The World Bank Implementation Status & Results Report Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) LATIN AMERICA AND CARIBBEAN | Argentina | IBRD/IDA | Investment Project Financing (IPF) | FY 2024 | Seq No: 2 | Archived on 24-May-2024 | ISR00571 Implementing Agencies: Banco de Inversión y Comercio Exterior (BICE) 1. OBJECTIVE 1.1 Development Objective Original Development Objective (Approved as part of Approval package on 21-Aug-2023) Promote access to sustainable finance for micro, small and medium enterprises and to respond effectively in case of an eligible crisis or emergency. Has the Development Objective been changed since Board Approval of the Project Objective? No 2. COMPONENTS Name Strengthening capacity of financial sector stakeholders:(Cost 15,000,000.00) Promoting access to sustainable finance for MSMEs:(Cost 183,000,000.00) Project Management:(Cost 2,000,000.00) Contingent Emergency Response:(Cost 0.00) 3. OVERALL RATINGS Name Previous Current Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial 4. KEY ISSUES & STATUS May 24, 2024 Page 1 of 7 The World Bank Implementation Status & Results Report Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) 4.1 Implementation Status and Key Decisions The Project was declared effective on December 4, 2023. BICE, the implementing entity, is making important progress in project implementation towards the achievement of the PDO, including the following 3 key activities. First, BICE initiated the provision of technical assistance to support commercial banks to develop and/or improve their environmental and social management systems (ESMS). In addition, BICE is advancing the development of a tool for identifying productive subloans for MSMEs with a focus on mitigation and adaptation of climate change events. Finally, BICE started the design of a rigorous impact evaluation (randomized control trial) with the support of the World Bank to measure the impact of subloans by comparing the differences in outcomes between regular loans (control group) and ESG loans (treatment group). The expected results of this evaluation would capture the effects on profitability, productivity, and job creation for beneficiary MSMEs as a result of investments made in mitigation and/or adaptation to climate change. 5. SYSTEMATIC OPERATIONS RISK-RATING TOOL Rating at Approval Last Approved Rating Risk Category Approval Package - ISR Seq. 01 - 01 Dec Proposed Rating 22 Aug 2023 2023 Political and Governance Substantial Substantial Substantial Macroeconomic High High High Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Substantial Substantial Substantial Stakeholders Moderate Moderate Moderate Overall Substantial Substantial Substantial May 24, 2024 Page 2 of 7 The World Bank Implementation Status & Results Report Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) 6. RESULTS 6.1 PDO Indicators by PDO Outcomes Strengthening capacity of financial sector stakeholders Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Low Mar/2023 Low 19-May-2024 Low 19-May-2024 High Dec/2028 BICE’s governance and Comments on This indicator measures the level of implementation of ESG objectives prioritized under BICE's strategy arrangements achieving targets governance and institutional strategy that are supported by the project (benchmarked to support the prioritization of international standards). The indicator has four levels: High (if at least 85 percent of the ESG objectives (Text) activities are implemented), Substantial (between 60 and 85 percent) , Moderate (between 40 and 59 percent), Low (less than 40 percent of activities implemented). Percentage of financial 0.00 Mar/2023 0 19-May-2024 0 19-May-2024 100.00 Dec/2028 intermediaries that set up a Comments on This indicator measures the percentage of financial intermediaries, including BICE, that access mechanism to monitor and achieving targets to the credit line and/or the partial credit guarantees under the project that set up a evaluate ESG financing in mechanism to identify, monitor, evaluate, and report ESG financing of their lending portfolios. their portfolios (Percentage) Promoting access to sustainable finance for MSMEs Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year 0.00 Mar/2023 0 20-Nov-2023 0 18-Nov-2023 340,000,000.00 Dec/2028 Volume of subloans MSMEs Comments on This indicator measures the total volume (US$) of green subloans, sustainability-linked receiving ESG subloans achieving targets subloans, and/or social subloans provided by BICE and PFIs to eligible MSMEs, including the (Amount(USD)) subloans guaranteed by the partial credit guarantee fund. May 24, 2024 Page 3 of 7 The World Bank Implementation Status & Results Report Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) 6.2 Intermediate Results Indicators by Components Strengthening capacity of financial sector stakeholders Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year BICE, PFIs, and MSMEs Low Mar/2023 Low 14-May-2024 Low 14-May-2024 High Dec/2028 