The World Bank Implementation Status & Results Report DRC:Financial Infrastructure and Markets (P145554) DRC:Financial Infrastructure and Markets (P145554) AFRICA | Congo, Democratic Republic of | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2014 | Seq No: 9 | ARCHIVED on 13-Mar-2019 | ISR35757 | Implementing Agencies: Ministry of Finance, Central Bank of Congo, FPM ASBL, FPM SA, Ministry of Finance Key Dates Key Project Dates Bank Approval Date: 18-Mar-2014 Effectiveness Date: 03-Sep-2014 Planned Mid Term Review Date: 15-Sep-2017 Actual Mid-Term Review Date: 05-Jun-2017 Original Closing Date: 31-Dec-2020 Revised Closing Date: 31-Dec-2020 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to modernize payments infrastructure and increase availability of term financing to Micro, Small and Medium Enterprises (MSMEs). Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Modernization of Payments Infrastructure for Inclusive Finance:(Cost $10.73 M) Component 2: Technical Support to Financial Market Development:(Cost $7.05 M) Component 3: Line of Credit for Medium to Long Term Finance:(Cost $11.22 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Unsatisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions Following the restructuring of the project in June, 2018 and the implementation mission in August 13-17, 2018, there has been steady progress in implementation not only of the Line of credit component but of all the components of the project. With regard to the Line of Credit in particular, the Central Bank of Congo (BCC) was selected as the intermediary financial institution to implement the second phase of the Line of Credit. The BCC is in turn selecting participating financial institutions. The following is a summary of implementation progress to date: Component 1 Modernization of Payments Infrastructure for Inclusive Finance Modernization of the DRC's payment system is progressing satisfactorily: the construction of the interbank communication network and operational tests have been completed; the acquisition and installation of computer software and hardware for the multi-currency automated transfer system 3/13/2019 Page 1 of 7 The World Bank Implementation Status & Results Report DRC:Financial Infrastructure and Markets (P145554) (ATS) and a central securities depository (CSD) have also been completed and operationalized albeit only with transactions in the Congolese Franc. Following a study visit to the central bank of Lebanon (from 5 to 9 November 2018) by a joint delegation of officials of the Ministry of Finance, the Central Bank of Congo and the Congolese Association of Banks that enabled the Project team to finalize the operationalization of transactions in foreign currencies which became effective from March 04, 2019. Following a Level II restructuring, funds were reallocated to complete the acquisition of a national interbank electronic payment switch which would enhance interoperability by enabling the routing of authorizations, the clearing of payment transactions and the withdrawal by domestic interbank cards, etc. Negotiations are on-going amongst stakeholders (banks, MFIs, Savings and loans cooperatives, Mobile Money Operators, etc.) for the creation of the company, SMIC, that shall manage the SWITCH. This is expected to be accomplished by April 2019. Component 2. Capacity building activities for cooperatives and MFI is intensifying through FPM ASBL. Advisory activities to the Central bank will continue in 2019 to update the regulatory framework and complete implementation of the risk-based supervisory framework. Several technical assistance experts have been hired to support these activities. Component 3, Implementation of the pilot phase of the line of credit is ongoing. The Ministry of Finance and the BCC have finalized negotiations for the latter to implement the second phase of the line of credit via the creation of a refinancing window at the BCC. The Central Bank of Congo has set up the team managing the Refinancing Window and this team has selected and contracted eligible participating financial institutions (PFIs) to implement the second phase of the line of credit. Some of the selected participating financial institutions have received funds and can start to extend loans to qualified MSMEs as early as March 2019. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- High High Macroeconomic -- High High Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Substantial Substantial Institutional Capacity for Implementation and Sustainability -- Substantial Substantial Fiduciary -- Substantial Substantial Environment and Social -- Moderate Moderate Stakeholders -- Substantial Substantial Other -- -- -- Overall -- Substantial Substantial Results PDO Indicators by Objectives / Outcomes Modernize payments Infrastructure IN00661886 ►Number of annual transactions through the Real Time Gross Settlement System (RTGS) in USD (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 70,800.00 3/13/2019 Page 2 of 7 The World Bank Implementation Status & Results Report DRC:Financial Infrastructure and Markets (P145554) Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 The operationalization of transactions in Foreign currencies became effective from march 04, 2019. Going forward, the number of annual transactions through the Real Time Gross Settlement System (RTGS) in Comments: USD is going to be measurable. IN00661888 ►Number of annual transactions through the Real Time Gross Settlement System (RTGS) in CDF (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 74,799.00 92,412.00 144,216.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 IN00661890 ►Number of annual transactions through the Automated Clearing House (ACH) made in CDF (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 80,430.00 103,927.00 458,080.