The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) Mozambique: Financial Inclusion and Stability Project (P166107) AFRICA EAST | Mozambique | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2019 | Seq No: 5 | ARCHIVED on 28-Apr-2021 | ISR46057 | Implementing Agencies: Ministry of Economy and Finance, Ministry of Economy and Finance, Deposit Guarantee Fund, Bank of Mozambique, Instituto de Supervisao de Seguros de Mocambique Key Dates Key Project Dates Bank Approval Date: 13-Dec-2018 Effectiveness Date: 29-Aug-2019 Planned Mid Term Review Date: 31-Aug-2021 Actual Mid-Term Review Date: Original Closing Date: 30-Jun-2024 Revised Closing Date: 30-Jun-2024 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to increase financial inclusion among underserved groups and MSMEs, while strengthening the overall financial safety net. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Increasing usage of transaction accounts and access to finance for MSMEs:(Cost $20.00 M) Financial safety net strengthening:(Cost $17.00 M) Project management, monitoring and evaluation:(Cost $3.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Unsatisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions Progress to date. In the first year and a half of implementation, the Financial Inclusion and Stability Project (FISP) has supported advances in digital payments, SME finance, and strengthening the financial safety nets. Digital payments. FISP has contributed to the expansion of Government-to-Person (G2P) payments for social protection beneficiaries by supporting the development of an Automated Payment System (SPA) within the Ministry of Economy and Finance (CEDSIF). SPA directly integrates with the social protection financial management system (e-INAS) and is starting to be integrated with payment service providers including, for the first time, mobile money operators. A first bulk payment of social benefits to mobile wallets of about 10 thousand INAS beneficiaries was successfully processed through SPA in December 2020. Direct transfers of social benefits through mobile wallets would increase the convenience, efficiency, and outreach of social transfers in Mozambique. By leveraging on the agent distribution network of mobile money 4/28/2021 Page 1 of 9 The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) operators, it will directly contribute to outreach in rural areas that have more limited access to financial services. The World Bank has requested INAS to accelerate payments to those thousand beneficiaries that already have a verified mobile wallet. SME access to finance. FISP has contributed to the Government of Mozambique’s efforts to increase access to finance for SMEs by supporting implementation of the 2018 Secured Transactions and Collateral Registration (STCR) Law. FISP has financed the purchase of equipment to support the new online movable collateral registry (expected to be launched in 2021) and is in the process of recruiting a communications agency to support its outreach. Implementation of this sub-component is carried out in coordination with a complementary IFC advisory services project, financed by the Swiss State Secretariat for Economic Affairs (SECO), which recruited the firm that has developed the software for the registry. Financial safety nets. FISP is also contributing to capacity building at the Deposit Guarantee Fund (FGD) through support for South-South knowledge exchanges with the deposit insurance agencies of Brazil, Mexico, and Colombia. FISP financed IT equipment to FGD to facilitate remote operations of FGD staff in the context of Covid-19. FISP is also recruiting a technical consultant to support planned reforms to the deposit insurance system following the recent approval of the Law 20/20, of December 31, on Credit Institutions and Financial Corporations. The new law introduces a new framework for bank resolution and crisis management in Mozambique, in line with the Financial Stability Board’s Key Attributes for Effective Resolution Regimes for Financial Institutions. Pace of implementation is slow. However, implementation of key components are slower than expected which is reflected in a very low disbursement of project funds (only 7 percent, marginally higher from the previous reporting period). Increasing the pace of implementation requires stronger commitment from implementing agencies. The World Bank has proposed new actions that can help accelerate the pace of implementation and will continue providing closer implementation support. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Substantial Substantial Macroeconomic Substantial Substantial Low Sector Strategies and Policies Low Low High Technical Design of Project or Program High Substantial Moderate Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Substantial Substantial Moderate Environment and Social Low Moderate Moderate Stakeholders Low Low Low Other -- Moderate Moderate Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes Increasing usage of transaction accounts and access to finance for MSMEs IN00972277 ►Teachers in rural areas with access to a mobile money account (Percentage, Custom) 4/28/2021 Page 2 of 9 The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) Baseline Actual (Previous) Actual (Current) End Target Value 13.00 13.00 13.00 25.00 Date 31-Dec-2017 21-Mar-2019 21-Mar-2019 31-Dec-2023 Percentage of teachers working in public schools in rural areas (as defined by the national statistics Comments: institute) that have a registered transaction account with a mobile money operator IN00972279 Teachers in rural areas with access to a mobile money accoubt (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 9,100.00 9,100.00 9,100.00 17,500.00 IN00972280 ►Targeted recipients of government transfers that make or receive digital payments (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 25.00 Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 31-Dec-2023 The percentage of recipients of government transfers (disaggregated by target groups, such as urban/rural, gender, teachers, lifelong learning facilitators, or social benefits recipients) who report using mobile money, a debit or credit card, or a mobile phone to make a payment from an account, or report using the internet to pay bills or to buy something online, in the past 12 months. It also includes Comments: respondents who report paying bills, sending or receiving remittances, receiving payments for agricultural products, receiving government transfers, receiving wages, or receiving a public sector pension directly from or into a financial institution account or through a mobile money account in the past 12 month (% age 15+) IN00972281 Life-long learning facilitators (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2,500.00 IN00972282 Life-long learning facilitators (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 25.00 IN00972283 Beneficiaries of social transfers in urban areas (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 9,476.00 5,000.00 IN00972284 Beneficiaries of social transfers