The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) Access to Finance for MSMEs (P152307) LATIN AMERICA AND CARIBBEAN | Jamaica | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 7 | ARCHIVED on 26-Jul-2021 | ISR46878 | Implementing Agencies: Ministry of Finance and the Public Service, The Development Bank of Jamaica Key Dates Key Project Dates Bank Approval Date: 29-Jan-2018 Effectiveness Date: 29-May-2018 Planned Mid Term Review Date: 01-Jun-2021 Actual Mid-Term Review Date: 01-Jul-2021 Original Closing Date: 30-Jan-2023 Revised Closing Date: 30-Jan-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to improve access to finance for micro, small, and medium enterprises (MSMEs). Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Enhancement of the Credit Enhancement Facility (CEF):(Cost $5.55 M) Establishment of an SME Fund:(Cost $7.00 M) Improvement of enabling environment for access to finance and Business Development Services for MSMEs:(Cost $1.56 M) Project management:(Cost $0.85 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions Project implementation is progressing well. The Credit Enhancement Facility (CEF) supported by the project remains a relevant mechanism to incentivize lenders to provide working capital and investment loans financing to SMEs.. The new portfolio scheme began operating in January 2020 and has signed portfolio guarantee agreements with eleven approved financial intermediaries (AFIs) since then. From January 2020 and June 30, 2021, the CEF approved 303 loan guarantees valued at J$3.07 billion with a total guaranteed amount of J$1.67 billion. In addition, the project aims to support the establishment and the capitalization of an SME Fund for risk capital financing to SMEs along with supporting the enabling legal, regulatory and taxation environment for the private equity and venture capital industry. The component responds to the objectives of the GoJ and the DBJ to increasingly give focus not only to facilitating access to credit, but also access to equity, in an effort to provide long term patient financing solutions for new and existing businesses. Technical assistance activities including to review the legal, 7/26/2021 Page 1 of 5 The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) regulatory and taxation framework for private equity have been completed. A fund manager has been selected and the launch of the SME equity fund is expected in 2021 after the completion of the fund-raising process from co-investors. The reverse factoring platform has been developed and is expected to launch shortly. The project is also planning to support capacity building and awareness raising towards banks, private sector and broader stakeholders on the instruments to promote the uptake of the reverse factoring product. A software developer has been selected to design the voucher for technical assistance platform and is expected to deliver it on December 2021. Procurement: Out of the 23 procurement activities currently envisaged in the Project Procurement Plan (PP), sixteen contracts (70%) have already been completed, six contracts (26%) have been signed and are currently under execution, while the most important project contract (4%) - which relates to the establishment of the SME Fund - is about to be signed. The Procurement rating for the Project continues to be Satisfactory. Financial management: The project’s financial management arrangements continue to be adequate and enable the DBJ to generate timely and reliable financial information on implementation. The project continues to maintain a Satisfactory FM rating. Environmental and social (E&S) safeguards: The AFIs are currently monitoring and reporting on E&S aspects via the CEF MIS. The annual E&S safeguards report was provided on May 28th, 2021 and provides sufficient information to track safeguards related activity. The project continues to maintain and monitor a project level grievance redress mechanism (GRM) which is able to receive and resolve complaints in a timely manner, although none have been received to date. The project continues to maintain a Satisfactory Safeguards rating Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Moderate Moderate Macroeconomic High Substantial Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Substantial Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes The PDO is to improve access to finance for micro, small and medium enterprises (MSMEs) IN00997790 ►Number of SMEs getting access to risk capital through the SME Fund (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 7/26/2021 Page 2 of 5 The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) Value 0.00 0.00 0.00 15.00 Date 29-Jan-2018 30-Nov-2020 30-Jun-2021 30-Jan-2023 IN00997791 ►Number of guarantees issued for MSME loans through the improved CEF (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 78.00 549.00 735.00 1,178.00 Date 29-Jan-2018 30-Nov-2020 30-Jun-2021 30-Jan-2023 Intermediate Results Indicators by Components Enhancement of the Credit Enhancement Facility (CEF) IN00997794 ►Improvements of the DBJ's institutional capacity in credit risk management of AFIs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target A Risk Enterprise A Risk Enterprise Management Software Management Software System (REMSS) is System (REMSS) is now now Installed and Installed and operationalized at the The DBJ has operationalized at the DBJ to monitor the risk The DBJ has limited adequate systems and DBJ to monitor the risk rating for AFIs and will institutional capacity to expertise in place to Value rating for AFIs and will allow more efficient scale sustainably the scale and manage the allow more efficient reporting to the DBJ. CEF's operations. CEF, in a sustainable reporting to the DBJ. 12 Training and technical manner. Partner Financial assistance has been Institutions signed with provided to strengthen CEF to offer guarantees DBJ staff’s expertise in to MSMEs credit risk management. Date 29-Jan-2018 30-Nov-2020 30-Jun-2021 30-Jan-2023 IN00997797 ►Volume of guarantees provided to MSME loans (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4,412,800.00 25,557,759.47 34,664,906.00 135,954,685.00 Date 29-Jan-2018 30-Nov-2020 30-Jun-2021 30-Jan-2023 Establishment of an SME Fund IN00997793 ►Private capital mobilized (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target 7/26/2021 Page 3 of 5 The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) Value 0.00 0.00 0.00 10,000,000.00 Date 29-Jan-2018 30-Nov-2020 30-Jun-2021 30-Jan-2023 Establishment of Fund delayed because of global pandemic. Expected FY21. Comments: IN00997796 ►Volume of risk capital provided to SMEs (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 11,500,000.00 Date 29-Jan-2018 30-Nov-2020 30-Jun-2021 30-Jan-2023 Establishment of the SME Equity Fund delayed because of global pandemic. Expected FY21. Comments: Improvement of enabling environment for access to finance and Business Development Services for MSMEs IN00997792 ►Percentage of beneficiaries that feel project activities reflected their needs (Citizen Engagement Indicator) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 80.00 75.00 Date 29-Jan-2018 30-Nov-2020 30-Jun-2021 30-Jan-2023 IN00997795 ►New business development service platform operational (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 29-Jan-2018 30-Nov-2020 30-Jun-2021 30-Jan-2023 Procurement of Interactive technological platform – BDS & MSMEs (Procurement Underway- awaiting Comments: Public Procurement Commission approval) Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P152307 IBRD-88220 Effective USD 15.00 15.00 0.00 6.93 8.07 46% 7/26/2021 Page 4 of 5 The World Bank Implementation Status & Results Report Access to Finance for MSMEs (P152307) Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P152307 IBRD-88220 Effective 29-Jan-2018 02-Mar-2018 29-May-2018 30-Jan-2023 30-Jan-2023 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 7/26/2021 Page 5 of 5