The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) REPORT NO.: RES50402 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF INDIA SEWA 2025 DIGITAL FINANCIAL INCLUSION OF INFORMAL SECTOR APPROVED ON MARCH 22, 2019 TO SELF EMPLOYED WOMEN'S ASSOCIATION (SEWA) FINANCE, COMPETITIVENESS AND INNOVATION SOUTH ASIA Regional Vice President: Martin Raiser Country Director: Auguste Tano Kouame Global Director: Caroline Freund Practice Manager/Manager: Gabi George Afram Task Team Leader(s): Tushar Arora The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) ABBREVIATIONS AND ACRONYMS SEWA Self Employed Women's Association JSDF Japan Social Development Fund BC Business Correspondent The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P167886 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 22-Mar-2019 30-Apr-2023 Organizations Borrower Responsible Agency Self Employed Women's Association (SEWA) SELF EMPLOYED WOMEN'S ASSOCIATION Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is fostering increased use of digital financial services by women engaged in The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) informal activities in the target states. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A9908 29-Apr-2019 15-May-2019 15-May-2019 30-Apr-2023 2.73 2.36 .37 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. Background: “SEWA 2025 Digital Financial Inclusion of Informal Sector" (P167886) is a Japan Social Development Fund (JSDF) supported project, implemented by the Self-Employed Women's Association (SEWA), a community- based organization with a presence in 18 Indian states. The Project Development Objective (PDO) is fostering increased use of digital financial services by women engaged in informal activities in six Indian states of Gujarat, Rajasthan, Uttar Pradesh, Bihar, Assam and Meghalaya. The project aims to benefit at least 500,000 women who lack access and capacity to use digital/mobile technologies for financial transactions and need to be financially literate to keep pace with contemporary market requirements, improve their livelihoods, scale up businesses/microenterprises, and increase their incomes. Project beneficiaries are SEWA members (women) from low-income and marginalized households and the excluded communities in the target states. The project also aims to support SEWA to digitize its service delivery to serve their members better and improve efficiency and productivity. The Project became effective on May 15, 2019 and is scheduled to close on April 30, 2023. 2. Project status and progress on key fronts: Since its inception, the project has trained 412,205 women (82% of target) from marginalized households in basic and intermediate digital and financial literacy modules through a cadre of 485 master trainers (161% of target). The project has shown significant success in fostering increased use of digital and financial services. Sample surveys indicate that 64% of trained women report use of digital financial services/products, as against a baseline of 5.4%. The project has also commissioned the development and roll-out of SEWA App – a user friendly “Force multiplier” mobile application for SEWA's 1.8 million members, featuring interactive modules including an e-learning platform, digital survey platform, digital directory of member products/services and push notifications. The project also played an important role during the devastating Covid-19 waves of 2020 and 2021, helping thousands of SEWA members use the knowledge and skills gained under the project to connect to each other through virtual meetings, observe safety by limiting physical visits for payments, and reduce disruptions to livelihoods through use of digital services. The project is lagging on the onboarding of SEWA members as Banking Correspondent (BC) agents, having onboarded only 34 "e-sakhis" against an end-target of 300 BC agents. Project ratings for the achievement of the PDO and Implementation Progress are Moderately The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) Satisfactory, acknowledging the achievements in majority of the activities while reflecting the underperformance in BC-agent related activities. 3. Rationale for restructuring: SEWA has requested for a reallocation of undisbursed funds across categories via a letter to the World Bank dated July 1, 2022, proposing an increase of US$ 126,557 in the "Training" category, an increase of US$ 36,803 in the Goods category, and a corresponding decrease in the Consultants category in line with less than anticipated expenditure on consultants. The key reason behind the request as articulated by SEWA is the greater demand for digital and financial literacy trainings from its members following the COVID pandemic, because of which SEWA has proposed an upward revision in the training target from 500,000 to 700,000 members. The target number of master trainers has also been revised upwards by SEWA from 300 to 500, which in turn necessitates the procurement of additional digital devices for the master trainers to conduct these trainings. 4. Bank team's assessment: After a detailed assessment of the request, the task team agrees with the proposed increase in the scope of training activities, since it directly contributes to the PDO. Therefore, the task team: (a) agrees with the proposed reallocation of undisbursed funds across categories as proposed by SEWA; (b) agrees with the proposed increase in target number of master trainers from 300 to 500; (c) partially agrees with the proposed increase in target number of trainees; the task team recommends that the target be revised to 600,000 instead of 700,000 as proposed by SEWA, given the need to focus on other project activities (i.e. BC agents activity) that have been lagging. Furthermore, the task team proposes modifications to two PDO indicators, "Percentage increase in women (in the target group) using digital financial products/services" and "Percentage increase in average number of digital financial transactions (in target group) per month" to reflect the findings from the baseline survey that was conducted after the design of the results framework and better measure the project outputs/outcomes. These changes are described in the next section under the sub-heading "Change in results framework". II. DESCRIPTION OF PROPOSED CHANGES 1. Grant Reallocations: a. Reallocation across categories: It is proposed to increase the allocations in the "Training" and "Goods" categories by US$ 126,557 and US$ 36,803 respectively, and proportionately decrease the "Consultants" category. This is to facilitate an expansion of training activities, and procurement of additional devices for additional master trainers that will be onboarded. The revised category-wise allocations will continue to remain within the defined category-wise caps. Changes are summarized in the following table: Category-wise Original (US$) Modified (US$) Consultants 545,990 386,543 Training 1,733,910 1,860,467 Goods 177,940 214,743 Operating Costs 272,160 268,247 TOTAL 2,730,000 2,730,000 b. Reallocation across components: The corresponding component-wise reallocations are summarized in the following table: Category-wise Original Modified (US$) The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) (US$) Component 1: Needs assessment and technology mapping 383,880 382,314 Component 2: Strengthening SEWA's delivery system for improving financial and technology awareness 864,742 859,797 Component 3: Catalyzing fintech adoption at the grassroots 1,210,000 1,230,050 Component 4: Project Management and administration, monitoring and evaluation, knowledge dissemination 271,378 257,839 TOTAL 2,730,000 2,730,000 2. Change in Results Framework: Changes are proposed to the following indicators: S.No Indicator Proposed change Rationale PDO Indicator: Percentage  Indicator to be revised  The baseline survey, conducted in the first year of indicator 1 increase in women (in to: Percentage of the project, revealed that the % of women using the target group) women (in the target digital financial products/services in the target using digital financial group) using digital group was 5.4%. Given such a low base (which products/services financial wasn't known at the time of project design), the products/services. end target of a 50% increase upon this is very low. A recent SEWA survey indicates that the  Baseline value to be set percentage of women using digital financial at 5.4%. End-target products/services among respondents trained remains the same. under the project is 64% which represents an increase of 1085%. It is therefore proposed to measure the % of women using digital financial products/services in the target group rather than measuring the % increase in the % of women using these products/services.  