Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
KG Financial Sector Development Project (P125689)
EUROPE AND CENTRAL ASIA | Kyrgyz Republic | Finance, Competitiveness and Innovation Global Practice |
IBRD/IDA | Investment Project Financing | FY 2012 | Seq No: 12 | ARCHIVED on 29-Jan-2018 | ISR30058 |
Implementing Agencies: Ministry of Finance, Kyrgyz Post Office, National Bank of the Kyrgyz Republic
Key Dates
Key Project Dates
Bank Approval Date:08-Mar-2012 Effectiveness Date:25-Dec-2013
Planned Mid Term Review Date:31-Mar-2016 Actual Mid-Term Review Date:31-Mar-2016
Original Closing Date:30-Jun-2017 Revised Closing Date:30-Jun-2018
Project Development Objectives
Project Development Objective (from Project Appraisal Document)
Project Development Objectives are to: (i) enhance financial sector stability, and (ii) increase access to financial services.
Has the Project Development Objective been changed since Board Approval of the Project Objective?
No
PHRPDODEL
Components
Name
Strengthening the legal, regulatory, and supervisory framework for banks, MFOs, and credit unions:(Cost $1.50 M)
Enhancing financial services via KPOs network:(Cost $5.55 M)
Modernizing the secured transactions and debt resolution regime:(Cost $1.00 M)
Project coordination and monitoring:(Cost $0.80 M)
Overall Ratings
Name Previous Rating Current Rating
Progress towards achievement of PDO Moderately Unsatisfactory Moderately Unsatisfactory
Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Unsatisfactory
Overall Risk Rating High High
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Public Disclosure Copy
Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
Implementation Status and Key Decisions
The Progress towards achievement of PDO and Implementation Progress (IP) stays at Moderately Unsatisfactory. Although there has been significant
progress in the procurement process, it is yet too early for an upgrade of the ratings given that progress made on critical procurement is not yet
considered irreversible.
NBKR (implementing agency of component 1) was downgraded from Moderate Satisfactory to Moderate Unsatisfactory which was communicated in
Aide - Memoire of July 4, 2017 to client. This was not reflected in the system yet. It therefore seems that the NBKR was downgraded as part of this ISR,
but it was actually already downgraded mid 2017. In August 2017 the NBKR met a milestone set by the World Bank team. It finished (the revision of) the
bidding document to procure a key IT system. They are currently in the process of evaluation of the bids. It is expected that the contract will be awarded
in the first quarter of 2018.
KPO (implementing agent of component 2) finished in December 2017 the bidding document for the envisioned IT solution and started the bidding
process. This was an important milestone set by the World Bank team. It is expected that the contract will be awarded at the end of the first quarter of
2018.
CCRO (implementing agency of component 3) did successfully implement the online registration system. This warrants the Satisfactory rating.
As soon as the contracts for the procurement of an IT system have been awarded by both NBKR and KPO, a new ISR (expected end of the first quarter
of 2018) will revisit the current IP ratings with a very likely upgrading to Moderate Satisfactory if supplemented by progress on financial management
and financial services. This will also warrant the request an approval for a 2 year extension of the project (level 2 restructuring).
The authorities are committed to implement the project and achieve the project development objectives.
Risks
Systematic Operations Risk-rating Tool
Risk Category Rating at Approval Previous Rating Current Rating
Political and Governance -- Substantial Substantial
Macroeconomic -- Moderate Moderate
Sector Strategies and Policies -- Moderate Moderate
Technical Design of Project or Program -- High High
Institutional Capacity for Implementation and
Sustainability
-- High High
Fiduciary -- Substantial Substantial
Environment and Social -- Low Low
Stakeholders -- High High
Other -- -- --
Overall -- High High
Results
Project Development Objective Indicators
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Public Disclosure Copy
Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
PHINDPDOTBL
Legal, regulatory, and supervisory framework following international good practice to enhance stability is developed, adopted,
and implemented (Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 0.00 0.00 12.00
Date 01-Dec-2011 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
Implementation progress of the underlying activity for the measurement of this indicator does net yet allow for indicator validation. In
addition, this indicator is outdated, and will be revised in case a two-year extension of the project will be approved.
