The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) REPORT NO.: RES30957 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF RAJASTHAN RURAL LIVELIHOODS PROJECT (RRLP) CREDIT NO. 4859-IN APPROVED ON JANUARY 11, 2011 TO THE GOVERNMENT OF INDIA AGRICULTURE GLOBAL PRACTICE SOUTH ASIA REGION Regional Vice President: Annette Dixon Country Director: Junaid Kamal Ahmad Senior Global Practice Director: Juergen Voegele Practice Manager/Manager: Shobha Shetty Task Team Leader: Adarsh Kumar, Pushina Kunda Ng'andwe The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) ABBREVIATIONS AND ACRONYMS CD Country Director CBO Community Based Organization CDO Cluster Development Organizations CLF Cluster Level Federations PDO Project Development Objective RGAVP Rajasthan Grameen Ajeevika Vikas Parishad SHG Self-Help Group USD US Dollar The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) BASIC DATA Product Information Project ID Financing Instrument P102329 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 11-Jan-2011 15-Oct-2018 Organizations Borrower Responsible Agency Government of Rajasthan Rajasthan Grameen Ajeevika Vikas Parishad (RGAVP) Project Development Objective (PDO) Original PDO To enhance economic opportunities and empowerment of the rural poor, with a focus on women and marginalized groups, in the 17 targeted districts of Rajasthan. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-48590 11-Jan-2011 24-May-2011 22-Jun-2011 15-Oct-2018 122.84 104.96 10.49 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. This restructuring paper seeks the approval of the Country Director for a Level-II restructuring of the Rajasthan Rural Livelihoods Project (RRLP). The proposed changes include: (i) amendments to the Results Framework to better reflect Project Development Objectives; and (ii) re-allocation of credit proceeds across project components. 2. The re-allocation of credit proceeds across project components has been requested to align with approved implementation planning projections and the revisions to the Results Indicators are to allow for better measurement of project impact. 3. This is the third restructuring of the project. The first restructuring was approved in January 2014 to cancel XDR 26 million (US$40 million) and make corresponding adjustments to credit proceeds for project components. The second restructuring was approved in April 2016 to drop a Climate Change Adaptation component because all related interventions were being consolidated under a different implementing agency. The restructuring also extended the closing date for the project by two years to October 15, 2018 so as to fully disburse credit proceeds and achieve the Project Development Objective. PROJECT STATUS 4. The Project Development Objective is to enhance economic opportunities and empowerment of the rural poor, with a focus on women and marginalized groups, in the 17 targeted districts of Rajasthan. 5. The project suffered from low disbursements and was in problem status up to 2016 due to initial delays in hiring project staff after effectiveness. Following the restructuring of the project, the pace of implementation and disbursement improved significantly resulting in an upgrade of project ratings to “Moderately Satisfactory” in June 2016. Overall, project performance indicators point to strong performance including exceeding initial project goals of number of poor women beneficiaries reached; a high proportion (95%) of SHG members having accessed loans; relatively high repayment rates (95% at SHG level); and a substantial number of households (80,000) using livelihoods services and adopting improved livelihoods practices across agriculture, horticulture, dairy and animal husbandry. The total number of SHGs mobilized stand at 53,000, exceeding the project end goal of 33,000 SHGs. 34,419 SHGs have received both the first and second tranche of project financing respectively, and 23,756 SHGs have been linked to bank credit; and 3,500 Village Organizations (VOs) and 185 Cluster Level Federations (CLFs), federated community organizations of SHGs at the village and block level respectively, have been formed. As of December 2017, the project has disbursed 85% of the total credit amount and is expected to fully disburse by the closing date of October 15, 2018. II. DESCRIPTION OF PROPOSED CHANGES 6. The restructuring paper proposes reallocation of costs across three out of four project components: 1) Institutional Building and Social Empowerment; 2) Community Investment Support; and 3) Skills Development and Empowerment Promotion based on actual expenditures so far and implementation projections up to the close of the project. The budget allocation to Component 2, which finances SHGs, VOs and CLFs formed, has The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) been decreased as approximately 70% of the SHGs formed have been financed so far and the remaining will be financed through rotation of the funds provided through the higher-level federated community institutions formed. The allocation to Component 1, which supports mobilization and capacity building, has been increased to strengthen handholding services to CLFs and VOs formed. The allocation to Component 3, which support skills training and employment promotion efforts, has been enhanced so to provide continued support to pilot projects on non-farm employment being implemented by the project. 