Document of The World Bank Report No: ICR00003818 · NyK Naukari Ya Karobar (Enterprise or...
Transcript of Document of The World Bank Report No: ICR00003818 · NyK Naukari Ya Karobar (Enterprise or...
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Document of
The World Bank
Report No: ICR00003818
IMPLEMENTATION COMPLETION AND RESULTS REPORT
(IDA-45990)
ON A
CREDIT
IN THE AMOUNT OF SDR167.2 MILLION
(USD 250 MILLIONEQUIVALENT)
TO THE
ISLAMIC REPUBLIC OF PAKISTAN
FOR A
THIRD PAKISTAN POVERTY ALLEVIATION FUND (PPAF-III) PROJECT
June 20, 2017
Food and Agriculture Global Practice
Pakistan Country Management Unit
South Asia Region
This document has a restricted distribution and may be used by recipients only in the performance
of their official duties. Its contents may not otherwise be disclosed without World Bank
authorization
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CURRENCY EQUIVALENTS
(Exchange Rate Effective March 31, 2016)
Currency Unit = PKR
USD 1.00 = PKR104.75
XDR1.00 = USD1.408820
FISCAL YEAR
July 1 – June 30
ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy LSOs Local Support Organizations
CGAP Consultative Group to Assist the
Poor
MDTF Mid-Term Development Framework
CIG Common Interest Group M&E Monitoring and Evaluation
CLF Community Livelihood Fund MER Monitoring Evaluation and Research
CNIC Computerized National Identity
Card
MIS Management Information System
COs Community Organizations MIV Microfinance Investment Vehicle
CPI Community Physical Infrastructure MF-CIB Microfinance Credit Information Bureau
CRP Community Resource Person MFI Micro Finance Institution
DECRG Development Research Group NADRA National Database and Registration
Authority
DFID Department for International
Development
NyK Naukari Ya Karobar (Enterprise or
Employment) Centre
EIRR Economic Internal Rate of Return ODC Open Defecation Campaign
ESMF Environmental and Social
Management Framework
OSS Operational Self-Sustainability Ratio
F&A Finance and Accounts PDO Project Development Objective
GBV Gender Based Violence PMIC Pakistan Micro Investment Company
GDP Gross Domestic Product PMIFL Prime Minister’s Interest Free Loan
GIS Geographic Information System POs Partner Organizations
GoP Government of Pakistan PPAF Pakistan Poverty Alleviation Fund
GRM Grievance Redress Mechanism PSC Poverty Score Card
HR Human Resources QPR Quarterly Progress Report
IAD Internal Audit Department ROC Risk and Oversight Committee
ICRR Implementation Completion and
Results Report
SCAD Sindh Coastal Area Development
KfW Kreditanstalt für Wiederaufbau TTL Task Team Leader
KP Khyber Pakhtunkhwa UC Union Council
LEED Livelihoods Employment and
Enterprise Development
UCDP Union Council Development Plan
LSE Lahore School of Economics VOs Village Organizations
Senior Global Practice Director: Juergen Voegele
Practice Manager: Shobha Shetty
Project Team Leader: Imtiaz Alvi, Melissa Williams
ICR Team Leader: Pushina Kunda Ng’andwe
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PAKISTAN
Third Pakistan Poverty Alleviation Fund Project
Table of Contents A. Basic Information ....................................................................................................... ii B. Key Dates ................................................................................................................... ii C. Ratings Summary ....................................................................................................... ii D. Sector and Theme Codes .......................................................................................... iii E. Bank Staff .................................................................................................................. iii
F. Results Framework Analysis ..................................................................................... iv G. Ratings of Project Performance in ISRs ................................................................. xiii
H. Restructuring (if any) .............................................................................................. xiv I. Disbursement Profile ............................................................................................... xiv 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 5