It is noteworthy that NBKR is also benefitting from TA funded by SECO (TF of Swiss government). On December 6, 2017 SECO
extended its own project by 4 years until end 2021 and provided additional finance of USD 3.2M. The activities that receive SECO-funded
TA are bank supervision and regulation, non-bank supervision and regulation, crisis preparedness and contingency planning, deposit
protection, and market conduct supervision.
PHINDPDOTBL
Number of new annual registrations in the secured transactions registry, using moveable assets as collateral (alone or in
combination with immoveable collateral) (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 -- -- 20.00
Date 31-Dec-2011 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
This result indicator is needs to be recalibrated (if the project gets an approval for a two year extension (level 2 restructuring)) given that the
registration of collateral is made voluntary since 2017 (whereas it was mandatory before since 2006). This means that the baseline of
36.000 registrations in 2011 went back to 9.000 registrations in the first 3 quarters of 2017. Despite the fact that the on-line registration was
successfully implemented in January 2017. Besides creating awareness with the financial institutions and the public, this result indicator
should be recalibrated.
PHINDPDOTBL
Number of transactions going through KPO related to financial services (Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 10,000,000.00 -- -- 17,000,000.00
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Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
Date 15-Dec-2012 -- 11-Jan-2018 30-Jun-2018
Comments
Implementation progress of the underlying activity for the measurement of this indicator does not yet allow for indicator validation. Likely the
baseline is outdated given that it was determined in 2012. If the project will get an approval for a two-year extension (level 2 restructuring)
the result indicator will be updated, including the baseline and end target value.
Overall Comments
All PDO indicators will be revisited as part of an envisaged level 2 restructuring.
Intermediate Results Indicators
PHINDIRITBL
Adoption of modern supervision methods (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
The NBKR is well
advanced in the
implementation of the
new risk based
Supervisory framework This result indicator is supervisory approach. Implementation
Value lacking modern outside the scope of Eighty percent of the of Pillar 2 and 3
supervision methods this IPF. banking sector are now of Basel II
supervised according to
the new methodology.
Though the NBKR is still
in the learning phase.
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
PHINDIRITBL
Upgraded ICT system (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
The NBKR is in the
process of evaluating No incident of
The procurement of the
the three bids for the supervisory
IT system for NBKR is
Value No development and setback for
put on hold. See Aide-
implementation of the want of IT
memoire for details.
Information Analytical support.
System..
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
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Public Disclosure Copy
Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
PHINDIRITBL
Contingency planning and crisis management framework (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
In the course of 2017 a
new banking law was
adopted. Although there
are still some
weaknesses in this
banking law (e.g. court No systemic
This result indicator is can overturn decision of crisis that was
Value No outside the scope of supervisor to withdraw not adequately
this IPF. bank license) it allows addressed in
strengthening of the time.
regulatory and
operational framework
that is key for crisis
preparedness and
contingency planning.
Date 15-Jan-2012 21-Feb-2014 11-Jan-2018 30-Jun-2018
PHINDIRITBL
Improved staff capacity, measured in terms of number of years of staff experience in supervision departments (Number,
Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 2.00 2.00 2.00 4.50
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
No new data on this indicator.
PHINDIRITBL
Number of ICT-equipped Post Offices (with installed, operational front office cash terminals) connected to the central hub
(Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 0.00 0.00 360.00
Date 01-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
KPO is in the process of procurement of Information Technology. The bidding process started mid December 2017.
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Public Disclosure Copy
Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
PHINDIRITBL
Revenues from non-government transactions as a share of total KPO revenues from financial services (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 15.00 8.60 8.60 20.00
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
KPO drafted mid July 2017 the first draft of new business plan with the help of financial services consultants. It is too early to measure the
share of revenues from non-governmental transactions. Moreover the envisioned Information Technology needed to support the revenues
from non-governmental transactions, is not yet procured.
PHINDIRITBL
Improved quality, reliability and cost-efficiency of small value payments operations, measured in terms of same day Straight
Through Processing as a share of total transactions to&from bank accounts (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0% -- 0% >30%
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
It is too early to measure this indicator because the needed Information Technology is not yet procured and therefore not implemented.
