The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) EUROPE AND CENTRAL ASIA | Georgia | IBRD/IDA | Investment Project Financing (IPF) | FY 2021 | Seq No: 8 | Archived on 02-Dec-2024 | ISR02285 Implementing Agencies: Enterprise Georgia, Ministry of Economy and Sustainable Development, Ministry of Economy and Sustainable Development, National Bank of Georgia 1. OBJECTIVE 1.1 Development Objective Original Development Objective (Approved as part of Approval package on 10-May-2021) The Project Development Objective (PDO) is to provide relief to micro, small, and medium-size enterprises and support their recovery, including by strengthening the enabling environment for access to finance. Has the Development Objective been changed since Board Approval of the Project Objective? No 2. COMPONENTS Name Component 1: Financial relief and recovery for MSMEs:(Cost 82,300,000.00) Component 2: Digital payments and financial infrastructure upgrading:(Cost 14,500,000.00) Component 3: Project management and monitoring:(Cost 5,800,000.00) Component 4: Contingent Emergency Response Component (CERC):(Cost 0.00) 3. OVERALL RATINGS Name Previous Current Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Dec 02, 2024 Page 1 of 11 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) 4. KEY ISSUES & STATUS 4.1 Implementation Status and Key Decisions The progress towards achievement of the Project Development Objective (PDO) remains Satisfactory. The overall Implementation Progress (IP) remains at Moderately Satisfactory to reflect moderate implementation challenges and additional time needed for the preparatory activities. The PDO remains relevant, and authorities have shown strong commitment to the project. Overall, good progress has been achieved so far: Under component 1, since disbursements commenced in September 2022, the Project has provided GEL 228 million in financial support (grants, co-financing, and guaranteed loans) to MSMEs by August 2024, which is expected to continue ramping up in the coming months. Three regional centers are operating, and three more will be opened. The deliveries of training, workshops, and consulting services have started, and demand is strong. In addition, Enterprise Georgia accomplished two more performance-based conditions. Under component 2, the contract between the National Bank of Georgia and the vendor for the Instant Payment System is underway and the delivery is expected by 1Q2026. The related procurement of upgrading Real Time Gross Settlement (RTGS) system has also been launched. The preparation of the legal amendments package on secured transactions by the Ministry of Economy and Sustainable Development (MOESD) is at advanced stages. MOESD and the Public Service Delivery Agency (PSDA) remain committed to the Know-Your-Customer (KYC) reform, and the Digital Identity Wallet tender is expected to be announced in early 2025. 5. SYSTEMATIC OPERATIONS RISK-RATING TOOL Rating at Approval Last Approved Rating Risk Category Approval Package - ISR Seq. 07 - 20 Jun Proposed Rating 11 May 2021 2024 Political and Governance Moderate Moderate Moderate Macroeconomic Substantial Moderate Moderate Sector Strategies and Policies Substantial Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Substantial Substantial Substantial Dec 02, 2024 Page 2 of 11 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Stakeholders Moderate Moderate Moderate Overall Substantial Moderate Moderate Dec 02, 2024 Page 3 of 11 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) 6. RESULTS 6.1 PDO Indicators by PDO Outcomes Relief for MSMEs Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Volume of financial support 0 Jun/2021 174 30-Mar-2024 220 30-Aug-2024 450 Jun/2026 provided to MSMEs affected by the pandemic (GEL million) (Text) Survivorship ratio: ratio of NA Dec/2020 NA 30-Mar-2024 NA 30-Aug-2024 <1 Dec/2025 inactive enterprises to total beneficiaries of Enterprise Georgia, divided by ratio of inactive enterprises to total active enterprises in the economy (Text) Resilient Recovery of MSMEs Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Revenue multiplier: ratio of NA Dec/2020 NA 30-Mar-2024 NA 30-Aug-2024 >1 Dec/2025 revenue-weighted average annual change in MSME revenue of Project beneficiaries, divided by the average change of revenue in Page 4 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) their respective sector (Text) Number of digital transactions 0.00 Jun/2021 0.00 30-Mar-2024 0.00 30-Aug-2024 17.00 Jun/2026 facilitated through the new instant payment system (million) (Number) Strengthening the enabling environment for access to finance for SMEs Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Establishment of an upgraded No Jun/2021 No 30-Mar-2024 No 30-Aug-2024 Yes Jun/2026 movable collateral registry (Yes/No) 6.2 Intermediate Results Indicators by Components Component 1: Financial relief and recovery for MSMEs Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Number of MSMEs supported 0.00 Jun/2021 2,167 31-Mar-2024 2,167 30-Aug-2024 5,000.00 Jun/2026 by grants under the Project (Number) Volume of grants disbursed to 0 Jun/2021 47.40 31-Mar-2024 47.40 30-Aug-2024 70 Jun/2026 MSMEs under the Project (GEL million) (Text) Number of enterprises 0.00 Jun/2021 