3. Assessment of Outcomes .......................................................................................... 14 4. Assessment of Risk to Development Outcome ......................................................... 29
5. Assessment of Bank and Borrower Performance ..................................................... 31 6. Lessons Learned ....................................................................................................... 33 Annex 1. Project Costs and Financing .......................................................................... 37
Annex 2. Outputs by Component ................................................................................. 38
Annex 3. Economic and Financial Analysis ................................................................. 50 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 68 Annex 5. Beneficiary Survey Results ........................................................................... 70
Annex 6. Stakeholder Workshop Report and Results ................................................... 72 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 76
Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 85 Annex 9 - List of Supporting Documents ..................................................................... 86 MAP .............................................................................................................................. 87
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A. Basic Information
Country: Pakistan Project Name:
Third Pakistan Poverty
Alleviation Fund
Project
Project ID: P105075 L/C/TF Number(s): IDA-45990
ICR Date: 03/31/2017 ICR Type: Intensive Learning ICR
Lending Instrument: SIL Borrower: GOVERNMENT OF
PAKISTAN
Original Total
Commitment: XDR 167.20M Disbursed Amount: XDR 167.20M
Revised Amount: XDR 167.20M
Environmental Category: B
Implementing Agencies: Pakistan Poverty Alleviation Fund (PPAF)
Cofinanciers and Other External Partners:
B. Key Dates
Process Date Process Original Date Revised / Actual
Date(s)
Concept Review: 11/13/2008 Effectiveness: 07/09/2009
Appraisal: 04/20/2009 Restructuring(s):
05/28/2014
03/13/2015
09/30/2015
Approval: 06/04/2009 Mid-term Review: 07/02/2012 09/10/2012
Closing: 01/31/2015 03/31/2016
C. Ratings Summary
C.1 Performance Rating by ICR
Outcomes: Satisfactory
Risk to Development Outcome: Moderate
Bank Performance: Moderately Satisfactory
Borrower Performance: Moderately Satisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)
Bank Ratings Borrower Ratings
Quality at Entry: Satisfactory Government: Satisfactory
Quality of Supervision: Moderately Satisfactory Implementing
Agency/Agencies: Moderately Satisfactory
Overall Bank
Performance: Moderately Satisfactory
Overall Borrower
Performance: Moderately Satisfactory
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C.3 Quality at Entry and Implementation Performance Indicators
Implementation
Performance Indicators
QAG Assessments
(if any) Rating
Potential Problem
Project at any time
(Yes/No):
Yes Quality at Entry
(QEA): None
Problem Project at any
time (Yes/No): Yes
Quality of
Supervision (QSA): None
DO rating before
Closing/Inactive status: Satisfactory
D. Sector and Theme Codes
Original Actual
Sector Code (as % of total Bank financing)
Other Agriculture, Fishing and Forestry 10 10
Vocational training 10 10
Microfinance 36 36
Other social services 34 34
Other Industry, Trade and Services 10 10
Theme Code (as % of total Bank financing)
Income Support for Old Age, Disability & Survivorship 10 10
Micro, Small and Medium Enterprise support 30 30
Participation and civic engagement 19 19
Rural services and infrastructure 31 31
Social Safety Nets/Social Assistance & Social Care
Services 10 10
E. Bank Staff
Positions At ICR At Approval
Vice President: Annette Dixon Isabel M. Guererro
Country Director: Illangovan Patchamuthu Yusupha B. Crookes
Practice
Manager/Manager: Shobha Shetty Adolfo Brizzi
Project Team Leader: Imtiaz Alvi/Melissa Williams Kevin Crockford/Imtiaz Alvi
ICR Team Leader: Pushina Kunda Ng’andwe
ICR Primary Author: Pushina Kunda Ng’andwe
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F. Results Framework Analysis
Project Development Objective
Targeted poor are empowered with increased incomes, improved productive capacity and access
to services to achieve sustainable livelihoods.
