Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) Innovative Access to Finance (P147183) EUROPE AND CENTRAL ASIA | Turkey | Finance & Markets Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 5 | ARCHIVED on 26-Dec-2016 | ISR26507 | Implementing Agencies: Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) Key Dates Key Project Dates Bank Approval Date:22-Jul-2014 Effectiveness Date:04-Dec-2014 Planned Mid Term Review Date:15-Mar-2017 Actual Mid-Term Review Date:15-Dec-2016 Original Closing Date:31-Dec-2018 Revised Closing Date:31-Dec-2018 Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to improve access to longer term Islamic finance and to factoring for small and medium enterprises and export oriented enterprises. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name A credit line to TSKB to on-lend/finance intermediation through participation bank and factoring company PFIs to SMEs and EOEs.:(Cost $250.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Satisfactory Overall Risk Rating  Low  Low Implementation Status and Key Decisions The Loan became effective on December 4th, 2014. World Bank disbursements to TSKB has been slow in 2015 characterized by the uncertainty 12/26/2016 Page 1 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) surrounding the election period, and the rising and volatile foreign exchange rates. In spite of continuing global and domestic uncertainties in 2016 disbursements have picked up significantly and registered an increase from US $ 39.5 million in February 2016 to US $ 147.9 million in December 2016. TSKB disbursement to Participating Financial Institutions (PFIs - Participation Banks and Factoring Companies) increased even more and amounted to US $ 185 million (74 percent of the loan) by December 2016. In addition, the commitment of the last remaining portion of the Loan was completed in May 2016 and remaining 48.7 million was allocated to Ziraat Participation Bank. Ziraat is expected to further help improve the disbursement rate. Now there are 7 PFIs in total comprising of four participation banks and 3 factoring companies. Due to global and domestic uncertainties exchange rate volatility is high and growth expectations are milder which is limiting investment appetite and loan demand. Nevertheless, the pre-approved pipeline appears healthy, the commitment of the last remaining portion of the Loan with a new participation bank is expected to further help improve the disbursement rate, and TSKB is actively managing foreign exchange issues and PFI demand. Project continues to perform well in terms of achieving project development objectives. According to the indicators of the maturity performance of Islamic sub-financing and export factoring of factoring sub-financing, the project continues to exceed the targets. Weighted average maturity of Islamic sub-financing under the project is 2.7 times higher than the average maturity under PFIs own portfolio. Share of export factoring is 26.7 times higher compared to the share of export factoring in PFI’s own portfolio. In total 194 SMEs and LEs have been financed under the project. 15 percent priority region disbursement requirement has already been met. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Moderate  Moderate Macroeconomic  --  Moderate  Moderate Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Low  Low Institutional Capacity for Implementation and Sustainability  --  Low  Low Fiduciary  --  Low  Low Environment and Social  --  Low  Low Stakeholders  --  Low  Low Other  --  --  Low Overall  --  Low  Low Results 12/26/2016 Page 2 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) Project Development Objective Indicators PHINDPDOTBL  Ratio of the average maturity of Islamic sub-financing under the project, over the average maturity of the Islamic finance PFIs’ portfolio not financed under the project. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 3.30 2.70 >1 Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDPDOTBL  Ratio of export factoring sub-financing in the fact. portfolio financed under the project, over the fact. comp. PFIs’ export factoring finance in the factoring portfolio not financed under the project (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 18.60 26.60 >1 Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDPDOTBL  Number of SME beneficiaries financed by PFIs under the project (cumulative). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 17.00 82.00 300.00 Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDPDOTBL  Number of EOE beneficiaries financed by PFIs under the project (cumulative). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 40.00 112.00 30.00 Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 Overall Comments Intermediate Results Indicators 12/26/2016 Page 3 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) PHINDIRITBL  Number of PFIs under the project (cumulative). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 6.00 7.00 6.00 Date 01-Aug-2014 16-Feb-2016 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Volume of Bank support (cumulative, US$ million). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 36.00 147.90 250.00 Date 01-Aug-2014 29-Jan-2016 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Based on Core Indicator: Volume of Bank Support: Lines of Credit - SME (cumulative, US$ million). (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 7.70 54.10 150.00 Date 01-Aug-2014 29-Jan-2016 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Outstanding export finance portfolio (US$ million). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 2,397 1,430 n/a Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 12/26/2016 Page 4 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) PHINDIRITBL  Based on Core Indicator: Outstanding SME finance portfolio (US$ million). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 8,383 11,803 n/a Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Number of active export finance accounts (not cumulative). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 1,510 488.00 n/a Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Based on Core Indicator: Number of active SME finance accounts (not cumulative). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value n/a 44,444 96,432 n/a Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Based on Core Indicator: Portfolio Quality: Portfolio at risk (%). (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.40 0.50 0.40 n/a Date 31-Dec-2013 21-Dec-2015 01-Dec-2016 31-Jul-2018 12/26/2016 Page 5 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) PHINDIRITBL  Based on Core Indicator: Financial Sustainability: Return on Assets (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.80 2.40 2.30 n/a Date 31-Dec-2013 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Based on Core Indicator: Financial Sustainability: Return on Equity (%) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 17.90 18.30 18.90 n/a Date 31-Dec-2013 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Percent of SME sub-finance financing SME Sub-projects in priority regions. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 15.00 15.00 Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 PHINDIRITBL  Compliance with prudential regulation. (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Y Y Y Y Date 01-Aug-2014 21-Dec-2015 01-Dec-2016 31-Jul-2018 Overall Comments Data on Financial Performance 12/26/2016 Page 6 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P147183 IBRD-84090 Effective USD 250.00 250.00 0.00 138.22 101.41 55% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P147183 IBRD-84090 Effective 22-Jul-2014 22-Aug-2014 04-Dec-2014 31-Dec-2018 31-Dec-2018 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/26/2016 Page 7 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Innovative Access to Finance (P147183) 12/26/2016 Page 8 of 8 Public Disclosure Copy