7. Based on a request by the Rajasthan Grameen Ajeevika Vikas Parishad (RGAVP) – the project implementing organization - flagging problems with the existing results indicators, joint reviews and discussions of the results framework were undertaken. A number of existing PDO indicators were found to be ambiguously worded, leaving room for different interpretations and making measurement of outcomes difficult. Based on discussions with RGAVP, a number of PDO indicators have been dropped, added or refined to remove these ambiguities and to better measure outcomes along the three core PDO objectives of targeting poor and marginalized populations, enhancing their economic opportunities and aspects of their social empowerment. Annex 1 lists changes made and the updated results framework. The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) III. SUMMARY OF CHANGES Changed Not Changed Change in Results Framework ✔ Change in Components and Cost ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Project's Development Objectives ✔ Change in Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ Change in Systematic Operations Risk-Rating Tool ✔ (SORT) Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Change in Implementation Schedule ✔ Other Change(s) ✔ Change in Economic and Financial Analysis ✔ Change in Technical Analysis ✔ Change in Social Analysis ✔ Change in Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE At least 70% of the 33,000 SHGs supported by the project are financially viable and institutionally sustainable Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 52.00 70.00 Marked for Deletion Date 29-Jun-2011 15-Jun-2014 15-Oct-2018 Increase in number of sources of household income reported in at least 70% of the targeted households. Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) Value 0.00 27.00 70.00 Marked for Deletion Date 29-Jun-2011 15-Jun-2014 15-Oct-2018 Reliance on informal credit sources drops by 90% among members of Grade "A" SHGs Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 65.00 8.10 6.50 Marked for Deletion Date 29-Jun-2011 15-Jun-2014 15-Oct-2018 At least 50% of grade ‘A’ SHG members routinely participate in Gram Sabha and other village meetings Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 5.00 50.00 50.00 Marked for Deletion Date 29-Jun-2011 15-Jun-2015 15-Oct-2018 Total number of Women Project Beneficiaries Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 350000.00 New Date 18-Dec-2017 15-Oct-2018 Of which, proportion belonging to marginalized groups. Unit of Measure: Percentage Indicator Type: Custom Supplement Baseline Actual (Current) End Target Action Value 0.00 55.00 New Percentage of SHG members that have developed additional productive assets Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 50.00 New Date 18-Dec-2017 15-Oct-2018 Total funds managed by functioning apex community federations. Unit of Measure: Amount(USD) Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 35000000.00 New Date 18-Dec-2017 15-Oct-2018 Intermediate Indicators IO_IND_TABLE The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) Number of functioning SHGs estabished Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 40000.00 New Date 14-Dec-2010 15-Oct-2018 Number of functioning Village Organizations / Cluster Level Federations established Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 4000.00 New Date 14-Dec-2010 15-Oct-2018 Number of functioning Community Level Federations established Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 120.00 New Date 14-Dec-2010 15-Oct-2018 At least 70% of grade "A" SHG members avail credit from inter-loaning within their groups Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 34.00 55.00 70.00 Revised Date 29-Jun-2011 30-Nov-2015 15-Oct-2018 At least 80% of the grade A SHGs have accessed credit support from the CDO Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 80.00 No Change Date 29-Jun-2011 20-Aug-2012 15-Oct-2018 At least 70% of the CDOs report receiving financial services from their respective Community Level Federations Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 70.00 New Date 14-Dec-2010 15-Oct-2018 At least 50% of Grade 'A' SHGs obtain credit from banks Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 50.00 New Date 14-Dec-2010 15-Oct-2018 The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) At least 50% of grade A SHG members obtain credit support for productive activity Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 50.00 New Date 14-Dec-2010 15-Oct-2018 At least ten functioning Producer Organizations are established Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 17.00 10.00 Revised Date 29-Jun-2011 30-Dec-2016 15-Oct-2018 At least 17,000 youth (including more than 33% women) from the project villages are placed in appropriate jobs as a result of project