The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) EUROPE AND CENTRAL ASIA | Georgia | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2021 | Seq No: 5 | ARCHIVED on 24-Oct-2023 | ISR58261 | Implementing Agencies: Enterprise Georgia, Georgia, Ministry of Economy and Sustainable Development, Ministry of Economy and Sustainable Development, National Bank of Georgia Key Dates Key Project Dates Bank Approval Date: 11-May-2021 Effectiveness Date: 17-Aug-2021 Planned Mid Term Review Date: 25-Apr-2024 Actual Mid-Term Review Date: Original Closing Date: 30-Jun-2026 Revised Closing Date: 30-Jun-2026 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to provide relief to micro, small, and medium-size enterprises and support their recovery, including by strengthening the enabling environment for access to finance. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Financial relief and recovery for MSMEs:(Cost $82.30 M) Component 2: Digital payments and financial infrastructure upgrading:(Cost $14.50 M) Component 3: Project management and monitoring:(Cost $5.80 M) Component 4: Contingent Emergency Response Component (CERC) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions The progress toward achievement of the Project Development Objective (PDO) remains Satisfactory based on: (i) continued relevance of Project’s objectives and components; (ii) strong commitment of Project Implementing Entities (PIEs) and acceleration in disbursements; and (iii) low likelihood of material risks that may undermine the achievement of the PDO at this stage. The overall Implementation Progress (IP) remains at Moderately Satisfactory to reflect moderate implementation challenges and additional time needed for the preparatory activities. PIEs are actively addressing these challenges and there have been positive developments: - under component 1, since disbursements commenced in September 2022, the Project has already provided about GEL 117 million in financial support (grants, co-financing, and guaranteed loans) to MSMEs by September 2023, which are expected continue ramping up in coming months. 10/24/2023 Page 1 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) The first regional center in Zugdidi operates in a pilot mode and the preparation for the delivery of training, workshops, and consulting services to MSMEs are at advanced stages. In addition, EG accomplished three out of nine performance-based conditions. - Under component 2, the National Bank of Georgia (NBG) is finalizing selection of the vendor for the Instant Payment System. Ministry of Economy and Sustainable Development (MOESD) is preparing legislative amendments on secured transactions. MOESD and the Public Service Delivery Agency (PSDA) remain committed to the Know-Your-Customer (KYC) reform and launching procurement activities are under discussion. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Substantial Moderate Moderate Sector Strategies and Policies Substantial Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Substantial Substantial Substantial Stakeholders Moderate Moderate Moderate Other Moderate Moderate Moderate Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes Relief for MSMEs IN01353795 ►Volume of financial support provided to MSMEs affected by the pandemic (GEL million) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 66.00 117.00 450.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353817 ►Survivorship ratio: ratio of inactive enterprises to total beneficiaries of Enterprise Georgia, divided by ratio of inactive enterprises to total active enterprises in the economy (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 10/24/2023 Page 2 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Value NA NA NA <1 Date 31-Dec-2020 31-Mar-2023 30-Sep-2023 31-Dec-2025 Resilient Recovery of MSMEs IN01353816 ►Revenue multiplier: ratio of revenue-weighted average annual change in MSME revenue of Project beneficiaries, divided by the average change of revenue in their respective sector (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value NA NA NA >1 Date 31-Dec-2020 31-Mar-2023 30-Sep-2023 31-Dec-2025 IN01353818 ►Number of digital transactions facilitated through the new instant payment system (million) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 17.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 Strengthening the enabling environment for access to finance for SMEs IN01353819 ►Establishment of an upgraded movable collateral registry (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 Intermediate Results Indicators by Components Component 1: Financial relief and recovery for MSMEs IN01353821 ►Number of MSMEs supported by grants under the Project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,027.00 1,027.00 5,000.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353823 ►Volume of grants disbursed to MSMEs under the Project (GEL million) (Text, Custom) 10/24/2023 Page 3 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 23.00 23.00 70.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353825 ►Number of enterprises supported by co-financing of interest payments under the Project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 102.00 215.00 200.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353827 ►Volume of loans supported by co-financing under the Project (GEL million) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 79.00 178.00 83.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353829 ►Number of guarantees issued under the Project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 49.00 110.00 200.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353831 ►Volume of loans guaranteed with support of the Project (GEL million) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 43.00 93.00 420.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353832 ►NPL ratio of co-financing of interest payments program (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target NPL ratio in the co- The historic NPL ratio for Value 0.00 0.00 financing loan portfolio EG's programs is 0.6% should be below 8% Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353833 ►NPL ratio of the partial credit guarantee program (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 10/24/2023 Page 4 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) NPL ratio of the PCG The historic NPL ratio for Value 0.00 0.00 program should be EG's programs is 0.6% below 8% Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353834 ►Number of MSMEs receiving training and/or technical assistance for digital transformation and/or COVID-proofing (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 300.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353835 ►Share of volume of financial support under the Project channeled to investments in the green economy and climate financing (%) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 15.