The World Bank Implementation Status & Results Report MX: Expanding Rural Finance (P153338) MX: Expanding Rural Finance (P153338) LATIN AMERICA AND CARIBBEAN | Mexico | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2016 | Seq No: 7 | ARCHIVED on 28-May-2019 | ISR37013 | Implementing Agencies: Financiera Nacional de Desarrollo Agropecuario, Rural, Forestal y Pesquero, Financiera Nacional de Desarrollo Agropecuario, Rural, Forestal y Pesquero Key Dates Key Project Dates Bank Approval Date: 24-Nov-2015 Effectiveness Date: 13-Jul-2016 Planned Mid Term Review Date: 03-Sep-2018 Actual Mid-Term Review Date: 27-Aug-2018 Original Closing Date: 31-Dec-2020 Revised Closing Date: 31-Dec-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project’s development objective is to expand the availability of finance to the rural economy. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name 1. Expanding Credit for Rural MSMEs:(Cost $775.00 M) 2. Strengthening Institutional Capacity for Sustainable Rural Finance:(Cost $30.00 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 Additional Financing: The Board approved on March 28, 2019 the US$400 million Additional Financing to the Expanding Rural Finance Project. Project Progress: FND is making remarkable progress towards the achievement of the Project Development Objective of expanding the availability of finance to the rural economy. Data on project outcomes as of end-December 2018 show that US$252 million has been disbursed through credit lines with 152 eligible Participating Financial Intermediaries (PFIs), which in turn have provided 150,000 credits to 118,000 rural MSMEs with an average loan size of US$1,700. Eighty-six percent of credit recipients are women, 10 percent are located in communities classified as marginalized or highly marginalized by the National Council for Population (CONAPO), 10 percent are first-time borrowers from formal financial institutions, and 80 percent of the 150,000 loans were provided in the southern states with the highest levels of poverty in Mexico. 5/28/2019 Page 1 of 6 The World Bank Implementation Status & Results Report MX: Expanding Rural Finance (P153338) In addition, FND has financed approximately 2,000 coberturas through eligible PFIs to hedge the price of about 200,000 tons of sorghum, cotton, coffee and corn worth approximately US$50 million. Moreover, as part of its counterpart financing, FND provides capacity building - known as apoyos - to PFIs to support the development of a sound rural financial sector. As of December, 2018 FND has provided 393 grants to 226 rural financial intermediaries (about US$3 million). . Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Sustainability Moderate Moderate Moderate Fiduciary Moderate Moderate Moderate Environment and Social Low Moderate Moderate Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Moderate Moderate Moderate Results PDO Indicators by Objectives / Outcomes Expand the availability of finance to the rural economy. IN00701106 ►Number of loans disbursed under project (cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 149,389.00 149,389.00 400,000.00 Date 01-Sep-2015 31-Dec-2018 31-Dec-2018 31-Dec-2023 Comments: Number of loans disbursed under the project for Components 1a and 1b to the rural economy. IN00701107 ►Volume of total loans disbursed under project (cumulative), US$ million (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target 5/28/2019 Page 2 of 6 The World Bank Implementation Status & Results Report MX: Expanding Rural Finance (P153338) Value 0.00 252.00 252.00 773.00 Date 01-Sep-2015 31-Dec-2018 31-Dec-2018 31-Dec-2023 This indicator is a cumulative measure of the total volume of funding disbursed by PFIs to MSMEs under Comments: the credit line in Component1a and 1b. This is the sum of two core indicators disaggregated below that measure microfinance credit volume and SME credit volume. IN00701108 ►Average non-performing loans ratio for PFIs receiving project funds (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.29 1.10 6.00 Date 01-Sep-2015 30-Sep-2018 31-Dec-2018 31-Dec-2023 Non-Performing Loans = loans of between 30-90 days past due / gross loans reflecting portfolio at risk of Comments: lending of PFIs to final beneficiaries Intermediate Results Indicators by Components 1. Expanding Credit for Rural MSMEs IN00701109 ►Volume of Bank Support: Lines of Credit - Microfinance (cumulative), US$ million (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 37.69 37.69 123.00 Date 01-Sep-2015 31-Dec-2018 31-Dec-2018 31-Dec-2023 A line of credit is classified "microfinance" if supporting subloans: a) Have an average outstanding balance (gross loan portfolio ÷ number of active borrowers) < 300% of the latest per capita GNI, OR b) Less than $1,000. EITHER circumstance triggers classification as microfinance. Lines of credit and other funding for Comments: retail Microfinance sub-loans by