End-target of "50%" remains the same. PDO Indicator: Percentage  Indicator to be  The baseline survey, conducted in the first year of Indicator 3 increase in average dropped the project, revealed that the average number of number of digital digital financial transactions performed by the financial transactions surveyed group in the preceding month was 0.128 (in target group) per which is very low. An end-target increase of 50% month over this very low base still represents a very low volume of monthly digital financial transactions. A recent SEWA survey indicates that the average number of digital financial transactions in the target group (i.e. trained under the project) is now 1.072 which represents an increase of 737% over the baseline value.  Furthermore, the indicator is similar to PDO indicator 1 which also measure usage of digital financial services/products among the target group; with the difference being that it measures the volume of usage. Given that this project is aimed at sparking usage of digital financial products among a target population that largely lacks digital and The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) financial literacy (i.e. going from "no usage" to "usage"), this indicator (aimed at measuring volume of transactions) does not inform the PDO any more than PDO indicator 1. It is therefore proposed that this indicator be dropped.  It is proposed that Intermediate Indicator 3 which measures the "Number of women trained in digital financial products/services" be made PDO indicator 3, as it is an important measure of the reach of the project in the target population, and pertinent to the PDO. Intermediate Indicator: "Number  End target to be  As per the expansion of training activities as indicator 1 of women trained as revised to 500 proposed by SEWA. master trainers in digital financial products/services" Original end target: 300 Intermediate Indicator: "Number  End target to be  As per the expansion of training activities as indicator 3 of women trained in revised to 600,000 proposed by SEWA. digital financial  It is proposed that this indicator be made a PDO products/services"  Indicator to be made indicator, as it is an important measure of the reach Original end target: PDO indicator 3. of the project in the target population, and 500,000 pertinent to the PDO. 3. Project development objective and component-wise objectives remain unchanged. 4. Grant Closing Date remains unchanged. 5. There are no environmental or social issues expected because of the proposed restructuring. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ Project's Development Objectives ✔ Loan Closing Date(s) ✔ The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) Cancellations Proposed ✔ Additional Financing Proposed ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Change in Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE Percentage of women (in the target group) using digital financial products/services. Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 5.40 63.00 50.00 Revised Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Number of digital products/services offered to women (in target group) for the first time Unit of Measure: Number Indicator Type: Custom The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) Baseline Actual (Current) End Target Action Value 0.00 3.00 5.00 No Change Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Percentage increase in average number of digital financial transactions (in target group) per month Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 58.00 50.00 Marked for Deletion Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Number of women trained in digital financial products/services Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 202114.00 600000.00 New Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Intermediate Indicators IO_IND_TABLE Number of women trained as master trainers in digital financial products/services Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 317.00 500.00 Revised Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Number of women engaged as BC agents Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 26.00 300.00 No Change Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Number of women trained in digital financial products/services Unit of Measure: Number The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 202114.00 500000.00 Marked for Deletion Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Number of SEWA institutions / centers linked to digital finance marketplaces Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 3.00 5.00 No Change Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Percentage of SEWA members involved in savings / credit activities transacting through digital finance products/services Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 25.00 No Change Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Percentage of cash transactions in three SEWA social enterprises switched to digital payments Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 50.00 25.00 No Change Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 Percentage of women beneficiaries who report satisfaction with the digitization of service delivery at SEWA Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 75.00 75.00 No Change Date 15-Feb-2019 08-Oct-2021 15-Mar-2023 The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Needs assessment and Needs assessment and 0.38 Revised 0.38 technology mapping technology mapping Strengthening SEWA's Strengthening SEWA's Institutional capacity for DFS 0.86 Revised Institutional capacity for DFS 0.86 training and service delivery training and service delivery Catalyzing Fintech adoption by Catalyzing Fintech adoption by 1.21 Revised 1.23 informal sector women informal sector women Project Management and Project Management and Administration, Monitoring and Administration, Monitoring and 0.27 Revised 0.26 Evaluation, and Knowledge Evaluation, and Knowledge Management Management TOTAL 2.72 2.73 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed TF-A9908-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: DISB - CONSULTING services 545,990.00 292,568.53 386,543.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: DISB - TRAINING WORKSHOP 1,733,910.00 1,191,779.02 1,860,467.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: DISB - GOODS 177,940.00 165,017.31 214,743.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: DISB - OPERATING COSTS The World Bank India SEWA 2025 Digital Financial Inclusion of Informal Sector (P167886) 272,160.00 212,539.52 268,247.00 100.00 100.00 Total 2,730,000.00 1,861,904.38 2,730,000.00 Note to Task Teams: End of system generated content, document is editable from here.