Revised Project Development Objective
No changes in the project development objective
PDO Indicator(s)
Baseline Value Original Target
Values
(from approval
documents)
Formally
Revised
Target
Values
Actual Values
Achieved
at Completion or
Target Years
PDO
Indicator 1:
At least 60 percent of community institutions are viable1 and sustainable2
Value
(quantitative or
Qualitative)
50% 60% 67%
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: Based on a survey covering 446 community institutions
facilitated by 13 POs in 13 districts across 4 provinces, 67 percent of
community institutions were found to be viable and sustainable assessed by
the maturity index indicators developed for the project. Source: 1st and 2nd
Tier Institutional Assessment - External
PDO
Indicator 2:
At least 60 percent of community members report a minimum of 20 percent
increase in household
incomes and/or assets
Value
(quantitative or
Qualitative)
0 60 percent of
communities
report 20 percent
increase
61 percent of
communities
reported 22 percent
increase in average
household income;
19 percent increase
in average
household income
in treatment group
1 Maturity Index will be used to identify and assess viable community institutions 2 Sustainability defined as being active, financially viable and having a good governance structure. Active being (e.g. regular attendance at meetings), financially viable being (e.g. taking and repaying loans) and having a governance structure that ensures
independence, representation and operational sustainability - measures of these are detailed in PPAF’s Operations Manual
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compared to
control group
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Fully Achieved: Gallup Pakistan survey sampled 5000 borrowers (2500
treatment; 2500 control) in 33 out of 37 districts where microcredit activities
were implemented. The survey found that 61 percent of community
members reported an increase in average household income of 22 percent
and a 29 percent increase in average personal income. A separate impact
assessment carried out in the Sindh Coastal Area Development covering
2,250 households (1,816 treatment; 434 control) observed a 19 percent
increase in average household incomes for treatment groups compared to
control households. Source: Gallup Survey and SCAD Impact
Assessment - External
PDO
Indicator 3:
At least 33 percent of targeted community groups/institutions report
improved access to
Municipal/loca1 services.
Value
(quantitative or
Qualitative)
20% 33% 76%
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: Based on a survey covering 446 community institutions
facilitated by 13 POs in 13 districts across 4 provinces, 76 percent
community institutions reported to have improved access to municipal/local
services as linkages were developed at the UC level. Source: 1st and 2nd
Tier Institutional Assessment - External
Intermediate Outcome Indicator(s) – COMPONENT 1
Social Mobilisation and Institution Building
Baseline Value Original Target
Values
(from approval
documents)
Formally
Revised
Target
Values
Actual Values
Achieved
at Completion or
Target Years
IO Indicator 1: At least 60 percent of targeted poor3 and 60 percent of poorest households
are members of
community organizations
Value
(quantitative or
Qualitative)
45 percent of CO
member
households are
poor and poorest
60 percent of
targeted poor and
60 percent of
poorest HHs
68 percent of
targeted poor and
82 percent of
poorest HHs
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments Exceeded: Based on the Poverty Score Card (PSC) data collected from a
representative sample of 2,187 beneficiaries as part of the institutional
3 Poor and poorest households will be identified using appropriate tools such as the National or other objective measure.
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(incl. %
achievement)
assessment survey, it was found that 86 percent of the households earned
less than PKR10,000 per month (one third of the amount required to be
above the poverty line for a household of 7 members) and 68 percent of the
members were either in the lower bands of poverty or transitory vulnerable.
Source: 1st and 2nd Tier Institutional Assessment - External
Baseline Value Original Target
Values
(from approval
documents)
Formally
Revised
Target
Values
Actual Values
Achieved
at Completion or
Target Years
IO Indicator 2: At least 30 percent of all CO members are women
Value
(quantitative or
Qualitative)
40% 30% 64%
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: Out of about 1.3 million total membership of 1st Tier
organizational membership, 827,000 are women representing 64 percent of
total beneficiaries. Source: M&E data. .
