The World Bank Report No: ISR6260 Implementation Status & Results Afghanistan Expanding Microfinance Outreach and Improving Sustainability (P104301) Public Disclosure Copy Operation Name: Expanding Microfinance Outreach and Improving Project Stage: Implementation Seq.No: 8 Status: ARCHIVED Archive Date: 14-Aug-2011 Sustainability (P104301) Country: Afghanistan Approval FY: 2008 Product Line: IBRD/IDA Region: SOUTH ASIA Lending Instrument: Financial Intermediary Loan Implementing Agency(ies): Ministry of Finance/MISFA Key Dates Board Approval Date 08-Jan-2008 Original Closing Date 31-Dec-2010 Planned Mid Term Review Date Last Archived ISR Date 14-Aug-2011 Effectiveness Date 02-Jun-2008 Revised Closing Date 30-Jun-2012 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the project is to achieve operational sustainability for most microfinance service providers (MFPs) and help them scale up outreach of financial services to meet the demands and needs of many poor Afghans, especially women. This will take place through: - Increased sustainability of MFPs that have begun the process of diversifying their funding sources to include commercial sources in addition to funds provided by the Government of Afghanistan - MFPs are registered as Afghan companies and operate under relevant Afghan laws and supervision - Scaled up outreach to many more poor people in most provinces Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost On-lending to MFPs 30000000.00 Overall Ratings Previous Rating Current Rating Public Disclosure Copy Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Satisfactory Overall Risk Rating Implementation Status Overview Implementation progress following restructuring shows achievement of several target indicators of performance including a) the revised target increase in the amount and percentage of loan outstanding relative to the base year, b ) achievement of the 65% target percent of loan outstanding accounted for by MFPs with full Operational Self-Sufficiency (albeit with a concentration of the portfolio in one large MFI), c) the percentage of microfinance providers with a portfolio at risk less than 5% is achieved by the target 57% (4 out of 7) of MFPs. Also the 75% target percentage of active clients who are women has been achieved. However,the current performance shows that the overall number of active borrowers has decreased from 267,664 as at end of August 2010 to 236,208 a year later. This is the result of the consolidation process. The total portfolio outstanding by August 2010 was about Page 1 of 4 The World Bank Report No: ISR6260 5.056 billion AFN and as at August 2011 it was 5.518 billion AFN. The overall repayment rate is 89%. MISFA has continued to support its partner MFIs by ensuring that they are facilitated to develop diverse products; to provide quality services; to encourage gainful access to microfinance; and to ensure that the clientele is informed and that there is a broad market participation. This support is intended to move these institutions towards Operational Self Sufficiency(OSS) . Currently only one of the remaining 7 MFIs has achieved 100% OSS and it is expected that by 2013, two others will have reached this level. MISFA has been open to a broad selection of partner types and looked into diverse markets. This open Public Disclosure Copy minded approach has enabled the partner MFIs and their clients to appreciate the financial inclusion agenda. MISFA continues to coordinate and co-operate with other development finance providers. The potential achievement of the development objective is still moderately satisfactory. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Increase in amount and percentage of loan Text Value 65 mn 108mn 104mn portfolio outstanding relative to base year Date 31-Dec-2006 31-Jan-2011 30-Jun-2012 Comments % of active clients who are women Text Value 70% 75% 75% Date 31-Dec-2006 30-Dec-2011 30-Jun-2012 Comments Percent of loan portfolio outstanding that is Text Value 0% 65% 65% accounted for by MFPs with OSS>100%. Date 31-Dec-2006 30-Dec-2011 30-Jun-2012 Comments Number/% of Microfinance service providers Text Value 0% 100% 100% registered as Afghan companies and operating Date 31-Dec-2006 30-Dec-2011 31-Dec-2011 under relevant Afghan laws and supervision Comments Number of active clients of MFPs. Text Value 300,000 236,208 297,000 Date 31-Dec-2006 30-Dec-2011 29-Jun-2012 Public Disclosure Copy Comments Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target No of active loan accounts -Microfinance Number Value 236208.00 297000.00 Date 30-Dec-2011 31-Dec-2011 Comments No target available Page 2 of 4 The World Bank Report No: ISR6260 Percentage of project-supported institutions Percentage Value 100.00 100.00 that are reporting on this indicator Sub Type Supplemental Public Disclosure Copy Outstanding Microfinance Loan Portfolio Amount(USD) Value 108000000.00 104000000.00 Date 30-Dec-2011 30-Jun-2012 Comments No target available Percentage of project-supported institutions Percentage Value 100.00 100.00 that are reporting on this indicator Sub Type Supplemental Volume of Bank Support: Institutional Amount(USD) Value 0.00 0.00 Development - Microfinance Date 30-Dec-2011 29-Jun-2012 Comments Data gathered from retrofit No target available exercise Volume of Bank Support: Lines of Credit - Amount(USD) Value 16044500.00 16044500.00 Microfinance Date 31-Dec-2010 30-Jun-2012 Comments Data gathered from retrofit Target not available exercise Number of providinces in which MFPs are Text Value 21 22 22 providing services Date 31-Dec-2006 30-Dec-2011 29-Jun-2012 Comments N/% of MFPs with PAR 30 less than 5%. Text Value 85% 4 0ut of 7, which is 57% 57% Date 31-Dec-2006 30-Dec-2011 29-Jun-2012 Comments Number / %of MFPs with an OSS (operational Text Value 3 MFPs or 20% of MFPs 1 out of 7, which is 14% 14% self sufficiency ratio) of more than 100% that Date 31-Dec-2006 30-Nov-2011 29-Jun-2012 do not require any more grant subsidies for Comments operational deficits. Public Disclosure Copy Data on Financial Performance (as of 27-Mar-2012) Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P104301 IDA-H3480 Effective 08-Jan-2008 10-Mar-2008 02-Jun-2008 30-Jun-2012 Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed Page 3 of 4 The World Bank Report No: ISR6260 P104301 IDA-H3480 Effective XDR 19.20 10.90 8.30 10.42 0.48 96.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation During the post-consolidation period MISFAhas slightly changed the way it will report on the performance of the microfinance operations. There are now 7 partners and MISFA will be providing a general overview of their partner's performance and their contribution to the microfinance sector. MISFA will also be working very closely with each partner according to their various stages of development using differing approaches for each to reach sustainability. According to the financial projections prepared by MISFA ,during the next two years MISFA will not require additional external resources to advance to the partner MFIs. This is because the needs of each MFI is limited, given the reorganizations that have taken place during the consolidation stage that has reduced the rate of credit growth to a pace that is commensurate with the capacity and operational efficiency of each one of the institutions. A total of SDR 8,781,966.57 was cancelled as of November 1,2011 and will be committed to other purposes in the country. The closing date for the project was extended to June 30, 2012. Financial Management (FM) assessment was moderately satisfactory during the last mission, but due to the continued improvement in all aspects of FM by MISFA, the rating has been upgraded to satisfactory. Public Disclosure Copy Restructuring History Level two Approved on 22-Dec-2010, Level two Approved on 06-Dec-2011 Related Projects There are no related projects. Page 4 of 4