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Public Disclosure Copy
Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
PHINDIRITBL
Enhanced transparent financial performance (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
This part of the project
KPO set-up the IFRS
is in progress. It is
financial statements of
expected to have the
2016 , and launched on
financial statements of
October 26, 2017 the
2016 ready by mid Annual audited
Value No tender to procure the
2017 (and based on statements
independent auditor.
IFRS in third quarter of
Evaluation of the bidding
2017). Budget figures
process is shortly
of 2017 are expected
expected.
any moment.
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
PHINDIRITBL
Introduction of performance measurement, in terms of accounting reports with separated profitability and risk analysis for
financial services and postal services (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
This part of the project
is in progress. It is
expected to have the
financial statements of KPO recently started
2016 ready by mid with support of the FM Monthly
Value 0.00
2017 (and based on consultant to pilot an financial reports
IFRS in third quarter of ERP.
2017). Budget figures
of 2017 are expected
any moment.
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
Also this indicator depends on the procurement of the Information Technology including software for Financial Management currently under
procurement.
PHINDIRITBL
Number of cashiers, tellers, postmasters and other operational staff completed NBKR training to operate financial services at
KPO (Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 0.00 0.00 1,200.00
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
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Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
It is too early to measure this indicator because the needed Information Technology to support the offering of financial services in the post
offices is not yet procured and therefore not implemented.
PHINDIRITBL
Enhanced competitive outreach for last mile delivery of remittances, measured in terms of market share of KPO in total
remittances (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 0.00 0.00 2.00
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
It is too early to measure this indicator because the needed Information Technology that supports the remittances business is not yet
procured and therefore not implemented.
PHINDIRITBL
Amended legal framework for moveable collateral and debt resolution regimes (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value No yes yes Yes
Date 15-Jan-2012 18-Apr-2017 18-Apr-2017 30-Jun-2018
Comments
Important to note is that the registration changed from mandatory registration to a system of voluntary registration.
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Public Disclosure Copy
Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
PHINDIRITBL
Issued regulations for the well-functioning of the collateral registry (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value No yes yes Yes
Date 15-Jan-2012 18-Apr-2017 18-Apr-2017 30-Jun-2018
PHINDIRITBL
Online system for registering collateral is operational (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value No online system yes yes Yes
Date 15-Jan-2012 18-Apr-2017 18-Apr-2017 30-Jun-2018
PHINDIRITBL
Number of dissemination and capacity-building and training events held (Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 0.00 0.00 6.00
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 28-Feb-2017
Comments
Focus of the coming half year is to organize capacity and training events as part of awareness campaign.
PHINDIRITBL
Increase in lending based on new registration of security interests in the registry, using moveable assets as collateral
(Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 -- -- 20.00
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 28-Feb-2017
Comments
There is no data on this yet.
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Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
PHINDIRITBL
Increase in the debt recovery rate for creditors (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
30 cents on the
To be measured at end- dollar of 4% of
Value -- --
2011 insolvent
companies
Date 15-Jan-2012 18-Apr-2017 11-Jan-2018 30-Jun-2018
Comments
There is no data on this yet.
Overall Comments
There is limited movement on result indicators because component 1 and 2 are still in the phase of procurement.
The results of component 3 are lower than expected because the registration of collateral changed from mandatory to voluntary registration. In
addition, there was an economic downturn.
The result frame will be updated/revised as part of the envisaged level 2 restructuring.
Data on Financial Performance
Disbursements (by loan)
Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed
P125689 IDA-50670 Effective USD 7.15 4.03 3.12 0.12 3.49 3.3%
P125689 IDA-H7600 Effective USD 5.85 4.92 0.93 2.53 2.13 54%
Key Dates (by loan)
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Public Disclosure Copy
Public Disclosure Copy
The World Bank Implementation Status & Results Report
KG Financial Sector Development Project (P125689)
Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date
P125689 IDA-50670 Effective 08-Mar-2012 11-Jul-2013 25-Dec-2013 30-Jun-2017 30-Jun-2018
P125689 IDA-H7600 Effective 08-Mar-2012 11-Jul-2013 25-Dec-2013 30-Jun-2017 30-Jun-2018
Cumulative Disbursements
Restructuring History
Level Approved on 21-May-2013
Related Project(s)
There are no related projects.
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