Participating Financial Institutions or Community-Managed Loan Funds. Report the cumulative amounts disbursed as of most recent date available. If a split by micro and SME is not available or possible, please use 50% for each as proxy. IN00701111 ►Volume of Bank Support: Lines of Credit - SME (cumulative), US$ million (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 214.27 214.27 632.00 Date 01-Sep-2015 31-Dec-2018 31-Dec-2018 31-Dec-2023 A line of credit is "SME finance" if the supporting subloans have an average outstanding balance > microfinance cut-off noted below, but no more than $300,000. A line of credit is classified "microfinance" if supporting subloans: a) Have an average outstanding balance (gross loan portfolio ÷ number of active borrowers) < 300% of the latest per capita GNI, OR b) Less than $1,000. EITHER circumstance triggers Comments: classification as microfinance. Lines of credit and other funding for retail SME sub-loans by Participating Financial Institutions or Community-Managed Loan Funds. Report the cumulative amounts disbursed as of most recent date available. If a split by micro and SME is not available or possible, please use 50% for each as proxy. IN00701113 ►Number of final beneficiaries with loans financed with project funds (cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 5/28/2019 Page 3 of 6 The World Bank Implementation Status & Results Report MX: Expanding Rural Finance (P153338) Value 0.00 118,107.00 118,107.00 315,000.00 Date 01-Sep-2015 31-Dec-2018 31-Dec-2018 31-Dec-2023 The indicator is a cumulative measure of the total number of unique MSME beneficiaries provided under Comments: the credit line in Component 1a and 1b. IN00701116 Number of final microfinance beneficiaries financed with project funds (cumulative) (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 101,169.00 101,169.00 260,000.00 IN00701117 Female beneficiaries as a share of total beneficiaries financed by the project. (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 86.04 86.04 60.00 IN00701118 Share of loan recipients from marginal municipalities financed by the project. (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10.24 10.24 15.00 IN00701120 Share of loan recipients that are first-time borrowers (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 10.00 10.00 10.00 IN00701119 ►Average NPL rate for FND lending to PFIs under the project-funded credit line (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.70 0.20 5.00 Date 01-Sep-2015 30-Sep-2018 31-Dec-2018 31-Dec-2023 Comments: NPLs = loans more than 90 days past due / gross loans reflecting lending from FND to PFIs (Average). 2. Strengthening Institutional Capacity for Sustainable Rural Finance IN00701110 ►Percentage of FND branch offices using the new core banking system. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 70.00 Date 01-Sep-2015 31-Dec-2018 31-Dec-2018 31-Dec-2023 Percentage of FND branch offices that have installed the new banking system and are at least in the Comments: testing phase of using it. IN00701112 ►Number of PFIs that receive capacity building from FND (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 5/28/2019 Page 4 of 6 The World Bank Implementation Status & Results Report MX: Expanding Rural Finance (P153338) Value 145.00 203.00 226.00 300.00 Date 01-Sep-2015 30-Sep-2018 31-Dec-2018 31-Dec-2022 Number of PFIs financed through component 2b. This includes both PFIs receiving funds through the Comments: credit line, and PFIs who are notyet eligible for or not yet participating in the credit line. IN00701114 ►Submission of operational tracking data (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 01-Sep-2015 31-Dec-2018 31-Dec-2018 31-Dec-2023 Comments: FND presents information on additional tracking indicators as indicated in the Operations Manual. IN00701115 ►Number of PFIs registered to receive client feedback on Financial Consumer Protection Agency's (CONDUSEF) website (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 107.00 178.00 188.00 200.00 Date 01-Sep-2015 30-Sep-2018 31-Dec-2018 31-Dec-2023 Citizen’s Feedback indicator: Data available at CONDUSEF site. This includes all PFIs working with FND, Comments: not just those financed by the project. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P153338 IBRD-85550 Effective USD 400.00 400.00 0.00 320.61 79.39 80% Not P153338 IBRD-89420 USD 400.00 400.00 0.00 0.00 400.00 0% Effective Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P153338 IBRD-85550 Effective 24-Nov-2015 29-Apr-2016 13-Jul-2016 31-Dec-2020 31-Dec-2020 Not P153338 IBRD-89420 28-Mar-2019 -- -- 31-Dec-2023 31-Dec-2023 Effective Cumulative Disbursements 5/28/2019 Page 5 of 6 The World Bank Implementation Status & Results Report MX: Expanding Rural Finance (P153338) Restructuring History Level 2 Approved on 02-Dec-2016 Related Project(s) P169156-Expanding Rural Finance Project 5/28/2019 Page 6 of 6