The World Bank Report No: ISR14946 Implementation Status & Results Malawi Malawi - Financial Sector Technical Assistance Project (P122616) Public Disclosure Copy Operation Name: Malawi - Financial Sector Technical Assistance Project Project Stage: Implementation Seq.No: 6 Status: ARCHIVED Archive Date: 25-Jun-2014 (P122616) Country: Malawi Approval FY: 2011 Product Line: IBRD/IDA Region: AFRICA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 24-Mar-2011 Original Closing Date 31-Aug-2016 Planned Mid Term Review Date 03-Nov-2014 Last Archived ISR Date 29-Dec-2013 Effectiveness Date 22-Dec-2011 Revised Closing Date 31-Aug-2016 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The project aims to increase access to finance for the currently unbanked, but bankable, population of Malawi. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Component 1: Financial Sector Regulation and Supervision 5.32 Component 2: Financial Infrastructure 13.22 Component 3: Financial Consumer Protection and Financial Literacy 3.02 Component 4: Ministry of Finance's Financial Sector Policy and Governance Capacity and Long-term 3.39 Finance Component 5: Implementation Support 3.26 Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status Overview Project was declared effective on 22 December 2011 and formally Launched in February 2012. The first supervision mission was held from 11-12 June, 2012. The overall project Page 1 of 7 The World Bank Report No: ISR14946 implementation for FSTAP has been maintained at Satisfactory from the previous ISM in October 2013, mainly on account of of the fact that 41% of total project funds have been disbursed. Public Disclosure Copy Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target PDO Indicator one: Increase in the percentage Percentage Value 19.00 19.00 40.00 of the adult population that use formal financial Date 24-Mar-2011 05-May-2014 31-Aug-2016 institutions. Comments 19% of individuals are To be determined through To be determined through formally banked FINSCOPE Survey at regular FINSCOPE Survey intervals during the life of the project. A new FINSCOPE Survey is being finalized and data will be used in next ISR in November 2014. Current figure is from 2009 FINSCOPE Survey PDO Indicator two: Increase in the proportion Percentage Value 17.00 17.00 40.00 of women within the adult population that is Sub Type Date 24-Mar-2011 05-May-2014 31-Aug-2016 formally banked. Breakdown Comments 17% of adult women are To be determined through To be determined through formally banked FINSCOPE Survey at regular FINSCOPE Survey intervals during the life of the project. A new FINSCOPE Survey is being finalized and data will be used in next ISR in November 2014. Current figure is from 2009 Public Disclosure Copy FINSCOPE Survey Intermediate Results Indicators Page 2 of 7 The World Bank Report No: ISR14946 Indicator Name Core Unit of Measure Baseline Current End Target Indictor One: Key regulations and supervision Text Value Existing regulatroy framework Development and 2nd group of key regulations/ manuals issued to support implementation of needs to be upgraded in order implementations of new supervision manuals issued Public Disclosure Copy the 10 new financial laws which have to support the implementation regulations and manuals beenpassed recentlyu or to be passed over the of the 7 new laws passed in ongoing. life of the project. the last 2 years, in addition to the 3 news bills that are expected to be passed later. Date 24-Mar-2011 31-Jul-2013 31-Aug-2016 Comments Work on Problem Bank Resolution expected to strengthen key regulations and supervision manuals. The Bank supervision long term advisor expected to start in June 2014 will also strengthen this. Indicator Two: Automated tools for offsite Text Value Offsite and macro-prudential Offsite and macro-prudential Analytical tools for offsite surveillance and macro-prudential analysis Sub Type analysis is not supported by analysis is not supported by monitoring and analysis used designed, acquired and implemented. automated analytical tools automated analytical tools in day-to-day work. Breakdown using comprehensive reliable using comprehensive reliable Stability Report updated and and timely data and timely data published at least Annually Date 24-Mar-2011 05-May-2014 31-Aug-2016 Comments A consultant is currently reviewing system design for FISSIS Work ongoing Indicator Three: RBM staff trained in uses of Text Value No automated analytical tools No automated analytical tools 100% of staff Trained analytical tools and regarding new regulations Sub Type are available and staff do not are available and staff do not have hand-on experience have hand-on experience Breakdown using them using them Date 24-Mar-2011 05-May-2014 31-Aug-2016 Comments A consultant is currently Public Disclosure Copy reviewing system design for FISSIS Work ongoing Core functions of the FSPU executed by Text Value Role of the MoF in financial 90% of FSPU trained but 100% FSPU staff trained and appropriately trained staff Sub Type sector policy formulation and business plan not yet annual business plan targets monitoring is limited developed. met Breakdown Date 24-Mar-2011 25-Oct-2013 31-Aug-2016 Comments The long-term Financial Sector Policy Advisor has been engaged . Page 3 of 7 The World Bank Report No: ISR14946 Transactions volume and value processed by Text Value 159,625 ATS, National Switch and MFI 20% new payments systems (RTGS, National Sub Type TPH not yet live Switch, MFI TPH) MWK 