integrate climate change Comments on This indicator measures the level of integration of ESG practices recommended by a ESG best risks, costs, and achieving targets practices action plan developed under component 1 for BICE, PFIs and MSMEs getting access opportunities into their to finance. This indicator has four levels: High, Substantial, Moderate, Low. business models. (Text) BICE integrates a ESG No Mar/2023 no 14-May-2024 no 14-May-2024 Yes Dec/2028 Department as part of its Comments on This indicator measures the organizational ESG unit established and functioning at BICE with organizational structure. achieving targets clearly defined roles and responsibilities, trained staff and adequate tools to operate. (Yes/No) Promoting access to sustainable finance for MSMEs Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Volume of subloans MSMEs 0.00 Mar/2023 0 13-May-2024 0 13-May-2024 170,000,000.00 Dec/2028 receive for climate change Comments on This indicator measures the minimum volume (US$) of subloans that MSMEs receive with mitigation and adaptation achieving targets project funds to finance their working capital and investment needs that qualify as climate activities with project funds change mitigation and/or adaptation activities as described in the POM. (Amount(USD)) Volume of subloans financed 0.00 Mar/2023 0 13-May-2024 0 13-May-2024 90,000,000.00 Dec/2028 with Project funds for Comments on This indicator measures the minimum volume (US$) of subloans that MSMEs receive with women MSMEs achieving targets project funds to finance their working capital and investment needs, including for mitigation (Amount(USD)) and adaptation activities, that qualify as women MSMEs as described in the POM. 0.00 Mar/2023 0 13-May-2024 0 13-May-2024 20,000,000.00 Dec/2028 May 24, 2024 Page 4 of 7 The World Bank Implementation Status & Results Report Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) Volume of subloans Comments on This indicator measures the total volume (US$) of ESG subloans provided by PFIs with their guaranteed by the partial achieving targets own funds to MSMEs for financing their working capital and investment needs that are credit guarantee fund guaranteed by the partial credit guarantee fund. (Amount(USD)) Percentage of subloans 0.00 0 0 50.00 guaranteed by the PCG Comments on This indicator measures the percentage of subloans, guaranteed by the partial credit fund financing achieving targets guarantee fund, provided by PFIs with their own funds to MSMEs for financing their working mitigation and capital and investment needs that qualify as climate change mitigation and/or adaptation adaptation activities. activities as described in the POM. (Percentage) 0.00 Mar/2023 0 13-May-2024 0 13-May-2024 1,200.00 Dec/2028 Comments on This indicator measures the total number of MSMEs getting access to green subloans, Number of MSMEs receiving achieving targets sustainability linked subloans, and/or social subloans for financing their working capital and ESG subloans (Number) investment needs. This indicator includes the number of MSMEs getting access to subloans guaranteed by the partial credit guarantee fund. Project Management Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year 0.00 Mar/2023 0 13-May-2024 0 13-May-2024 75.00 Dec/2028 MSMEs report their Comments on This indicator measures the level of satisfaction of MSMEs that get access to finance and/or satisfaction with the financial achieving targets benefit from strengthening capacity activities. This indicator will measure the results of products and capacity surveys conducted to MSMEs: (i) after the application process for getting access of a financial building activities offered product is completed and/or a capacity building activity is delivered, (ii) one year (or another under the project period of time defined in the POMl) after getting access to products and/or services under the (Percentage) project, and (iii) before the closing date of the product. May 24, 2024 Page 5 of 7 The World Bank Implementation Status & Results Report Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) 7. DATA ON FINANCIAL PERFORMANCE 7.1 Cumulative Disbursements 7.2 Disbursements (by loan) Loan/Credit/TF Status Original Revised Cancelled Disbursed Undisbursed % Disbursed IBRD-95870 Effective 200.00 200.00 0.00 0.50 199.50 0.25% 7.3 Key Dates (by loan) Loan/Credit/TF Status Approval Signing Effectiveness Orig. Closing Rev. Closing IBRD-95870 Effective 22-Aug-2023 30-Oct-2023 04-Dec-2023 31-Dec-2028 31-Dec-2028 8. KEY DATES May 24, 2024 Page 6 of 7 The World Bank Implementation Status & Results Report Access to Sustainable Finance for Micro, Small and Medium Enterprises Project (P180456) Key Events Planned Actual Approval 22-Aug-2023 22-Aug-2023 Effectiveness 04-Dec-2023 04-Dec-2023 Mid-Term Review No. 01 30-Oct-2025 Operation Closing/Cancellation 31-Dec-2028 9. RESTRUCTURING HISTORY 10. ASSOCIATED OPERATION(S) There are no associated operations May 24, 2024 Page 7 of 7