The World Bank Report No: ISR3919 Implementation Status & Results Armenia Public Disclosure Copy Access to Finance for Small and Medium Enterprises (P115109) Operation Name: Access to Finance for Small and Medium Enterprises Project Stage: Implementation Seq.No: 4 Status: ARCHIVED Last Modified Date: 30-Jun-2011 (P115109) Country: Armenia Approval FY: 2009 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Financial Intermediary Loan Implementing Agency(ies): Central Bank of Armenia Key Dates Board Approval Date 24-Feb-2009 Original Closing Date 28-Sep-2011 Planned Mid Term Review Date 15-Sep-2010 Last Archived ISR Date 15-Jan-2011 Effectiveness Date 16-Apr-2009 Revised Closing Date 31-Dec-2012 Actual Mid Term Review Date 15-Nov-2010 Project Development Objectives Project Development Objective (from Project Appraisal Document) To maintain or increase Armenian small and medium enterprises' access to medium term finance. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Credit line 50.00 Overall Ratings Previous Rating Current Rating Public Disclosure Copy Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Implementation Status Overview Through the AFSME facility the Bank responded to a request from the Central Bank of Armenia (CBA) and the Armenian Government to establish a credit line to mitigate the impact of the global financial crisis on rapidly deteriorating economic situation in the country. During two years of implementation the project has advanced towards achieving its development objective through providing access to medium-term finance for participating financial institutions, thus improving the access to finance for domestic SMEs. The project is progressing towards achieving the development results by providing mid-term financing to SMEs in Armenia. As of end-May 2011 about 2,000 loans have been provided SMEs operating in trade, services, production and agricultural sectors for investment and working capital needs. Cumulatively, SMEs have received more than USD 30 million through the revolving credit line. SME lending is provided through 9 banks and 1 non-bank financial institution; four new PFIs joined the project only in recent weeks, Page 1 of 4 The World Bank Report No: ISR3919 suggesting demand is slated to rise further throughout the remainder of the project life. Public Disclosure Copy The implementation support team believes that overall PFIs have a better grasp of the AFSME project requirements, as the quality of loan files has improved as demand for the AFSME facility has markedly increased from late 2010 onwards. In general, the participating banks were found to be operating in line with the AFSME project requirements. During the May 2011 mission the team held a wrap-up meeting with the Chairman of the CBA, Director of the GAFPMU and other senior CBA officials wherein further improvements to the POM were discussed to enhance the performance of the Project. Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Cumulative amount of medium term credit Amount(USD) Value 0.00 30715408.30 50000000.00 granted by the PFIs under the project (including revolving funds) Date 16-Apr-2009 31-May-2011 31-Dec-2012 Comments This is the same as the It is expected the entire Cumulative amount of the AFSME facility will be credit line disbursed to SMEs disbursed by project end. by the PFIs. Utilization of revolving funds can better be estimated in the last year of the project. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Number of non-performing SME loans (more Percentage Value 7.57 6.40 5.00 than 30 days delinquent) / total number of loans (NPLs defined by CBA as Category II, III Date 16-Apr-2009 30-Apr-2011 31-Dec-2012 and IV loans) Comments SMEs for the entire banking Number of non-performing system. loans to total loans for all banking system Cumulative amount of the credit line disbursed Amount(USD) Value 0.00 30715408.30 50000000.00 Public Disclosure Copy to SMEs by the PFIs from the original proceeds of the Credit Date 16-Apr-2009 31-May-2011 31-Dec-2012 Comments Non-performing loans (more than 30 days Percentage Value 7.00 0.60 5.00 delinquent) / total loans Date 15-Sep-2009 29-Apr-2011 31-Dec-2012 Comments NPL level for all banks NPLs on loans advanced by PFIs under the AFSME project Page 2 of 4 The World Bank Report No: ISR3919 Indicator Name Core Unit of Measure Baseline Current End Target Cumulative number of SMEs financed by the Number Value 0.00 1981.00 2500.00 Public Disclosure Copy PFIs from the original proceeds of the Credit Date 16-Apr-2009 31-May-2011 31-Dec-2012 Comments Volume of Bank Support: Lines of Credit - SME Amount(USD) Value 0.00 30000000.00 50000000.00 Date 16-Apr-2009 30-Nov-2010 28-Sep-2011 Comments Disbursed to the client#s designated account. Outstanding SME Loan Portfolio Amount(USD) Value Date 31-May-2011 28-Sep-2011 Comments SME data is not consistently available as the CBA does not mandate its separate reporting. No of active loan accounts -SME Number Value Date 31-May-2011 28-Sep-2011 Comments SME data is not consistently available as the CBA does not mandate its separate reporting. Return on Assets (ROA) of PFIs Percentage Value 2.40 Date 31-Mar-2011 Comments Portfolio at Risk (PAR) of PFIs Percentage Value 1.20 Public Disclosure Copy Date 31-Mar-2011 Comments For PFIs' total loan portfolio. Data on Financial Performance (as of 29-Apr-2011) Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P115109 IBRD-76570 Effective 24-Feb-2009 26-Feb-2009 16-Apr-2009 31-Dec-2012 Disbursements (in Millions) Page 3 of 4 The World Bank Report No: ISR3919 Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P115109 IBRD-76570 Effective USD 50.00 50.00 0.00 30.13 19.88 60.00 Public Disclosure Copy Disbursement Graph Key Decisions Regarding Implementation None. Restructuring History Level two Approved on 10-Mar-2011 Public Disclosure Copy Related Projects There are no related projects. Page 4 of 4