trained by the PIU for (a) the registration of a grievance; (b) the interaction with complainants; (c) appropriate responses to SEA/SH issues; (d) grievances of workers; and (e) Project components and Implementing Partners. � Step 2: Sorting and processing – All grievances received will be transferred to the GRM Focal Point at the PIU by the Implementing Partner/AKF. The GRM focal point will categorize the complaint and forward it to the responsible unit. The GRM focal point will also record the grievance in the same format as would be used at the PIU. � Step 3: Acknowledgement and follow-up – Within three (3) days of the date a grievance is submitted, the GRM focal point will communicate with the aggrieved and provide information on the likely course of action and the anticipated timeframe for resolution of the grievance. The information provided to the aggrieved would also include, if required, the likely procedure if the grievance had to be escalated outside the unit and the estimated timeline for each stage. � Step 4: Verification, investigation, action, and documentation – This step would involve gathering information about the grievance to determine the facts surrounding the issue and verifying the validity of the grievance, and then developing a proposed resolution. It is expected that many or most grievances will be resolved at this stage. All activities taken during this and the other steps will be fully documented, and any resolution logged in the register. In case the grievance is not resolved at this stage, it will be escalated to the next tier. � Step 5: Monitoring, Evaluation and Reporting – Monitoring refers to the process of tracking grievances and assessing the progression toward resolution. Each implementing agency would develop and maintain a grievance register and record all steps taken to resolve grievances or otherwise respond to feedback and questions. GRM data would be collated and reported monthly at all levels. � Step 6: Providing Feedback – This step involves informing those who have raised complaints, concerns, or grievances about the resolutions to the issues they have raised. Whenever possible, complainants should be informed of the proposed resolution in person, which gives them the opportunity to ask follow-up questions. If the complainant is not satisfied with the resolution, he or she will be informed of further options. The GRM would not prevent access to judicial and 22 administrative remedies. Each complaint must be closed within thirty (30) days of receipt - either resolved, withdrawn, or escalated. Grievances related to SEA/SH: Any grievance that surfaces to the Grievance Committee at the national level and if it is determined to relate to SEA/SH the Grievance Redressal Committee (GRC) will establish a case management team comprising GR focal point, HR and other relevant personnel from senior staff to handle the case. The case management team will do the investigation and provide the report of the investigation to the GRC team. Once the report is reviewed by the case management team/GRC, they will make the recommendations based on the findings. Investigation findings may result in a range of outcomes. The matter may be resolved, dismissed, found to be false/malicious or upheld. Based on that, the disciplinary process would be initiated. All the investigation process will be survivor centered and AKF will ensure the protection of the complainant/victims. Training: AKF will draw on its GR ToT for GRM staff and focal points who are responsible for delivering GR training to staff and onwards to the involved communities as relevant. AKF will organize a full-day training package for all new joiners and a half-day refresher training package for existing staff. The main topic of the training package will encompass AKF GR (or safeguarding) principles for staff, beneficiaries and implementing partners. The ToT will also provide information and sensitization to staff and beneficiaries on Do no Harm approaches, safe and positive culture, PSEAH, Speak Up, reporting and responding mechanisms. GRM for SEA/SH grievances: SEA/SH related grievances are handled through a survivor-centered approach. All grievance uptake channels can be used to report on SEA/SH issues. No grievance uptake mechanism can reject such grievances, and all personnel directly receiving grievances will be trained in the handling and processing of SEA/SH-related grievances. The Awaaz call center also includes support for safe and confidential reporting for incidents of sexual exploitation and abuse (SEA). Any recipients of the grievance should, with the survivor’s informed consent, report the case to one of the Project’s formal grievance recipients. A survivor can ask someone else to act as a survivor advocate and report on her/his behalf. Absolute confidentiality would be maintained for all grievances related to SEA/SH issues. This means that no information shall be disclosed at any time to any party without the informed consent of the person concerned. The survivor’s consent would also be sought for undertaking any action on the grievance. Under no circumstances should the survivor be pressured to consent to any conversation, assessment, investigation or other intervention with which they do not feel comfortable. A survivor can withdraw such consent at any time as well. If a survivor does not consent to sharing information, then only non-identifying information can be released or reported on. In the case of children, informed consent is normally requested