efforts Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 5666.00 17000.00 Revised Date 29-Jun-2011 30-Dec-2016 15-Oct-2018 Project management has satisfactorily addressed statutory audit findings according to agreed RRLP business standards Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 1.00 100.00 Revised Date 29-Jun-2011 30-Dec-2016 15-Oct-2018 Complaints received by the Complaints Handling unit in the SPMU have been addressed, according to agreed RRLP business standards Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 100.00 New Date 14-Dec-2010 15-Oct-2018 Regular M & E Reports listing progress on core project parameters developed and disseminated to stakeholders Unit of Measure: Yes/No Indicator Type: Custom Baseline Actual (Current) End Target Action Value No Yes Yes New Date 14-Dec-2010 15-Oct-2018 The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Institution Building and Social Institution Building and Social 39.00 Revised 34.56 Empowerment Empowerment Community Investment Community Investment Support 82.60 Revised 81.76 Support Skills Development and Skills Development and 6.30 Revised 7.42 Employment Promotion Employment Promotion Project Implementation Project Implementation Support 14.90 No Change 14.90 Support TOTAL 142.80 138.64 The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) Annex 1: Results Framework and Monitoring India: Rajasthan Rural Livelihoods Project (RRLP) Project Development Objective (PDO): To enhance the economic opportunities and empowerment of the rural poor, with a focus on women and marginalized groups, in the 17 targeted districts of Rajasthan. C=Continue Cumulative Target Values** / No Change Data Source/ Responsibility Description PDO Level Results Unit of Base D=Dropped Frequency for Data (indicator Core Indicators* Measure line Methodology YR 1 YR 2 YR 3 YR 4 YR5 YR6 YR7 Collection definition etc.) N= New R=Revised There is evidence that with increase Increase in number in savings and of sources of Dropped Annual, Households/ enhanced support household income mid-term Periodic External M&E for enterprise reported in at least 0 0% 5% 30% 40% 50% 60% 70% % and end- sample agency activities, there is 70% of the of-project surveys diversification in targeted sources of households1,2 household income As households get linked with Reliance on financial Dropped SHGs/ semi- informal credit PFT/ external institutions, sources drops by 24%4 30% 45% 60% 65% 70% 80% 90% Annual structured % M&E agency reliance on 90% among interviews members of grade informal credit ‘A’ SHGs3 sources is reduced SHG self- An SHGs ability At least 70% of the scoring and to continue to 33,000 SHGs 30- 60% 70% PFT meet and inter- Dropped % 40%6 40% 50% 55% 55% 60% Annual CRPs/ PFTs supported by the facilitated loan among project are institutional members reduces assessment 3 It is estimated that 70% of the project supported SHGs will obtain Grade A 4 Source: CmF, 2010 6 based on case studies; exact values to be determined The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) financially viable external and institutionally dependence. sustainable5 At least 50% of Quarterly/ Attendance and Gram participation in grade ‘A’ SHG six- Panchayat village meetings members routinely monthly records/ provides an < 5% 5% 20% 30% 30% 40% 50% participate in Gram Dropped % (correspo CRPs/ PFTs opportunity for Sabha and other nding with Review of women to express records their views on village meetings 30% GS) issues that concern them. Revised Number of Loans women SHG Indicator 1: Number of women 50,0 100, 200, 300,0 350,0 registers of members Numbe 0 10,000 Annual accessing credit project 00 000 000 00 00 SHGs/ SPMU CRPs/ PFTs r through project beneficiaries 270,00 records interventions. 0 Proportion of - Of which, SHG women proportion New belonging to belonging Percen 0 5% 10% 15% 20% 45% 55% Annual Scheduled Tribe to tage and Scheduled marginaliz Caste groups. ed groups. 35% Indicator 2: New Proportion of Percentage of SHG M&E Data/ SHG members DPMU/SPM who have members that have Percen 0 0 5 10 15 40 50 Annual sample U/ External developed developed tage surveys M&E agency livelihoods related additional 20 productive assets assets. Indicator 3: New 10 Financial Total funds Funds managed Numbe records of managed by by functioning7 r (USD 0 0 0 0 0 25 35 Annual DPMU/SPM functioning apex CLFs / federated Millio U/ community DPMUs institutions owned n) federations (Cluster and managed by Level Federations.) poor women. INTERMEDIATE RESULTS Intermediate Result (Component One): Institution Building and Social Empowerment Cumulative Target Values** Data Source/ Responsibility Description Unit of Baseli Results Indicators* Frequency for Data (indicator Core Measure ne Methodology YR 1 YR 2 YR3 YR 4 YR 5 YR 6 YR 7 Collection definition etc.) SHG-Bank 1.1 At least 50% of SHG linkage is the 40% 50% Grade ‘A’ SHGs % 0 5% 10% 15% 20% Annual records/ PFT/ DPMU sustainable route obtain financial No 30% MIS to financial Change empowerment of 5 Sustainability is defined as being active (i.e. regular attendance at meetings), financially viable (i.e. taking and repaying loans) and a governance structure that ensures independence and representation. 