The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Financial Inclusion and Entrepreneurship Scaling Project (P168577) AFRICA EAST | Malawi | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2021 | Seq No: 4 | ARCHIVED on 26-Apr-2022 | ISR50723 | Implementing Agencies: Ministry of Industry and Trade, The Republic of Malawi, Reserve Bank 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 budget 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 to support partial credit guarantee for MSMEs through the Malawi Agricultural Industrial and Investment Corporation (MAIIC). Three Implementation Support Reports (ISRs) have been filed thus far, and all have rated project implementation "Satisfactory". The third ISR was filed in October, 2021, based on the findings of an implementation support mission that took place between August 31 and September 3, 2021, covering the period from December 10, 2020. The current, and forth, ISR is based on the findings of an implementation support mission that took 4/26/2022 Page 1 of 8 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) place between February 28 and March 9, 2022, covering the period from September 10, 2020 when the project became effective. The overall performance of the Project is also rated Satisfactory. The project has so far disbursed a total of US$21.79 million, representing 24.7 percent of the total project budget. The Reserve Bank of Malawi (RBM) has signed subsidiary agreements with eleven participating financial institutions (PFIs). About US$12.0 million was advanced to these PFIs, and by February 2022 about US$4.0 million of the advanced amount was loaned to micro, small and medium size enterprises (MSMEs). US$2.3 million was disbursed to Malawi Agricultural and Industrial Investment Cooperation (MAIIC) to cover concessional loans and administer a partial credit guarantee (PCG). MAIIC has commenced the process of recruiting ecosystem players, and this will be instrumental in delivering a pipeline of innovative enterprises and start-ups requiring long-term/equity financing and/or concessional loans. In terms of impact, over 1,000 micro enterprises, and 100 small size enterprises and agriculture cooperatives/groups have accessed these funds. These include significant number of youth-owned, and women-owned enterprises. Seven MSMEs have accessed US$0.2 million from PFIs backed by the project PCG. An aide memoire for the mission was discussed at a wrap-up meeting held on March 25, 2022, chaired by Mr. Nations Msowoya, the Acting Director of Debt and Aid Management in the Ministry of Finance. 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 IN01118993 ►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 4,000,000.00 47,000,000.00 4/26/2022 Page 2 of 8 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Date 01-Oct-2020 01-Sep-2021 28-Feb-2022 27-Dec-2024 Comments: This indicator captures the value of MSMEs loans through the line of credit including the COVID-19 facility IN01119016 Ratio of loans from PFIs to women-owned MSMEs (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 14.00 14.00 40.00 IN01119018 Ratio of loans from PFIs to youth owned MSMEs (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 IN01119020 ►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 0.00 6,000,000.00 Date 01-Oct-2020 01-Sep-2021 28-Feb-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 IN01119021 Ratio of the funds for women-owned enterprises (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 40.00 IN01119022 Ratio of the funds for youth owned enterprises (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 To scale up entrepreneurship IN01118995 ►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 28-Feb-2022 02-Dec-2024 Comments: This indicator captures the new firms established through the support to incubators and accelerators IN01119019 Ratio of which are women-owned (%) (Percentage, Custom Supplement) 4/26/2022 Page 3 of 8 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 40.00 To scale up entrepreneurship and skills support for MSMEs IN01118994 ►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 28-Feb-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) IN01119017 Ratio for women owned MSMEs (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 40.00 Overall Comments PDO The Mission noted with concern that the baseline Survey has not yet been undertaken, and hence some of the indicators were not updated. The PIU has been urged to do the survey expeditiously so that all indicators are updated by the next ISM. Intermediate Results Indicators by Components Increasing financing available to MSMEs IN01119023 ►NPLs on project portifolios (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 Date 02-Oct-2020 01-Sep-2021 28-Feb-2022 27-Dec-2024 Comments: This indicator captures the level of NPLs ratio to gross loans for the project loan portifolio IN01119026 ►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 28-Feb-2022 27-Dec-2024 4/26/2022 Page 4 of 8 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) 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. IN01119031 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 01-Sep-2021 27-Dec-2024 IN01119032 ►Value of PCG under the project (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 100,000.00 2,000,000.00 Date 01-Jan-2021 01-Sep-2021 28-Feb-2022 01-Jan-2026 Comments: The amount of PCG capitalization Scaling Entrepreneurship and Building Firm Capabilities for MSMEs IN01119024 ►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 28-Feb-2022 27-Dec-2024 Comments: This indicator captures the number of beneficiaries that complete the first stage of the training program IN01119027 ►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 28-Feb-2022 27-Dec-2024 This indicator captures the number of beneficiaries that completes the second stage of the training Comments: program IN01119029 ►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 28-Feb-2022 27-Dec-2024 Comments: The indicator captures the number of beneficiaries that completes the third stage of the training program 4/26/2022 Page 5 of 8 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) IN01119034 ►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 01-Sep-2021 27-Dec-2024 Comments: This indicator captures the number of female entrepreneurs that are trained by the project Enhancing the Enabling Environment for Supporting Financial Inclusion IN01119025 ►Financial Literacy rate, disaggregated by gender (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 28-Feb-2022 27-Dec-2024 Comments: This indicator tracks the level of financial literacy in Malawi, including for women IN01119028 ►Credit bureau coverage (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.00 2.00 2.00 15.00 Date 01-Oct-2020 01-Sep-2021 28-Feb-2022 27-Dec-2024 Comments: This indicator measures the ratio of population of adults coverage of credit bureaus to total population IN01119030 ►MFI Hub Membership (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 22.00 37.00 39.00 80.00 Date 01-Oct-2020 01-Sep-2021 28-Feb-2022 27-Dec-2024 Comments: The indicator measure the growth of membership to the MFI Hub IN01119033 ►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 28-Feb-2022 27-Dec-2024 4/26/2022 Page 6 of 8 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Comments: This indicator measures the project satisfactory rate by the MSMEs Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P168577 IDA-67460 Effective USD 86.00 86.00 0.00 32.40 54.00 37% 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 4/26/2022 Page 7 of 8 The World Bank Implementation Status & Results Report Financial Inclusion and Entrepreneurship Scaling Project (P168577) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 4/26/2022 Page 8 of 8