from a parent or legal guardian and the children. Data on GBV cases recorded will only include the nature of the complaint (what the complainant says in her/his own words), whether the complainant believes the perpetrator was related to the project and additional demographic data, such as age and gender, will be collected and reported, with informed consent from the survivor. The GRM provides for offering the survivor referral to pre-identified GBV Service Providers in the area. Services can include health, psycho-social, security and protection, legal/justice, and economic reintegration support. This would be offered even if the survivor does not wish to file a formal complaint or if the complaint is not related to the project before closing the case. The SEA/SH Action Plan will list referral services in the different Project areas. 23 Where SEA/SH grievances have been allegedly committed by a Project worker, the grievance will also be reported to the respective employing agency. The PIU Social Specialist will follow up and determine jointly with the GRM Focal Point of the respective partner the likelihood that the allegation is related to the Project. The GBV Specialist will follow up and ensure that the violation of the Code of Conduct is handled appropriately. The responsibility to implement any disciplinary action lies with the employer of the perpetrator, in accordance with local labor legislation, the employment contract, and the code of conduct The GRM focal point will report back to the survivor on any steps undertaken and the results. All SEA/SH incidents would be reported to the World Bank in accordance with the informed agreement by the survivor within 48 hours. 24 9. Monitoring and Reporting 9.1 Involvement of Relevant Stakeholders in Monitoring Activities The Project will involve project relevant stakeholders in monitoring of project activities, including project performance as well as environmental and social risks and impacts. The MFPs will be established at the targeted project area that will be the key stakeholder serving in a monitoring function. Representing the MFPs members will be able to represent the voices of the community on project performance and impacts from a local perspective through regular consultation meetings with the Project implementers (ACGF and NGO/CSO partners) at the local level (using methods described above). In addition to the ARTF MA, AKF’s M&E team in PIU will employ participatory and gender-sensitive monitoring and evaluation (PME) methods and approaches to ensure that relevant stakeholders are fully involved in projects’ M&E activities to facilitate a bottom-up approach which supports people-centered decisions and observations. These PME methods and approaches will be implemented by IPs to make sure stakeholders are involved and engaged in monitoring of the project. Such involvement is made right from the design to the implementation where various local techniques can be used in any situation, urban or rural, with people of different literacy levels. Furthermore, PME is a process of self-assessment, collective knowledge generation, and cooperative action in which stakeholders in a program or intervention substantively and collaboratively identify the monitoring and evaluation issues, collect and analyze data, and take-action as a result of what they learn through this process� (Research Gate, 2018). There are several tools to be used during the PME processes, such as, direct observations, semi-structured interviews, participatory mapping and modeling transect walk including guided field walk, seasonal calendar, timelines and local histories, Venn diagrams, problem tree, direct-matrix pair-wise ranking and scoring and more. Every required tool will be fully administrated with the relevant stakeholders through a participatory approach where stakeholders will be the owners of processes and the M&E team will be the facilitators. In addition, the PME also provides a more people-centered approach and methods of reporting to the various groups of stakeholders using more contextual and local participatory methods. 9.2 Reporting Back to Stakeholder Groups The SEP will be periodically revised and updated as necessary during project implementation to ensure that the method of engagement remains appropriate and effective in relation to the project context and specific phases of the development. Any major changes to the project related activities and to its schedule will be duly reflected in the SEP. Quarterly summaries and internal reports on public grievances, enquiries, and related incidents, together with the status of implementation of associated corrective/preventative actions, will be collated by the designated GRM officer, and referred to the senior management of the project. The quarterly summaries will provide a mechanism for assessing both the number and the nature of complaints and requests for information, along with the Project’s ability to address those in a timely and effective manner. Information on public engagement activities undertaken by the Project during the year will be conveyed to the stakeholders in the following manner: - Publication of a standalone annual report on the project’s interaction with the stakeholders. - Monitoring of a beneficiary feedback indicator on a regular basis. The indicator used will be the number/percentage of public grievances received within a reporting period (e.g., monthly, quarterly, or annually) and number of those resolved within the prescribed timeline. 25