The World Bank Implementation Status & Results Report
Financial Sector Support Project (P151816)
Financial Sector Support Project (P151816)
AFRICA EAST | Kenya | Finance, Competitiveness and Innovation Global Practice |
IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 13 | ARCHIVED on 30-Sep-2021 | ISR47675 |
Implementing Agencies: Republic of KENYA, Directorate of Budget & Fiscal & Economic Affairs
Key Dates
Key Project Dates
Bank Approval Date: 30-Apr-2015 Effectiveness Date: 10-Jul-2015
Planned Mid Term Review Date: 28-Feb-2018 Actual Mid-Term Review Date: 19-Feb-2018
Original Closing Date: 31-Jul-2020 Revised Closing Date: 31-Dec-2021
pdoTable
Project Development Objectives
Project Development Objective (from Project Appraisal Document)
The project's development objective is to strengthen the legal, regulatory and institutional environment for improved financial stability, access to and
provision of, affordable and long term financing.
Has the Project Development Objective been changed since Board Approval of the Project Objective?
No
Components Table
Name
Component 1: Strengthening Institutions:(Cost $23.30 M)
Component 2: Enabling Efficient Financial Intermediation:(Cost $6.40 M)
Component 3: Mobilizing Long-Term Finance:(Cost $5.30 M)
Component 4: Supporting Project Management:(Cost $1.30 M)
Contingency:(Cost $0.70 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 Financial Sector Support Project (FSSP) became effective on July 10, 2015, with an expected closure date of April 2021. FSSP was built on
previous financial sector reforms and gains realized through the Financial and Legal Sector Technical Assistance Project (FLSTAP). The project
development objective is to strengthen the legal, regulatory and institutional environment for improved financial stability, access to and provision of,
affordable and long-term financing. The FSSP project is expected to support Kenyan financial sector authorities in further developing regulatory and
supervisory frameworks that continue to be effective in mitigating the new risks associated with the financial sector’s rapid development, deepening
expansion across sectors, and across borders. It supports the upgrade of the supervisory, regulatory, and institutional framework to keep pace with
more complex markets and products with the overall objective of enhancing stability.
9/30/2021 Page 1 of 7
The World Bank Implementation Status & Results Report
Financial Sector Support Project (P151816)
FSSP’s project components and key interventions include:
Component 1: Strengthening Financial Institutions
This component focuses on the overarching reform, modernization, and capacity support to the financial sector institutional framework. This
component delivers technical assistance to the various beneficiaries, mostly in the form of consultancies, to design roadmaps and action plans, and
implementation support to realize the planned reforms. It also supports the upgrade of IT systems and delivers capacity support to ensure a more
effective functioning of the financial architecture.
Under this component, the project has primarily assisted financial sector regulators in strengthening their supervision and surveillance systems,
through both IT upgradation and advisors and technical assistance on the implementation of risk-based supervision; and helped develop
frameworks for deposit guarantees and deposit insurance for the non-bank sectors. Beneficiaries of this component include the Central Bank of
Kenya (CBK), the Insurance Regulatory Authority (IRA), the SACCO Societies Regulatory Authority (SASRA), the Kenya Deposit Insurance
Corporation (KDIC) and the Capital Markets Authority (CMA)
Component 2: Enabling Efficient Financial Intermediation
This component accelerates the financial inclusion agenda in the Republic of Kenya with a focus on strengthening financial infrastructure and
making more transparent the pricing of financial intermediation (savings and lending) so that more businesses and individuals have access to
affordable financial products. The component supports consultancies, training and IT purchases.
Under this component, the Project has committed to support the implementation of a collateral registry system, and provide technical assistance in
shoring up the legal and regulatory framework for movable property. Additionally, the Project is supporting strengthening of the Insolvency
Framework through technical assistance, and providing assistance in assessing and strengthening the credit reporting system in Kenya. Key
beneficiaries under this component include the Office of the Attorney General, and National Treasury.
Component 3: Increasing Availability of Long-term Finance
This component focuses on strengthening the demand for and supply of long-term funds so that Kenya’s growing development finance needs for
long-term projects in infrastructure, housing, etc. can be met. The component includes support via consultancies, training and IT purchases.
Under this component, the Project is supporting the development of a range of products for long term finance, including around informal pensions,
new capital market products, and new insurance products. Additionally, this component will assist regulators in upgrading systems and modernizing
financial infrastructure for issuing long term debt. Key beneficiaries include the National Treasury – Public Debt Management Office (PDMO).
Retirement Benefits Authority (RBA), Insurance Regulatory Authority (IRA), Capital Markets Authority (CMA), and Central Bank of Kenya (CBK).
Risks
Systematic Operations Risk-rating Tool
Risk Category Rating at Approval Previous Rating Current Rating
Political and Governance Substantial Moderate Moderate
Macroeconomic Moderate High High
Sector Strategies and Policies Moderate Moderate Moderate
Technical Design of Project or Program Moderate Moderate Moderate
Institutional Capacity for Implementation and
Low Low Low
Sustainability
Fiduciary Moderate Moderate Moderate
Environment and Social Low Low Low
Stakeholders Low Low Low
Other -- -- --
Overall Moderate Moderate Moderate
9/30/2021 Page 2 of 7
The World Bank Implementation Status & Results Report
Financial Sector Support Project (P151816)
Results
PDO Indicators by Objectives / Outcomes
Improved financial stability
IN01021652
►Implement Kenya Deposit Insurance Corporation (KDIC) bank resolution/crisis management operational framework (Yes/No, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value No Yes Yes Yes
Date 24-Aug-2018 31-Dec-2020 30-Jun-2021 30-Apr-2021
Indicator changed from progress towards achieving compliance with Essential Criteria of Basel Core
Comments: Principles.
