The World Bank Report No: ISR9474 Implementation Status & Results Nicaragua Micro, Small and Medium Enterprise Development (P109691) Public Disclosure Copy Operation Name: Micro, Small and Medium Enterprise Development (P109691) Project Stage: Implementation Seq.No: 11 Status: ARCHIVED Archive Date: 03-Mar-2013 Country: Nicaragua Approval FY: 2008 Product Line: IBRD/IDA Region: LATIN AMERICA AND CARIBBEAN Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 12-Jun-2008 Original Closing Date 31-Dec-2013 Planned Mid Term Review Date 13-Feb-2012 Last Archived ISR Date 30-Jul-2012 Effectiveness Date 16-Jun-2009 Revised Closing Date 31-Dec-2013 Actual Mid Term Review Date 13-Feb-2012 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to improve the competitiveness of micro, small, and medium enterprises (MSMEs) and the business climate that affects those firms. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Business Climate Improvement 4.90 Matching Grants for MSMEs 6.57 Increased Access to Financial Services for MSMEs 0.00 Institutional Development of MIFIC 1.48 Overall Ratings Public Disclosure Copy Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Implementation Status Overview The project continues to produce positive results and a decent pace of implementation in the matching grants activity. Results include increased sales, full-time employees, and the introduction of new products and processes for firms that received matching grants. It is expected that the US$3.6 million left in matching grants will be disbursed to finish round two and for the recently launched third round. Activities to support the business climate continue to face challenges that slow implementation and, therefore, show limited results. Disbursement in the business climate activities has reached only 22 percent of the US$4.9 million allocated to the component. A major activity planned for the component is the Page 1 of 5 The World Bank Report No: ISR9474 construction of the National Metrology Laboratory, but the original land designated for this activity is no longer available. Identifying new land and completing the environmental and design studies necessary have delayed the construction and the US$1.2 million allocated to this activity will either need to be reassigned to new activities or will not be spent if a project extension is not granted. The Bank team has stated it would not consider an extension until and unless the necessary studies are completed. The studies were completed February 5, 2013. Public Disclosure Copy In October 2012, the Bank agreed “in principle� to the transfer of the matching grants activity, support to the CAMIPYMEs, and part of the institutional development component to the newly established Ministry of Family and Community Economy (MEF), since its mandate includes support to MSMEs. The Bank team shared the steps necessary prior to officially approving and transferring parts of the project. During the supervision mission in November 2012, the Bank team worked with the Government to determine the new planned institutional structure for the project – the current implementer, the Ministry of Development, Industry, and Commerce (MIFIC) will be a co-executor of the project with MEF. The transfer will require a second level restructuring. During the mission, the team and Government also agreed upon a timeline for completing the necessary steps, but many steps are delayed. Among the steps are procurement, financial management, legal, and safeguards assessments. In December, procurement, environmental, and indigenous peoples experts undertook their respective assessments. Although some follow-up work is necessary, the results of the assessments were mostly positive. It is hoped that the transfer will take place by March 2013. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target MSMEs receiving matching grants introduce Text Value 0 304 (cumulative) 69 (cumulative) new products or processes Date 06-Oct-2009 23-Jan-2013 31-Dec-2013 Comments This includes 131 firms from Adjusted to reflect what is in round 1 and 173 firms in PAD. Restructuring will round 2. include new target of 80. Decrease in time needed to start a business Text Value 39 days 39 27 days Date 06-Oct-2009 23-Oct-2012 31-Dec-2013 Comments Original indicator in PAD Doing Business 2013 report. Since this indicator was expected data for each The Client's internal envisioned to look at data for municipality that is being measurement of this in every municipality, but only supported by the project. Managua for 2012 is 36 days. included here is Managua, Public Disclosure Copy Baseline data was only this indicator may be modified available for business license, with the restructuring. not for full registration, except in Managua. Intermediate Results Indicators Page 2 of 5 The World Bank Report No: ISR9474 Indicator Name Core Unit of Measure Baseline Current End Target Increased number of firms that received Text Value 0 304 159 (cumulative) matching grants that implemented product or Date 06-Oct-2009 23-Jan-2013 31-Dec-2013 Public Disclosure Copy process quality enhancement projects Comments No firms receiving matching New products or processes. (includinginternational certifications) or introduced new products and/or proc grants. Increase in the number of newly registered Text Value businesses Date 23-Jan-2013 Comments This indicator will be removed with restructuring. Results may not occur until after project-close. Volume of Bank Support: Institutional Amount(USD) Value 0.00 2400000.00 Development - Microfinance Date 18-Jul-2012 31-Dec-2013 Comments This indicator will be removed with next restructuring Volume of Bank Support: Institutional Amount(USD) Value 0.00 2400000.00 Development - SME Date 14-Dec-2011 31-Dec-2013 Comments Will re-evaluate this indicator after restructuring. Number of firms served by Decentralized Number Value 600.00 32792.00 3400.00 Support Centers (CAMIPYMEs) Date 06-Oct-2009 23-Jan-2013 31-Dec-2013 Comments Of the CAMIPYMEs Cumulative number of firms Cumulative supported by the project. served from Client that includes repeat firms. Will also try to get results for total number of firms. Number of grants awarded. Number Value 0.00 407.00 580.00 Date 06-Oct-2009 30-Sep-2012 31-Dec-2013 Public Disclosure Copy Comments No grants awarded Cumulative, rounds 1 and 2 Time needed to obtain food and health permits Days Value 180.00 180.00 126.00 Date 30-Jun-2011 23-Jan-2013 31-Dec-2013 Comments 180 days for health permit, 15 Work is underway but days for food permit. Baseline changes have not been date needs confirmation from measured yet. Ministry of Health. Amount of grants awarded. Amount(USD) Value 0.00 2391599.00 5800000.00 Page 3 of 5 The World Bank Report No: ISR9474 Date 06-Oct-2009 30-Sep-2012 31-Dec-2013 Comments Cumulative Adequate technical fiduciary staff in place Yes/No Value No Yes Yes Public Disclosure Copy Date 23-Jan-2013 31-Dec-2013 Comments Operational and Procurement Plans presented Yes/No Value Yes Yes Yes at start of every year. Date 23-Jan-2013 31-Dec-2013 Comments Presented prior to project effectiveness. Data on Financial Performance (as of 19-Feb-2013) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P109691 IDA-44680 Effective 12-Jun-2008 25-Jul-2008 16-Jun-2009 31-Dec-2013 31-Dec-2013 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P109691 IDA-44680 Effective XDR 12.30 8.86 3.44 3.66 5.20 41.00 Disbursement Graph Public Disclosure Copy Page 4 of 5 The World Bank Report No: ISR9474 Key Decisions Regarding Implementation The Government requested, and the Bank agreed “in principle� to transfer approximately half of the project to the newly established Ministry of Family and Community Economy. Prior to the official transfer, several steps are necessary including fiduciary and safeguards assessments, the updating of project manuals, and an amendment to the legal agreement. The Government had requested an amendment in June 2012 to remove references in the legal agreement to the partial-risk credit guarantee program and to modify the indicators. Given Public Disclosure Copy the planned changes to the project with the transfer, the Government and Bank agreed to incorporate the changes proposed in the June request in the upcoming restructuring. Restructuring History Level two Approved on 21-Jul-2011 Related Projects There are no related projects. Public Disclosure Copy Page 5 of 5