Completion Report Project Number: 45230-001 Loan Numbers: 2922 and 2923 Technical Assistance Number: 8200 September 2018 Armenia: Women’s Entrepreneurship Support Sector Development Program This document is being disclosed to the public in accordance with ADB's Public Communications Policy 2011. CURRENCY EQUIVALENTS Currency unit – dram (AMD) At Appraisal At Project Completion (30 July 2012) (31 December 2017) AMD1.00 = $0.002455 $0.002076 $1.00 = AMD407.65 AMD481.76 ABBREVIATIONS ADB – Asian Development Bank BDS – business development services CBA – Central Bank of Armenia DMF – design and monitoring framework EBRD – European Bank for Reconstruction and Development ESMS – environmental and social management system FIL – financial intermediation loan ICT – information and communication technology MOE – Ministry of Economy MOF – Ministry of Finance MSMEs – micro, small, and medium-sized enterprises NPLs – nonperforming loans PAM – project administration manual PBL – policy-based loan PFI – participating financial institution PMU GAF – project management unit of the German–Armenian Fund SDR – special drawing right SMEs – small and medium-sized enterprises SME DNC – Small and Medium Entrepreneurship Development National Center TA – technical assistance UCO – universal credit organization WESSDP – Women’s Entrepreneurship Support Sector Development Program NOTES (i) The fiscal year (FY) of the Government of Armenia and its agencies ends on 31 December. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2018 ends on 31 December 2018. (ii) In this report, “$” refers to United States dollars. Vice-President Wencai Zhang, Operations 1 Director General Werner E. Liepach, Central and West Asia Department (CWRD) Director Tariq H. Niazi, Public Management, Financial Sector, and Trade Division, CWRD Team leader Ruslan Kurmanbekov, Financial Sector Specialist, CWRD Team members Ketevan Chkeidze, Gender consultant Catherine Debalucos, Associate Project Analyst, CWRD Grigor Gyurjyan, Economic Officer, CWRD Maria Celeste Yabut, Senior Operations Assistant, CWRD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page BASIC DATA i I. PROJECT DESCRIPTION 1 II. DESIGN AND IMPLEMENTATION 2 A. Project Design and Formulation 2 B. Project Outputs 2 C. Project Costs and Financing 4 D. Disbursements 4 E. Project Schedule 5 F. Implementation Arrangements 5 G. Technical Assistance 6 H. Consultant Recruitment and Procurement 6 I. Gender Equity 6 J. Safeguards 7 K. Monitoring and Reporting 7 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness 9 C. Efficiency 10 D. Sustainability 10 E. Development Impact 11 F. Performance of the Borrower and the Executing Agency 11 G. Performance of the Asian Development Bank 12 H. Overall Assessment 12 IV. ISSUES, LESSONS, AND RECOMMENDATIONS 12 A. Issues and Lessons 12 B. Recommendations 13 APPENDIXES 1. Design and Monitoring Framework 14 2. Status of Compliance with Loan Covenants 16 3. Status of Compliance with Project Covenants 25 4. Chronology of Main Events 33 5. Project Cost at Appraisal and Actual 35 6. Technical Assistance Completion Report 36 7. Gender Equality Results and Achievements 39 8. Financial Intermedation Loan Implementation 53 9. Policy Matrix Status 63 BASIC DATA A. Loan Identification 1. Country Armenia 2. Loan numbers and financing source 2922 (COL) 2923 (COL) 3. Project title Women’s Entrepreneurship Support Sector Development Program 4. Borrower Armenia 5. Executing agency Ministry of Finance 6. Amount of loan 2922: SDR13.035 million ($20 million) 2923: SDR13.035 million ($20 million) 7. Project completion report number 1730 8. Financing modality Sector development program B. Loan Data 1. Appraisal – Date started 30 July 2012 – Date completed 13 August 2012 2. Loan negotiations – Date started 14 September 2012 – Date completed 20 September 2012 3. Date of Board approval 25 October 2012 4. Date of loan agreement 25 January 2013 5. Date of loan effectiveness – In loan agreement 25 April 2013 – Actual 19 December 2013 – Number of extensions 3 6. Project completion date Not applicable – Appraisal – Actual 7. Loan closing date – In loan agreement 2922 and 2923: 31 December 2017 – Actual 2922: 17 December 2015 2923: 31 December 2017 – Number of extensions 0 8. Financial closing date – Actual 2922: 17 December 2015 2923:14 March 2018 9. Terms of loan 2922 2923 – Interest rate 1.0% per annum 1.0% per annum during grace during grace ii period, 1.5% per period, 1.5% per annum thereafter annum thereafter – Maturity (number of years) 24 years 32 years – Grace period (number of years) 8 years 8 years 10. Terms of relending (PFI to Subborrower) – Interest rate Market based – Maturity (number of years) Up to 7 years – Grace period (number of years) – Second-step borrower 11. Disbursements