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353836 ►EG Citizen Engagement: share of MSMEs reporting that programs reflected their needs (%) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 60.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353837 ►Institutional actions to strengthen the grants program (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target EG (1) adopted of a robust M&E framework, which improves the EG has adopted a methodology for robust M&E framework monitoring the impact and used evidence to of the program on improve the design of Value NA NA MSME beneficiaries; its grants program and and (2) launched a develop sustainable pilot graduation options for its scheme to provide development. institutional support to selected high- performance beneficiaries. Date 30-Nov-2020 31-Mar-2023 30-Sep-2023 31-Dec-2025 Institutional actions to strengthen the grants program include: (1) the adoption of a robust M&E framework, which improves the methodology for monitoring the impact of the program on MSME beneficiaries; (2) the amendments of the resolution governing the program to reflect improvements; and Comments: (3) launch of a pilot graduation scheme to provide institutional support to selected high-performance beneficiaries. 10/24/2023 Page 5 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) IN01353838 ►Institutional actions to strengthen the co-financing of interest payments program (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target EG has adopted a EG does not have robust M&E framework evaluation systems and and conducted an measures in place to evaluation of its co- assess the effectiveness financing program, of its co-financing of Value NA NA using evidence to interest payments on an propose amendments frequent basis and better to improve targeting, align its targeting eligibility criteria and towards strategic sectors other aspects of the and/or thematic areas. program. Date 30-Nov-2020 31-Mar-2023 30-Sep-2023 31-Dec-2025 Institutional actions to strengthen the co-financing of interest payments program include: (1) the adoption of a robust M&E framework, which improves the methodology for monitoring the impact of the program; Comments: (2) the completion of an evaluation of the co-financing program; (3) the amendments of the resolution governing the program to reflect improvements. IN01353839 ►Institutional actions to strengthen the partial credit guarantees program (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target EG has strengthened EG currently does not the design and have a monitoring implementation system, a risk arrangements of the management framework, program, including and an outreach strategy EG adopted a financial more robust risk Value NA to evaluate the modelling tool. monitoring, awareness performance and risks of campaigns, stronger the program and propose participation improvements in its agreements with PFIs, design. and financial modelling tool. Date 30-Nov-2020 31-Mar-2023 30-Sep-2023 31-Dec-2025 Institutional actions to strengthen the partial credit guarantee programs include: (1) introduction of measures to engage with PFIs, including the launch of an information and awareness campaign among PFIs, as well as the introduction of a risk monitoring system; (2) amendment of the participation Comments: agreements signed with PFIs to specify that EG can impose sanctions, remedies, and termination on PFIs; (4) adoption of a financial modelling tool. IN01353840 ►Introduction of a managerial skills program (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Nov-2020 31-Mar-2023 30-Sep-2023 31-Dec-2025 IN01353841 ►Share of financial resources (grants, co-financing, guarantees) under the Project channeled to women-inclusive firms (Percentage, Custom) 10/24/2023 Page 6 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Baseline Actual (Previous) Actual (Current) End Target Value 24.00 40.00 40.00 35.00 Date 31-Dec-2020 31-Mar-2023 30-Sep-2023 31-Dec-2025 Note: indicator as of September 30, 2023 does not yet include data for the guarantee program. Comments: Component 2: Digital payments and financial infrastructure upgrading IN01353820 ►Volume of retail transactions recorded in the IPS (GEL billion) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353822 ►Share of instant payment transactions (%) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 15.00 Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353824 ►Establishment of a functional KYC registry (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2026 IN01353826 ►Approval of amendments to legal framework for secured transactions (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 31-Dec-2024 IN01353828 ►Establishment of a working group for KYC Registry (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 30-Jun-2023 IN01353830 10/24/2023 Page 7 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) ►Preparation of technical specifications for the modernization of the collateral registry (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Jun-2021 31-Mar-2023 30-Sep-2023 31-Mar-2025 Performance-Based Conditions IN01353842 ►PBC 1 Institutional actions to strengthen the grants program (Text, Process, 13.60, 0.00%) Baseline Actual (Previous) Actual (Current) CY 2025 EG (1) adopted of a robust M&E framework, which improves the methodology for monitoring the impact of the program on MSME Value NA NA -- beneficiaries; and (2) launched a pilot graduation scheme to provide institutional support to selected high- performance beneficiaries. Date -- 31-Mar-2023 30-Sep-2023 -- IN01353843 ►PBC 2 Institutional actions to strengthen the co-financing of interest payments program (Text, Process, 6.70, 6.5%) Baseline Actual (Previous) Actual (Current) CY 2025 EG does not have evaluation systems and measures in place to assess the effectiveness of its co-financing of interest Value NA NA -- payments on an frequent basis and better align its targeting towards strategic sectors and/or thematic areas. Date -- 31-Mar-2023 30-Sep-2023 -- IN01353844 10/24/2023 Page 8 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) ►PBC 3 Institutional actions to strengthen the partial credit guarantees program (Text, Process, 13.60, 13.2%) Baseline Actual (Previous) Actual (Current) CY 2025 EG currently does not have a monitoring system, a risk management framework, and an outreach strategy to EG adopted a financial Value NA -- evaluate the performance modelling tool. and risks of the program and propose improvements in its design. Date -- 31-Mar-2023 30-Sep-2023 -- Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P173975 IBRD-92390 Effective USD 102.90 102.90 0.00 25.00 73.90 25% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P173975 IBRD-92390 Effective 11-May-2021 17-May-2021 17-Aug-2021 30-Jun-2026 30-Jun-2026 Cumulative Disbursements 10/24/2023 Page 9 of 10 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 10/24/2023 Page 10 of 10