350 31-Mar-2024 448 30-Aug-2024 200.00 Jun/2026 supported by co-financing of Page 5 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) interest payments under the Project (Number) Volume of loans supported by 0 Jun/2021 303 31-Mar-2024 395 30-Aug-2024 83 Jun/2026 co-financing under the Project (GEL million) (Text) Number of guarantees issued 0.00 Jun/2021 165 31-Mar-2024 234 30-Aug-2024 200.00 Jun/2026 under the Project (Number) Volume of loans guaranteed 0 Jun/2021 123 30-Sep-2023 420 30-Aug-2024 420 Jun/2026 with support of the Project (GEL million) (Text) The historic Jun/2021 0 31-Mar-2024 0 30-Aug-2024 NPL ratio in the Jun/2026 NPL ratio for co-financing NPL ratio of co-financing of EG's programs loan portfolio interest payments program is 0.6% should be (%) (Text) below 8% Comments on Percentage of NPLs in the portfolio of loans that received co-financing of interest payments. achieving targets NPLs as reported by PFIs according to NBG prudential definition. The historic Jun/2021 0 31-Mar-2024 0 30-Aug-2024 NPL ratio of the Jun/2026 NPL ratio for PCG program NPL ratio of the partial credit EG's programs should be guarantee program (%) is 0.6% below 8% (Text) Comments on Percentage of NPLs in the portfolio of loans that partial credit guarantees. NPLs as reported by achieving targets PFIs according to NBG prudential definition Number of MSMEs receiving 0.00 Jun/2021 69 31-Mar-2024 300 30-Aug-2024 300.00 Jun/2026 training and/or technical assistance for digital transformation and/or COVID-proofing (Number) Share of volume of financial 0.00 Jun/2021 N/A 31-Mar-2024 N/A 30-Aug-2024 15.00 Jun/2026 support under the Project Page 6 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) channeled to investments in the green economy and climate financing (%) (Percentage) 0.00 Jun/2021 98 17-Jun-2024 98 17-Jun-2024 60.00 Jun/2026 Comments on This includes share of beneficiaries of all Project supported programs (micro grants, interest EG Citizen Engagement: share achieving targets co-financing, and partial credit guarantee) that stated that they are either “satisfied” or “very of MSMEs reporting that satisfied” with Enterprise Georgia’s programs. 90 percent of beneficiaries mentioned that they programs reflected their would not have been able to implement their project without the support from Enterprise needs (%) (Percentage) Georgia. In addition, as part of its programs’ awareness campaign, EG has conducted meetings with potential beneficiaries and financial institutions and disseminated information through online channels to reach wider audience. NA Nov/2020 EG (1) adopted 31-Mar-2024 EG (1) adopted 31-Mar-2024 EG has adopted Dec/2025 of a robust of a robust a robust M&E M&E M&E framework and framework, framework, used evidence which which to improve the improves the improves the design of its methodology methodology grants program for monitoring for monitoring and develop Institutional actions to the impact of the impact of sustainable strengthen the grants the program the program options for its program (Text) PBC on MSME on MSME development. beneficiaries; beneficiaries; and (2) and (2) launched a launched a pilot pilot graduation graduation scheme to scheme to provide provide institutional institutional Page 7 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) support to support to selected high- selected high- performance performance beneficiaries. beneficiaries. Comments on Institutional actions to strengthen the grants program include: (1) the adoption of a robust achieving targets M&E framework, which improves the methodology for monitoring the impact of the program on MSME beneficiaries; and (2) launch of a pilot graduation scheme to provide institutional support to selected high-performance beneficiaries. EG does not Nov/2020 NA 31-Mar-2024 (1) EG has 30-Aug-2024 EG has adopted Dec/2025 have developed and a robust M&E evaluation adopted a framework and systems and robust M&E conducted an measures in framework; (2) evaluation of its place to assess EG has co-financing the conducted an program, using effectiveness evaluation of evidence to of its co- its co-financing propose financing of program. amendments to Institutional actions to interest improve strengthen the co-financing of payments on targeting, interest payments program an frequent eligibility (Text) PBC basis and criteria and better align its other aspects targeting of the program. towards strategic sectors and/or thematic areas. Comments on Institutional actions to strengthen the co-financing of interest payments program include: (1) achieving targets the adoption of a robust M&E framework, which improves the methodology for monitoring the impact of the program; (2) the completion of an evaluation of the co-financing program; Page 8 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) (3) the amendments of the resolution governing the program to reflect improvements. EG currently Nov/2020 EG has (a) 31-Mar-2024 EG has (a) 30-Aug-2024 EG has Dec/2025 does not have launched a launched a strengthened a monitoring campaign to campaign to the design and system, a risk share share implementation management information information arrangements framework, and raise and raise of the program, and an awareness