Baseline Value Original Target
Values
(from approval
documents)
Formally
Revised
Target
Values
Actual Values
Achieved
at Completion or
Target Years
IO Indicator 3: At least 60 percent of COs clustered in Village level Organisations (VO)
and 25 percent of these clustered at Union Council level
Value
(quantitative or
Qualitative)
1 percent of COs
clustered into
LSOs/VOs and 0
percent clustered
at Union Level
60 percent of
COs clustered
into VOs and 25
percent of these
into UCs
69 percent of COs
clustered into VOs
and 80 percent of
these have been
clustered into UCs
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: 65,448 COs, 5,616 VOs and 380 LSOs had (UC level) were
formed representing 69 percent of COs clustered into VOs and 80 percent
aggregated to the UC level Source: M&E data
Baseline Value Original Target
Values
(from approval
documents)
Formally
Revised
Target
Values
Actual Values
Achieved
at Completion or
Target Years
IO Indicator 4: At least 55 percent of Community Institutions are performing satisfactorily
in terms of effectiveness, transparency and accountability
Value
(quantitative or
Qualitative)
50% 55% 57%
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: Based on a representative sample of 446 community institutions
surveyed across 13 districts and all four provinces, it was found that 57
percent of community institutions were performing satisfactorily based on
their ability to keep savings in verifiable accounts (bank account status);
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frequency of financial audits and maintenance of record of meeting
proceedings. Source: 1st and 2nd Tier Institutional Assessment –
External
Intermediate Outcome Indicator(s) – COMPONENT 2
Livelihood Enhancement and Enterprise Development
Baseline Value Original Target
Values
(from approval
documents)
Formally
Revised
Target
Values
Actual Values
Achieved
at Completion or
Target Years
IO Indicator 1: At least 70 percent of those who have received skills training and or
community livelihood fund (CLF); and/or assets – are using them
productively
Value
(quantitative or
Qualitative)
0 70% 97%
Date achieved May-6-2009 Sep-30-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: A total of 397,000 beneficiaries received skills/entrepreneurial
training and about 96,000 ultra-poor and vulnerable poor received
productive assets. 97 percent of skills training recipients reported using
their training productively while 94 percent of the productive assets
recipients were using them productively. Source: M&E data and
Beneficiary Survey: Internal and External
IO Indicator 2: At least 20 percent of federated organizations report effective linkages with
markets and private sector built
Value
(quantitative or
Qualitative)
0 20% 50%
Date achieved May-6-2009 Sep-30-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: About 4,200 Common Interest Groups (CIGs) out of 8,300
CIGs established linkages with markets and the private sector, representing
50 percent of federated organizations. Source: M&E data.
IO Indicator 3: At least 50 percent of the new livelihoods platforms formed have developed
productive linkages with markets, input/service provider, service/product
buyer, or technology provider – measured in terms of at least one
transaction/ contract
Value
(quantitative or
Qualitative)
0 50% 96%
Date achieved May-6-2009 Sep-30-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: 7 NyKs (96 percent) have signed 10 MoUs with local councils;
80 Digital Hubs (95 percent) were trained and linked to “Enclude”, a WB
funded project, for digital market research; and 40 Production Centres (97
percent) participated in Pakistan Arts and Craft Mela in Islamabad (sales of
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more than Rs.1,000,000) and linked to Mohenjoz, an online platform:
Source: M&E data
IO Indicator 4: Communities involved in Community Livelihood Fund (CLF) revolve
savings with at least 95 percent repayment rates
Value
(quantitative or
Qualitative)
0 95% 95 percent
repayment
rates
98 percent
repayment rates
Date achieved May-6-2009 Jan-31-2015 Sep-30-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: PKR323.99 million in form of CLF was provided to 120 loan
centres to benefit about 16,200 borrowers. Assessment indicates that 80
percent of loan centres increased their portfolio overtime and 20 percent
have retained the principle amount. Overall repayment rate of all 120 loan
centres was approximately 98 percent with an active portfolio of
PKR.269.41 million reported. Source: M&E data
IO Indicator 5: At least 60 percent of the targeted households where LEED
programming/investment has taken place have developed livelihoods
investment plans and mobilized resources for enhanced income and quality
of life
Value
(quantitative or
Qualitative)
0 0 60% 89%
Date achieved May-6-2009 Jan-31-2015 Sep-30-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: 296,000 livelihoods investment plans were develop ped,
representing 89 percent of targeted households that have developed
livelihood investment plans to mobilize resources for enhanced income and
quality of life. Source: M&E data.