7 Functioning is defined as regular meetings, and rotation of funds to VOs and SHGs. The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) assistance/credit SHGs/ its from banks members This indicator 1.2 At least 70% of captures the grade ‘A’ SHG SHG within group members avail records/ SHGs/ PFT/ dynamics of loan Six- No 65% 70% questionnair process distribution credit from inter- % 34%8 - 35 45 55 60% monthly/ Change e survey monitoring among members – loaning within annually Process agency whether or not their groups monitoring majority members are benefiting from credit. 1.3 At least 80% of Funds CDO self- management is the CDOs in the assessment/ the primary Annually project villages No 65% 80% PFT PFT/ DPMU function of CDOs, % 0 - 50% 50% 50% 50% from Y2 manage (project) Change facilitated and being able to onwards assessment do this efficiently funds efficiently9 of CDOs indicates their maturity 1.4 At least 70% of the CDOs report Area federations at the PFT level receiving services (Cluster Level from their Federations) will Annually sustain only if respective PFT- 55% 70% CDOs/ FGD External No % 0 - - 30% 35% 40% from Y3 they are perceived level Area with CDOs M&E agency Change onwards as providing Federations value-added (Cluster Level services to their Federations) constituents, viz., CDOs 1.5 Number of SHGs following 30,00 40,00 basic five Functioning SHGs Numbe 8,00 10,0 20,0 SHG SPMU / New 0 5,000 25,000 0 0 Annual principles of established r 0 00 00 Records DPMU operations10. 1.6 Number of Higher level functioning Village federations of Numbe 3,000 4,000 SPMU / SHGs -VOs - Organizations New 0 - - 100 500 1000 Annual VO records r DPMU inter-loaning established funds to SHGs/ 1.7 Number of Higher level Functioning Cluster federations of Numbe 80 120 SPMU/DPM SHGs - CLFs - Level Federations New 0 - - - - 25 Annual CLF records r U inter-loaning established. funds to VOs Intermediate Result (Component Two): Community Investment Support 8There are no reliable studies undertaken in this regard; one study cited in CmF, 2010 states that only in 34% groups, more than 10 members availed credit. Includes transfer of funds to SHGs as per RRLP’s business standards 9 10 Regular meetings, regular savings, regular inter-loaning, regular repayments, maintaining books of accounts. The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) 2.1 At least 80% of Funds for SHGs Grade A SHGS have will be routed Annually through CDOs; % accessed credit 65% 80% No % 0 - 30% 40% 40% 50% from Y2 CMIS PFT SHGs receiving support from the Change Onwards credit from CDO CDO indicated efficiency. 2.2 At least 40% of Funds for SHGs the grade A SHGs will be routed have accessed through CDOs; % Annually credit support 35% 40% SHGs receiving % 0 - 5% 10% 15% 20% from Y2 CMIS PFT from the CDO Dropped. credit from CDO onwards indicates its efficiency Data Source/ Responsibility Description Cumulative Target Values** Frequency for Data (indicator Unit of Baseli Results Indicators* Methodo- Collection definition etc.) Core Measure ne logy YR 1 YR 2 YR3 YR 4 YR 5 YR 6 YR 7 ‘Productive activity’ defined 2.3 At least 50% of as any activity grade A SHG SHG/ that is likely to Review of result in an members obtain Percen 45% 50% External No 24%11 30% 35% 35% 35% 40% Annually SHG records increase in credit support for t SHGs M&E agency Change and FGD income in the productive activity with SHGs short- to medium- term (6 months – 2 years) 2.4 At least 10 viable and ‘Sustainable’ PO defined as being sustainable active, financially Annually Producer Numbe 9 10 External viable and having No 0 - - 3 5 7 from Y3 SPMU Organizations r M&E agency a sound Change onwards governance (POs) are structure established Intermediate Result (Component Three): Skills Development and Employment Promotion 1500 1700 Annually MIS (?)/ SPMU/ A direct result of Numbe 3.1 At least 17,000 0 - 3000 5000 7500 10000 0 0 from Y2 Project external M&E the project’s r onwards records agency interventions for youth (including 11 Studies in Rajasthan have indicated that only 24% of the SHG members who avail loans use it for income generation activities The World Bank Rajasthan Rural Livelihoods Project (RRLP) (P102329) more than 33% No enhancing women) from the Change employable skills and providing project villages are jobs to rural youth placed in appropriate jobs as a result of project efforts Intermediate Result (Component Four): Project Implementation Support 5.1 Project management has satisfactorily addressed statutory No 100 100 100 100% 100% 100% Audit DPMU / % 0 100% Annually audit findings Change % % % Reports SPMU according to agreed RRLP business standards 5.2 Regular M & E Reports listing progress on core Yes / Yes Yes M&E DPMU / project parameters No No No No Yes Yes Yes Annually No Reports SPMU developed and Change disseminated to stakeholders. 5.3 Complaints received by the Complaints Handling unit in the No 100 100 100 100% 100% ON LINE DPMU / SPMU have been Change % 0 100% 100% Annually % % % SYSTEM SPMU addressed, according to agreed RRLP business standards