awareness including more outreach among PFIs, (b) among PFIs, (b) robust risk strategy to introduced a introduced a monitoring, Institutional actions to evaluate the risk monitoring risk monitoring awareness strengthen the partial credit performance system for EG system for EG campaigns, guarantees program and risks of the supported supported stronger (Text) PBC program and loans and (c) loans and (c) participation propose adopted a adopted a agreements improvements financial financial with PFIs, and in its design. modelling tool. modelling tool. financial modelling tool. Comments on Institutional actions to strengthen the partial credit guarantee programs include: (1) achieving targets introduction of measures to engage with PFIs, including the launch of an information and awareness campaign among PFIs, as well as the introduction of a risk monitoring system; (2) amendment of the participation agreements signed with PFIs to specify that EG can impose sanctions, remedies, and termination on PFIs; (3) adoption of a financial modelling tool. Introduction of a managerial No Nov/2020 Yes 31-Mar-2024 Yes 30-Aug-2024 Yes Dec/2025 skills program (Yes/No) Share of financial resources 24.00 Dec/2020 38.00 31-Mar-2024 31.00 30-Aug-2024 35.00 Dec/2025 (grants, co-financing, guarantees) under the Project channeled to women- Page 9 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) inclusive firms (Percentage) Component 2: Digital payments and financial infrastructure upgrading Baseline Actual (Previous) Actual (Current) Closing Period Indicator Name Value Month/Year Value Date Value Date Value Month/Year Volume of retail transactions 0.00 Jun/2021 0.00 31-Mar-2024 0.00 30-Aug-2024 10.00 Jun/2026 recorded in the IPS (GEL Comments on Note: the actual number might be higher if government payments are included. billion) (Number) achieving targets 0.00 Jun/2021 0.00 31-Mar-2024 0.00 30-Aug-2024 15.00 Jun/2026 Share of instant payment Comments on Number of instant payments transactions divided by the total number of non-cash retail transactions (%) (Number) achieving targets payment transactions (%). Establishment of a functional No Jun/2021 No 31-Mar-2024 No 30-Aug-2024 Yes Jun/2026 KYC registry (Yes/No) Approval of amendments to No Jun/2021 No 31-Mar-2024 No 30-Aug-2024 Yes Dec/2024 legal framework for secured Comments on Proposed amendments to the legal framework for secured transactions are approved. transactions (Yes/No) achieving targets Establishment of a working No Jun/2021 Yes 31-Mar-2024 Yes 30-Aug-2024 Yes Jun/2023 group for KYC Registry Comments on Establishment of a working group formed by MOESD, MOJ and other stakeholders. (Yes/No) achieving targets Preparation of technical No Jun/2021 No 31-Mar-2024 No 30-Aug-2024 Yes Mar/2025 specifications for the Comments on Preparation of technical specifications for the modernization of the collateral registry. modernization of the achieving targets collateral registry (Yes/No) 6.3 Performance Based Conditions (PBC) Page 10 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Actual (Previous) Actual (Current) PBC Name Baseline Closing Period Value Date Value Date EG (1) adopted of a EG (1) adopted of a robust M&E robust M&E framework, which framework, which improves the improves the methodology for methodology for monitoring the monitoring the impact of the impact of the 1:Institutional program on MSME program on MSME actions to Value beneficiaries; and beneficiaries; and (2) strengthen the (2) launched a pilot 30-Mar-2024 launched a pilot 30-Mar-2024 grants program graduation scheme graduation scheme (Text) to provide to provide institutional institutional support support to selected to selected high- high-performance performance beneficiaries. beneficiaries. Allocated 0.00 0.00 Amount PBC allocation 13.60 2:Institutional Value NA NA actions to strengthen the co- Allocated 30-Mar-2024 30-Mar-2024 financing of interest 0.00 1.80 payments program Amount (Text) PBC allocation 6.70 Page 11 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) 3:Institutional EG adopted a EG adopted a actions to Value financial modelling financial modelling strengthen the tool. tool. 30-Mar-2024 30-Mar-2024 partial credit guarantees program Allocated 0.00 5.00 (Text) Amount PBC allocation 13.60 Page 12 of 14 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) 7. DATA ON FINANCIAL PERFORMANCE 7.1 Cumulative Disbursements 7.2 Disbursements (by loan) Loan/Credit/TF Status Original Revised Cancelled Disbursed Undisbursed % Disbursed Historical Disbursed IBRD-92390 Effective 102.90 102.90 0.00 45.96 50.30 47.75% 102.90 7.3 Key Dates (by loan) Loan/Credit/TF Status Approval Signing Effectiveness Orig. Closing Rev. Closing IBRD-92390 Effective 11-May-2021 17-May-2021 17-Aug-2021 30-Jun-2026 30-Jun-2026 8. KEY DATES Dec 02, 2024 Page 10 of 11 The World Bank Implementation Status & Results Report Georgia Relief and Recovery for Micro, Small, and Medium Enterprises (P173975) Key Events Planned Actual Approval 11-May-2021 11-May-2021 Effectiveness 17-Aug-2021 17-Aug-2021 Mid-Term Review No. 01 23-Apr-2024 21-Mar-2024 Operation Closing/Cancellation 30-Jun-2026 9. RESTRUCTURING HISTORY 10. ASSOCIATED OPERATION(S) There are no associated operations Dec 02, 2024 Page 11 of 11