a. Dates Policy Based Loan (2922) Initial Disbursement Final Disbursement Time Interval 19 December 2013 9 December 2015 24 months Effective Date Actual Closing Date Time Interval 19 December 2013 17 December 2015 24 months Financial Intermediation Loan (2923) Initial Disbursement Final Disbursement Time Interval 4 February 2014 15 May 2017 39.3 months Effective Date Actual Closing Date Time Interval 19 December 2013 31 December 2017 48 months b. Amount (SDR million) Increased Cancelled Last Original during during Revised Amount Undisbursed Allocation Implementation Implementation Allocation Disbursed Balancea Subloan (1) (2) (3) (4=1+2-3) (5) (6 = 4 – 5) Policy-based First tranche 6.517 0 0.000 6.517 6.517a 0 Second tranche 6.518 0 0.000 6.518 6.518a 0 Financial inter- mediation 13.035 0 0.926 12.109 12.109a 0 Total 26.070 0 0.926 25.144 25.144a 0 a Net of SDR34,582.55 was refunded to the Asian Development Bank by the Central Bank of Armenia. C. Implementation Data 1. Number of subloans 1,2461 2. Sector distribution of subloans Sector Projected Actual Trade Not applicable 441 Production Not applicable 37 1 Outstanding number of subloans as of 31 December 2017. iii Sector Projected Actual Agriculture Not applicable 606 Manufacturing Not applicable 27 Service Not applicable 81 Construction Not applicable 1 Other Not applicable 26 Total 1,246 3. Size of subloans ($ million) Range Number of Subloans Aggregate Amount Up to $2,100 465 0.574 (AMD1 million) >$2,100–$12,500 601 3.136 >$12,500–$70,000 166 4.328 Over $70,000 14 1.569 Total 1,246 9.606 4. Other breakdown of subloans (AMD million) Actual Female Subborrowers Projected Subborrowers Others Not applicable 33% (405) Women At least 50% 67% (841) Total 100% (1,246) Loan Purpose Projected Actual Amount Investment (asset acquisition) Not applicable 1,726 Working Capital Not applicable 1,624 Mixed Not applicable 983 Others Not applicable 166 Total 4,498 Loan Maturity (up to 7 years) Projected Actual Amount Up to 1 year Not applicable 280 >1–2 years Not applicable 464 >2–3 years Not applicable 1,002 >3–5 years Not applicable 2,103 >5 years Not applicable 649 Total 4,498 5. Subloans above free limit2 Subloan Aggregate Number Amount D. Project Data 1. Project cost (SDR million) Cost Appraisal Estimate Actual Foreign exchange cost 26.070 25.145 Local currency cost 0.000 0.000 Total 26.070 25.145 2 Not applicable as the Asian Development Bank agreed to remove free limits. iv 2. Financing plan (SDR million) Cost (Policy Based) Appraisal Estimate Actual Implementation cost Borrower financed 0.000 0.000 ADB financed 13.035 13.035 Other external financing 0.000 0.000 Total implementation cost 13.035 13.035 Cost (Financial Intermediation) Appraisal Estimate Actual Implementation cost Borrower financed 0.000 0.000 ADB financed 13.035 12.109 Other external financing 0.000 0.000 Total implementation cost 13.035 12.109 3. Cost breakdown by project component (SDR million) Component Appraisal Estimate Actual Policy-based First tranchea 6.517 6.517 Second trancheb 6.518 6.518 Financial intermediation 13.035 12.110 Total 26.070 25.145 a Disbursed on 19 December 2013. b Disbursed on 9 December 2015. 4. Project performance report ratings Implementation Period Single Project Rating 13–31 December 2013 On track 1 January–31 March 2014 On track 1 April–30 June 2014 Potential problem 1 July–30 September 2014 Potential problem 1 October–31 December 2014 Potential problem 1 January–31 March 2015 Potential problem 1 April–30 June 2015 Actual problem 1 July–30 September 2015 Potential problem 1 October–31 December 2015 Potential problem 1 January–31 March 2016 Potential problem 1 April–30 June 2016 Potential problem 1 July–30 September 2016 Potential problem 1 October–31 December 2016 On track 1 January–31 March 2017 Potential problem 1 April–30 June 2017 Potential problem 1 July–30 September 2017 Actual problem 1 October–31 December 2017 Potential problem v E. Data on Asian Development Bank Missions No. of No. of Person- Specialization Name of Mission Date Persons Days of Membersa Reconnaissance 4–8 July 2012 Fact finding 30 July 2012–13 August 2012 Inception mission 14–18 October 2013 7 35 a, b, d, f, i, j Special safeguard 1–5 April 2014 2 10 i, c Review mission 1 14–18 July 2014 3 15 a, b, f Country social safeguard review 28 July 2014 3 15 j, k Mid-term review 22–25 September 2015 5 20 a, b, c, d, e Review mission 2 24–27 January 2017 2 8 b, d Project completion 29 May–1 June 2018 3 12 d, g, h, a a = principal economist, b = private sector specialist, c = associate project officer, d = economics officer, e = director’s advisor, f = analyst, g = financial sector specialist, h = gender consultant, i = senior environment specialist, j = social development specialist, k = resettlement specialist.