IO Indicator 6: At least 50 percent of the livelihoods grant recipients are women
Value
(quantitative or
Qualitative)
0 0 50% 46%
Date achieved May-6-2009 Jan-31-2015 Sep-30-2015 Mar-31-2016
Comments
(incl. %
achievement)
Substantially Achieved: Out of 96,000 recipients of productive assets,
about 44,000 were women, representing 46 percent of total number of
recipients. Source: M&E data.
Intermediate Outcome Indicator(s) – COMPONENT 3
Micro-credit Access
Baseline Value Original
Target Values
(from
approval
documents)
Formally
Revised
Target
Values
Actual Values
Achieved
at Completion or
Target Years
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IO Indicator 1: The microcredit outreach increased to 8.80 percent from 6.0 percent
average in PPAF-III served districts areas4, with 230,000 new borrowers
Value
(quantitative or
Qualitative)
Total MF
penetration rate
from all sources
5 - 6 percent
Increase from
6% to 8.80%
penetration rate
14.75 percent
penetration rate;
379,284 new
borrowers
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016.
Comments
(incl. %
achievement)
Exceeded: Results achieved in the original 18 districts of Punjab and Sind
provinces.
No discernible increase in penetration rates in Baluchistan and Khyber
Pakhtunkhwa (KP) provinces – 19 districts. Source: M&E data
IO Indicator 2: A minimum annual growth rate of 20 percent in microcredit loans
maintained in one-fourth of PPAF-III served areas
Value
(quantitative or
Qualitative)
416,175 active
borrowers in
targeted 37
districts
20% Growth rate of 20
percent and above
was maintained in
11 of the original
37 districts
Date achieved December 2008 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: Of these 11 districts, 8 were in Punjab and 3 in Sindh provinces:
Source: M&E data
IO Indicator 3: Average repayments of micro-credit loans to POs at least 95 percent and
at least 98 percent from POs to PPAF
Value
(quantitative or
Qualitative)
Repayment rate
of borrowers to
POs was 95
percent
95% from
beneficiaries to
POs and 98%
from POs to
PPAF
Repayment rates
from borrowers to
POs was 97
percent and from
POs to PPAF 100
percent
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: PPAF-III designed to enhance MF sector commercial focus and
thus, PPAF-III loans were provided at KIBOR+ rates to POs, who
subsequently set market rates of interest for their borrowers. MF lending
at market rates with POs in target districts of Punjab and Sind had
exceptional growth with high repayment rates throughout the period of the
project. PPAF-III also established an internal ratings scheme for POs,
which helped determine their borrowing criteria and repayment schedules
Source: M&E data.
IO Indicator 4: At least 25 percent of all micro-credit loans received by women in PPAF-
III targeted districts
4 The micro-credit component of PPAF-III will be focused on the 37 poor districts that are least developed with microfinance penetration ratio of less than 5%
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Value
(quantitative or
Qualitative)
0 – 40 percent in
target districts
with an average
of 20 percent
25% of micro-
credit recipients
are women
Women received
72 percent of loans
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: A total of about 588,000 active borrowers had accessed
microcredit, out of which about 423,000 were women, representing 72
percent of borrowers that received loans : Source: M&E data.
IO Indicator 5: Institutional review of PPAF microfinance portfolio, management and
governance structure completed and agreed by mid-term of PPAF-III and
made operational by end of project
Value
(quantitative or
Qualitative)
Institutional
Reform Options
presented to
PPAF Board
Preparatory work
for PMIC nearly
completed. Board
formation was
underway and
PMIC was
expected to be
operational in
early FY17
Date achieved May-6-2009 Mar-31--2016
Comments
(incl. %
achievement)
Substantially Achieved: PPAF, Karandaaz (DFID) and KfW agreed to
jointly create PMIC and invest in the newly-formed Investment Finance
Company (Non-Banking Financial Institution) under SECP regulations –
PPAF: 49 percent, Karandaaz: 38 percent, KfW: 13 percent. The necessary
amendments to PPAF’s operations were approved by SECP, PPAF Board
of Directors and government in June 2016. PMIC incorporated as an IFC
in August, 2016; license to operate as an NBFC issued in August, 2016;
PMIC commenced business – 1 September 2016: Source: M&E data.