Enabling effecient intermediation
IN01021590
►Reduced net interest margin (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value No Yes Yes Yes
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
Enhanced access to long term financing
IN01021651
►Long-term assets held by pension funds (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 47.00 50.00 50.00 52.00
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
Intermediate Results Indicators by Components
Strengthening institutions
IN01021657
►Crisis simulation training and practice sessions undertaken regularly to activate KDIC operational framework for crisis management
(Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 1.00 1.00 3.00
9/30/2021 Page 3 of 7
The World Bank Implementation Status & Results Report
Financial Sector Support Project (P151816)
Date 05-Nov-2018 31-Dec-2020 30-Jun-2021 30-Apr-2021
One (1No.) training was held in December 2015 where 30 officers drawn from the Financial Sector
Regulators were trained.
Indicator changed from Mapping exercise of Financial Conglomerates.
Comments: The contract with the Toronto Center to support KDIC undertake crisis simulation training and practice
sessions could not be signed due to disruptions caused by travel restrictions related to the COVID-19
pandemic.
IN01021659
►Number of MDAs services using electronic payment instruments (Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 312.00 341.00 1,500.00
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
Enabling Effecient Financial Intermediation
IN01021653
►Depth of credit information index (Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 8.00 8.00 3.00
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
IN01021655
►Increase in banked retail investor Accounts (MAkiba) (Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 15,000.00 580,020.00 582,572.00 150,000.00
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
As at the end December 2020, the updated total number of retail accounts stood at 582,572 (M-Akiba
accounts only). NT/PDMO working on affordable new issuance framework. Approval received to re-issue
Comments:
a bond within the next financial year.
IN01021660
►Draft legal framework for a secured transactions regime (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value No Yes Yes Yes
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
The Secured Transaction Regime Act was assented into law on 16th May 2017.
Comments: Indicator achieved
Mobilizing long-term Financing
9/30/2021 Page 4 of 7
The World Bank Implementation Status & Results Report
Financial Sector Support Project (P151816)
IN01021654
►Increase in Insurance coverage (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 2.80 2.34 2.43 3.57
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
IN01021656
►Draft framework for sub-national entities on debt management (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value No Ongoing Ongoing Yes
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
Assessment of financing gaps for counties has been concluded. The draft report is under review.
County borrowing Circular released by the CS/NTon 9th February 2021 Counties providing clear guidance
on borrowing by county Governments stipulating the minimum requirements before
issuance. Subsequently counties such as Kisumu, Machakos and Bungoma become the first counties to
Comments: complete a Public Credit Rating (March 2020) by GCR. The CMA and CRA
Teams held a meeting on June 11, 2021 to update on the status and way forward in regard to progressing
the County Financing project. The NT, CRA and CMA are planning a meeting to progress the project
including pursue progress made by Laikipia County on their inaugural issuance.
IN01021658
►Draft framework / regulation for new long term products (Number, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 2.00 2.00 2.00
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
The Capital Markets (Commodities Markets) Regulations 2020 and the Capital Markets (Coffee
Exchange) Regulations 2020 were gazetted by the Cabinet Secretary for the National Treasury and
Planning on 3rd April 2020. The Business Laws (Amendment) Bill, 2019 was also enacted into Law in
March 2020 (The bill highlights the rights of offered to buy out minority
Comments: shareholders). For the last quarter, the Authority was reviewing the draft
Collective Investment Scheme framework which includes- Th e Collective Investment Schemes
(Alternative Investment Funds) Regulations, The Collective Investment (General Schemes) Regulations
and the Draft Collective Investment Schemes Act.
IN01021661
►Increase in Pension coverage (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 15.00 22.00 22.00 20.00
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
IN01021662
►Increase in volume of secondary market transactions of government debt (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
9/30/2021 Page 5 of 7
The World Bank Implementation Status & Results Report
Financial Sector Support Project (P151816)
Value N/A Yes Yes Yes
Date 01-May-2015 31-Dec-2020 30-Jun-2021 30-Apr-2021
The Secondary Market Government Bond Turnover stood at Kshs. 270.8 Billion as at Q2 2021. A
comparison with Q1 2021 indicat es a 35.92% increase from the Kshs. 199.23 Billion turnover recorded
during that quarter. This is also a 98.2% increase from Q2 2020 whereby Kshs. 136.63 Billion turnover
Comments: was recorded.
In Q2 2021, a total of Kshs. 271.23 Billion worth of bonds has been traded at the Exchange. This is a
98.49% increase from Q2 2020 whereby Kshs. 136.65 Billion worth of bonds had been traded.
Performance-Based Conditions
Data on Financial Performance
Disbursements (by loan)
Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed
P151816 IDA-56270 Effective USD 37.00 37.00 0.00 23.68 13.31 64%
Key Dates (by loan)
Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date
P151816 IDA-56270 Effective 30-Apr-2015 04-Jun-2015 10-Jul-2015 31-Jul-2020 31-Dec-2021
Cumulative Disbursements
9/30/2021 Page 6 of 7
The World Bank Implementation Status & Results Report
Financial Sector Support Project (P151816)
PBC Disbursement
Achievement Disbursed amount in Disbursement %
PBC ID PBC Type Description Coc PBC Amount
Status Coc for PBC
Restructuring History
Level 2 Approved on 09-Nov-2018 ,Level 2 Approved on 27-Jul-2020 ,Level 2 Approved on 28-Apr-2021
Related Project(s)
There are no related projects.
9/30/2021 Page 7 of 7