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 IN00661891 ►Number of annual transactions through the Automated Clearing House (ACH) made in USD (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 6,352,666.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 Transactions in US dollars (USD) are only going to commence through the Automated Clearing House Comments: (ACH) at the beginning of March 2019. Increase availability of term financing to Micro, Small and Medium Enterprises (MSMEs). IN00661887 ►Share of women-owned MSMEs that received a loan through the Project (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 48.00 11.86 50.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 In the implementation of the second phase of the project, some of the beneficiary IFPs such as IFOD target female MSMEs and Self-Help-Groups (70 percent of their credit portfolio), which foresees an increase both in the number of MSMEs that shall benefit from loans under the line of credit and also the percentage of women-owned MSMEs. Comments: The previously entered percentage of Share of women-owned MSMEs that received a loan through the Project was erroneous. The Team has called on the PIU to be more diligent in the collection and transmission of data from the IFI & PFIs. IN00661889 ►Number of MSMEs that received a loan through the Project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 3/13/2019 Page 3 of 7 The World Bank Implementation Status & Results Report DRC:Financial Infrastructure and Markets (P145554) Value 0.00 48.00 59.00 2,500.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 Intermediate Results Indicators by Components Component 1: Modernization of Payments Infrastructure for Inclusive Finance IN00661892 ►Number of financial institutions and mobile network operators connected to the Switch (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 16.00 2.00 23.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 While the SWITCH has been installed, it is not yet functional and only 2 financial institutions have been connected for the purposes of running tests on the functionality of the system. The previously reported number of 16 was erroneous as this represents instead the number of operational Comments: banks in good standing with the Central Bank in the DRC. IN00661895 ►Number of banks and other financial institutions connected to the ATS/CSD of the National Payment System (NPS) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 22.00 16.00 22.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 The number of banks and other financial institutions connected to the ATS/CSD of the National Payment System (NPS) are only banks in good standing with the Central Bank of Congo. Thus banks that are Comments: under administration are not included. The number of 22 was erroneous. IN00661897 ►A National Payments Card Retail Switch company is established (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes No Yes Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 IN00661899 ►A National Payment System (NPS) Department is operational (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 IN00661901 ►An Automated Transfer System (ATS) is operational (Yes/No, Custom) 3/13/2019 Page 4 of 7 The World Bank Implementation Status & Results Report DRC:Financial Infrastructure and Markets (P145554) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 Component 2: Technical Support to Financial Market Development IN00661893 ►Portfolio review of SOFIDE completed (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 IN00661896 ►Portfolio at Risk - Microfinance and cooperatives (%) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 12.40 31.70 20.00 9.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 IN00661898 ►Percentage of MFIs and cooperatives having provided information on Portfolio at Risk (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 87.80 100.00 82.35 95.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 The drop in the percentage of MFIs and cooperatives having provided information on Portfolio at Risk Comments: experienced a drop due to the late provision of the data to the Central Bank by some MFIs. IN00661900 ►Percentage of MFIs and cooperatives providing quarterly regulatory financial statements (Balance Sheets and Profit/Loss Accounts) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 82.40 100.00 82.35 90.00 Date 31-Dec-2014 19-Oct-2018 21-Feb-2019 31-Dec-2020 Component 3: Line of Credit for Medium to Long Term Finance IN00661894 ►Volume of disbursed loans through the Project (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 3,000.00 3,840,000.00 24,000,000.00 Date 31-Dec-2014 19-Oct-2018 08-Mar-2019 31-Dec-2020 Comments: The initial pilot phase was US$ 3 million. 3/13/2019 Page 5 of 7 The World Bank Implementation Status & Results Report DRC:Financial Infrastructure and Markets (P145554) The second phase of the line of credit has become effective and disbursements started in early march of US$ 840,000. It is expected that on processing pending applications from other PFIs, the BCC should be able to disburse 50 percent of the line of credit by end of March 2019. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P145554 IDA-H9260 Effective USD 30.00 30.00 0.00 19.38 8.10 71% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145554 IDA-H9260 Effective 18-Mar-2014 03-Apr-2014 03-Sep-2014 31-Dec-2020 31-Dec-2020 Cumulative Disbursements 3/13/2019 Page 6 of 7 The World Bank Implementation Status & Results Report DRC:Financial Infrastructure and Markets (P145554) Restructuring History Level 2 Approved on 01-Aug-2016 ,Level 2 Approved on 06-Jun-2018 Related Project(s) There are no related projects. 3/13/2019 Page 7 of 7