10% Breakdown 4,253 Billion Public Disclosure Copy Date 24-Mar-2011 05-May-2014 31-Aug-2016 Comments New systems not yet in place. ATS (RTGS) will be live in August 2014 and National Switch in September 2014. Number of participating members of all 3 Text Value Proposed National Switch not Proposed National Switch not 6 members of National Switch payments systems Sub Type yet operational yet operational Breakdown Date 24-Mar-2011 05-May-2014 31-Aug-2016 Comments National Switch due to be operational in September 2014 but all banks have signed up although not all will be connect on go live date. New RTGS, NS and MFI-TPH systems in Text Value RTGS Existing system runs in This is currently being carried New RTGS system in smooth operation consistent with system integration Sub Type parallel with multiple dated out. operation requirements and interoperable (NS) systems Breakdown Current version is not National Switch in smooth supported by vendor beyod opeastion 2011 NS - Majority Govt-owned MFI TPH in smooth operation Malswitch operates a switching platform which is not interoperable and lacks broad participation by financial institutions in Malawi There is no centralized processing hub Date 24-Mar-2011 05-May-2014 31-Aug-2016 Public Disclosure Copy Comments New ATS (RTGS) has been installed and is running as well as National Switch. Legal and regulatory framework for consumer Text Value The Financial Services Act Still being drafted. 3rd priortiy regulations drafted protection prepared and presented to Cabinet Sub Type includes some major provisions on consumer Breakdown protection, and gives the RBM authority to regulate and supervise consumer Page 4 of 7 The World Bank Report No: ISR14946 protection issues in financial Date services. 24-Mar-2011 05-May-2014 31-Aug-2016 Comments A diagnostic Review on Public Disclosure Copy consumer protection legal and regulatory framework has been conducted. Institutional arrangements for consumer Text Value The RBM's consumer The RBM's consumer 4th priority measures of protection in all financial services implemented Sub Type protection unit (CPU) has protection unit (CPU) has instituional program are been created (but not staffed been created and staffed implemented Breakdown within the microfinance and within the microfinance and capital markets unit. capital markets unit. Date 24-Mar-2011 05-May-2014 31-Aug-2016 Comments The RBM has already established the consumer education and complaints handling unit which has been mandated to coordinate all financial consumer education and consumer protection activities. The unit is now operational. Increased awareness of rights as financial Text Value Consumer rights in financial A financial capability survey Consume rights awareness: consumers among population reached by Sub Type services is a nascent concept has been finalized to establish Baseline +15% financial literacy campaign; of which women and a measurement of baseline. Breakdown awareness of the rights needs financial literacy campaign to be developed through 100% of targeted population Baseline survey reached No systematic financial literacy campaign has been conducted in Malawi Date 24-Mar-2011 05-May-2014 31-Aug-2016 Public Disclosure Copy Comments State ownership policy in financial sector Text Value No explicity state-ownership A Cabinet paper on state Policy implemented developed, published and implemented Sub Type policy has been issued ownership in the financial sector was approved in late Breakdown 2013. Date 24-Mar-2011 30-Jun-2013 31-Aug-2016 Comments FSTAP has been supporting implementation of Cabinet decision through TA for Page 5 of 7 The World Bank Report No: ISR14946 transaction advisor to MSB, Indebank and others. Core functions of the FSPU executed by Text Value Role of the MoF in financial Training is ongoing and 100% FSPU staff trained and appropriately trained staff sector policy formulation and annual business plan being annual business plan targets Public Disclosure Copy Sub Type monitoring is limited finalized by Advisor met Breakdown Date 24-Mar-2011 05-May-2014 31-Aug-2016 Comments A long-term Financial Sector Policy Advisor has been engaged. Policy frameworks for the provision of long Text Value Long-term financing is a Study on Development Bank Detailed sectoral (pensions term financing which should include (i) equity Sub Type nascent concept in Malawi support as well as Capital and insurance, credit and debt/leasing financing, (ii) PPP and no sysematic analysis Development Plan. guarantees and leasing) Breakdown forinfrastructure, (iii) development of long-term has been carried out on the studies reviews completed savings and investmen subject matter studies Date 24-Mar-2011 05-May-2014 31-Aug-2016 Comments TA provided Data on Financial Performance (as of 01-Apr-2014) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P122616 IDA-48970 Effective 24-Mar-2011 02-Nov-2011 22-Dec-2011 31-Aug-2016 31-Aug-2016 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P122616 IDA-48970 Effective XDR 18.10 18.10 0.00 7.37 10.73 41.00 Disbursement Graph Public Disclosure Copy Page 6 of 7 The World Bank Report No: ISR14946 Public Disclosure Copy Key Decisions Regarding Implementation The overall project implementation for FSTAP has been maintained at Satisfactory mainly on account of of the fact that 41% of total project funds have been disbursed. Restructuring History There has been no restructuring to date. Related Projects There are no related projects. Public Disclosure Copy Page 7 of 7