The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Financial Inclusion and Entrepreneurship Scaling Project (P168577) EASTERN AND SOUTHERN AFRICA | Malawi | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2021 | Seq No: 5 | ARCHIVED on 23-Sep-2022 | ISR52778 | Implementing Agencies: Ministry of Industry and Trade, Reserve Bank of Malawi, The Republic of Malawi Key Dates Key Project Dates Bank Approval Date: 25-Aug-2020 Effectiveness Date: 10-Dec-2020 Planned Mid Term Review Date: 11-Sep-2023 Actual Mid-Term Review Date: Original Closing Date: 30-Sep-2025 Revised Closing Date: 30-Sep-2025 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to increase access to financial services, promote entrepreneurship and capabilities of MSMEs in Malawi including addressing Coronavirus Disease 2019 (COVID-19) implications. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Liquidity Enhancement for MSMEs:(Cost $65.00 M) Scaling Entrepreneurship and Building Firm Capabilities:(Cost $7.50 M) Enhancing the Enabling Environment for Supporting the Financial Inclusion and Growth of Entrepreneurs:(Cost $9.00 M) Project Implementation Support:(Cost $4.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions The FInES project was approved by the Board on August 25, 2020. The Financing Agreement was signed on November 5, 2020, and the project became effective on December 10, 2020. Of the total project amount of US$86 million, the project allocated resources of up to US$47 million to be used by the PFIs to lend out to MSMEs for the five years’ lifespan of the project. Additionally, US$16 million was provided for concessionary loans, equity and quasi-equity funding to selected seed funds, venture capital funds, other investment enterprises and innovative startups, technical assistance and provision of partial credit guarantees for MSMEs through the Malawi Agricultural Industrial and Investment Corporation (MAIIC). The project has maintained subsidiary financing agreements with ten participating financial institutions (PFIs) and with the MAIIC. By June 30, 2022, the Project disbursed US$37.4 million (43.5 per cent of total financing) compared to US$21.8 million (24.7 percent of the total financing) that was recorded during the previous mission in February/March 2022. 9/23/2022 Page 1 of 7 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) About US$23.7 million was advanced to PFIs for lending out to micro, small and medium size enterprises (MSMEs). A total of 14,545 MSME’s obtained loans from the project’s lines of credit. In addition, US$2.3 million was advanced to MAIIC to invest in equity and to lend out to innovative start-ups as well as administering a partial credit guarantee (PCG) scheme. Between March and June 2022, an additional 10 MSMEs accessed funds from the PFIs backed by the PCG (the total number is now at 17). Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Substantial Substantial Substantial Sector Strategies and Policies Low Low Low Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Moderate Moderate Moderate Other Substantial Moderate Moderate Overall Moderate Moderate Moderate Results PDO Indicators by Objectives / Outcomes To increase financing to MSMEs IN01181881 ►Value of MSME loans provided by Participating Financial Intermediaries (PFIs) through the Line of Credit including the COVID-19 emergency facility (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 106,172.84 13,009,915.00 47,000,000.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 Comments: This indicator captures the value of MSMEs loans through the line of credit including the COVID-19 facility IN01181884 Ratio of loans from PFIs to women-owned MSMEs (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target 9/23/2022 Page 2 of 7 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Value 0.00 14.00 46.00 40.00 IN01181886 Ratio of loans from PFIs to youth owned MSMEs (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 13.00 20.00 IN01181888 ►Value of funds financed by MAIIC for innovative start-ups and SMEs (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 1,000,000.00 6,000,000.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 This indicator captures the value of funds from the project that MAIIC used for equity and quasi equity Comments: financing for innovative start-ups IN01181889 Ratio of the funds for women-owned enterprises (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 25.00 40.00 IN01181890 Ratio of the funds for youth owned enterprises (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 26.00 20.00 To scale up entrepreneurship IN01181883 ►Number of new firms established through the project support to incubators and accelerators (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 500.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 02-Dec-2024 Comments: This indicator captures the new firms established through the support to incubators and accelerators IN01181887 Ratio of which are women-owned (%) (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 40.00 To scale up entrepreneurship and skills support for MSMEs IN01181882 9/23/2022 Page 3 of 7 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) ►Number of MSMEs reporting improvement in capabilities (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 1,000.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 This indiator captures the number of MSMEs reporting improvements in their firms’ capability after Comments: receiving support from the project (disaggregated by gender) IN01181885 Ratio for women owned MSMEs (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 40.00 Intermediate Results Indicators by Components Increasing financing available to MSMEs IN01181891 ►NPLs on project portifolios (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 5.00 5.00 Date 02-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 Comments: This indicator captures the level of NPLs ratio to gross loans for the project loan portifolio IN01181894 ►Increase in citizen satisfaction with the project's provisioning of financial services to MSMEs based on periodic beneficiary feedback survey (percentage) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 25.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 Survey report was not finalized. Survey to cover 4 aspects of satisfaction with implementation of FInES: knowledge on part of citizens; Comments: efficiency of implementation; responsiveness to citizen needs; transparency of process. IN01181899 of which: women citizen satisfaction (percentage) (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 IN01181900 ►Value of PCG under the project (Amount(USD), Custom) 9/23/2022 Page 4 of 7 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2,000,000.00 Date 01-Jan-2021 01-Sep-2021 30-Jun-2022 01-Jan-2026 Comments: The amount of PCG capitalization Scaling Entrepreneurship and Building Firm Capabilities for MSMEs IN01181892 ►Number of project beneficiaries who successfully complete stage 1 of the training program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 1,000.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 This had not started. Comments: This indicator captures the number of beneficiaries that complete the first stage of the training program IN01181895 ►Number of project beneficiaries who successifully complete the stage 2 of the program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 500.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 This indicator captures the number of beneficiaries that completes the second stage of the training Comments: program IN01181897 ►Number of project beneficiaries who successfully complete the stage 3 of the trainign program (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 250.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 Comments: The indicator captures the number of beneficiaries that completes the third stage of the training program IN01181902 ►Number of female entrepreneurs trained through the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 120.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 Comments: This indicator captures the number of female entrepreneurs that are trained by the project 9/23/2022 Page 5 of 7 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Enhancing the Enabling Environment for Supporting Financial Inclusion IN01181893 ►Financial Literacy rate (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 37.00 37.00 37.00 60.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 This indicator tracks the level of financial literacy in Malawi, including for women Comments: IN01181896 ►Credit bureau coverage (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 2.00 40.20 15.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 Comments: This indicator measures the ratio of population of adults coverage of credit bureaus to total population IN01181898 ►MFI Hub Membership (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 22.00 37.00 40.00 80.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 Comments: The indicator measure the growth of membership to the MFI Hub IN01181901 ►MSME satisfactory rate with project implementation, disagregated by gender (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 80.00 Date 01-Oct-2020 01-Sep-2021 30-Jun-2022 27-Dec-2024 Survey report not yet finalized. Comments: This indicator measures the project satisfactory rate by the MSMEs Performance-Based Conditions Data on Financial Performance Disbursements (by loan) 9/23/2022 Page 6 of 7 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P168577 IDA-67460 Effective USD 86.00 86.00 0.00 48.75 35.24 58% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P168577 IDA-67460 Effective 25-Aug-2020 05-Nov-2020 10-Dec-2020 30-Sep-2025 30-Sep-2025 Cumulative Disbursements Restructuring History Level 2 Approved on 22-May-2022 Related Project(s) P179318-AF-Financial Inclusion and Entrepreneurship Scaling Up Project 9/23/2022 Page 7 of 7