in urban areas (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 20.00 IN00972285 Beneficiaries of social transfers in rural areas (Number, Custom Supplement) 4/28/2021 Page 3 of 9 The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10,000.00 IN00972286 Beneficiaries of social transfers in rural areas (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 IN00972287 ►Adults making or receiving digital payments in the past year (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 34.00 34.00 32.00 42.00 Date 31-Dec-2017 21-Mar-2019 31-Dec-2019 31-Dec-2023 The percentage of respondents who report using mobile money, a debit or credit card, or a mobile phone to make a payment from an account, or report using the internet to pay bills or to buy something online, in the past 12 months. It also includes respondents who report paying bills, sending or receiving remittances, Comments: receiving payments for agricultural products, receiving government transfers, receiving wages, or receiving a public sector pension directly from or into a financial institution account or through a mobile money account in the past 12 months. IN00972288 Women (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 27.00 27.00 27.00 40.00 Date 31-Dec-2017 21-Mar-2019 21-Mar-2019 31-Dec-2023 IN00972289 Men (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 42.00 42.00 42.00 50.00 Date 31-Dec-2017 21-Mar-2019 21-Mar-2019 31-Dec-2023 IN00972290 Poorest 40% of the population (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 20.00 20.00 20.00 28.00 IN00972291 ►Active mobile money agents (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 25,000.00 62,026.00 69,548.00 50,000.00 Date 31-Dec-2016 31-May-2020 31-Dec-2020 31-Dec-2023 4/28/2021 Page 4 of 9 The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) Comments: Certified agents of electronic money institutions. IN00972292 Districts covered by active mobile money agents (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 77.00 77.00 91.60 90.00 IN00972293 ►MSMEs that received loans secured by movable assets registered in the collateral registry (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 3,750.00 Date 30-Sep-2018 21-Mar-2019 31-Dec-2020 31-Dec-2023 Number of individual entrepreneurs and legal entities classified as micro, small, or medium enterprise (as per the existing legislation) that have received a credit from a financial institution that has registered in the Comments: collateral registry a security interest of a movable asset given as collateral by the borrower (individual entrepreneur and legal entity). Strengthening financial safety nets IN00972278 ►Size of the deposit insurance fund as a share of total deposits (without contributions from other development partners) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.05 0.05 0.05 0.25 Date 31-Aug-2018 21-Mar-2019 31-Oct-2020 31-Dec-2023 The fund size is the market value in local currency of the DGF assets. The value of total deposits is the Comments: local currency value of the deposits in the banking system. The indicator excludes potential contributions by development partners other than the World Bank. Intermediate Results Indicators by Components Increasing usage of transaction accounts and access to finance for MSMEs IN00972294 ►IT solution that enables Treasury to interface with e-money payment systems installed and operational (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 30-Jun-2021 The Government's financial management system (eSistafe) is expected to be able to make payments Comments: directly into a mobile account. Currently, the system can only make payments to bank accounts. IN00972296 ►Individuals benefitting from financial literacy awareness program (Number (Thousand), Custom) 4/28/2021 Page 5 of 9 The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 1,000.00 Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 31-Dec-2023 Number of individuals that attended a financial education session or event or received specific training on Comments: the use of a new payment technology or money management. These events should last at least 15 minutes. IN00972298 ►Recipients of government transfers reporting satisfaction with the digitized payment method(s) (citizen engagement) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 66.00 Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 31-Dec-2023 IN00972300 ►A centralized, web-based collateral registry established and operational (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 30-Jun-2021 A registry for security interests in movable property that is accessible through web and is centrally Comments: managed by an authorized body of the Government. Strengthening financial safety nets IN00972295 ►Strengthened bank recovery resolution framework (Yes/No, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 30-Jun-2020 Comments: Described in the DLI Verification Protocol IN00972297 ►Improved DGF’s ability to undertake deposit insurance functions (Yes/No, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 31-Dec-2023 Comments: Described in the DLI Verification Protocol IN00972299 ►Expanded coverage of deposit insurance (Yes/No, Custom, PBC) 4/28/2021 Page 6 of 9 The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 30-Jun-2021 Comments: Described in the DLI Verification Protocol IN00972301 ►Insurance companies among the five largest with integrated connections to the supervisory reporting system (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 3.00 Date 30-Sep-2018 21-Mar-2019 21-Mar-2019 31-Dec-2023 Number of insurance companies (among the five largest by assets) that have a direct application Comments: programming interface with the supervisory reporting system for data transmission to the insurance regulator. Performance-Based Conditions IN00972302 ►PBC 1 Strengthened bank recovery resolution framework (Yes/No, Output, 4,000,000.00, 10.00%) Baseline Actual (Previous) Actual (Current) Year 3 Value No No No -- Date -- 21-Mar-2019 21-Mar-2019 -- IN00972303 ►PBC 2 Improved DGF’s ability to undertake deposit insurance functions (Yes/No, Output, 4,000,000.00, 10.00%) Baseline Actual (Previous) Actual (Current) Year 3 Value No No No -- Date -- 21-Mar-2019 21-Mar-2019 -- IN00972304 ►PBC 3 Expanded coverage of deposit insurance (Yes/No, Intermediate Outcome, 4,000,000.00, 10.00%) Baseline Actual (Previous) Actual (Current) Year 3 4/28/2021 Page 7 of 9 The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) Value No No No -- Date -- 21-Mar-2019 21-Mar-2019 -- Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P166107 IDA-D4050 Effective USD 40.00 40.00 0.00 2.72 39.12 6.5% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P166107 IDA-D4050 Effective 13-Dec-2018 01-Feb-2019 29-Aug-2019 30-Jun-2024 30-Jun-2024 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC 4/28/2021 Page 8 of 9 The World Bank Implementation Status & Results Report Mozambique: Financial Inclusion and Stability Project (P166107) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 4/28/2021 Page 9 of 9