Intermediate Outcome Indicator(s) – COMPONENT 4
Basic Services and Infrastructure
Baseline
Value
Original
Target Values
(from
approval
documents)
Formally
Revised Target
Values
Actual Values
Achieved
at Completion or
Target Years
IO Indicator 1: At least 50 percent of COs are benefiting from improved infrastructure and
30 percent have accessed other sources of funding for infrastructure/loca1
services
Value
(quantitative or
Qualitative)
12 percent of
COs have
accessed
funding from
other sources
50 percent of
COs benefiting
from improved
and 30 percent
42 percent direct
beneficiaries and
24 percent
accessing other
services
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accessing other
services
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Substantially Achieved: A total of 6,225 water and infrastructure sub-
projects were initiated and 6,196 completed benefiting about 484,000
households. 42 percent of COs reported improved infrastructure and 24
percent have accessed other sources of funding for other services. Source:
M&E data.
IO Indicator 2: Minimum ERR of 20 percent and FRR of 25 percent of investment in
Water and infrastructure
Value
(quantitative or
Qualitative)
ERR of 26
percent and
FRR of 30
percent
ERR of 20
percent and
FRR of 25
percent
EIRR of 36.1
percent and FIRR
of 33.8 percent
Date achieved February
2009
Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: The economic and financial rate of return on water and
infrastructure sub-projects was found to be 36.1 percent and 33.8 percent
respectively. Source: Impact Assessment of Basic Services and
infrastructure - External
IO Indicator 3: At least 60 percent of the beneficiaries report satisfaction with the PPAF
supported health and education facilities
Value
(quantitative or
Qualitative)
70 percent
satisfaction
rate for
quality of
service
delivery
60% 93%
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: PPAF supported 896 schools that enrolled over 127,000 and
trained about 3,700 teachers and related staff. 504 health facilities were
supported and about 1,600 health workers were trained. The total number
of patients that accessed health services over the course of the project
totalled 12.6 million individuals. Based on the User Beneficiary Survey
(2014), 93 percent of the respondents reported satisfaction with PPAF
supported education facilities while 79 percent of the HHs reported an
improvement in the quality of their lives as a direct result of PPAF
supported health interventions.: Source: M&E data and User
Beneficiary Survey.
IO Indicator 4: Net enrolment growth rate of 7.5 percent per annum maintained over the
project period
Value
(quantitative or
Qualitative)
11 percent Net
retention rate
per annum
7.5% 7.5%
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
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Comments
(incl. %
achievement)
Fully Achieved: An enrolment growth rate of more than 7.5 percent per
annum was maintained over the project period. Further, total enrolment in
schools supported by the project was 63 percent for Government schools
and 28 percent for community schools: Source: M&E data - POs.
IO Indicator 5: At least 40 percent of beneficiaries of infrastructure, health and education
interventions are women
Value
(quantitative or
Qualitative)
Overall share
of women
beneficiaries
is 54 percent
40% 55%
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Exceeded: Of the combined 16,000,000 individuals that accessed both
infrastructure and health and education services, 8.9 million were women,
representing 55 percent of the beneficiaries of infrastructure, health and
education. Source: M&E data
Intermediate Outcome Indicator(s) – COMPONENT 5
Project Implementation Support
Baseline
Value
Original
Target
Values
(from
approval
documents)
Formally
Revised Target
Values
Actual Values
Achieved
at Completion or
Target Years
IO Indicator 1: Project management has satisfactorily addressed statutory audit findings
Value
(quantitative or
Qualitative)
Unqualified
external audit
report for FY
2008
Issues satisfactorily
addressed
Date achieved May-6-2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Achieved: Satisfactory financial management and audit findings in place:
Source: M&E data and project financial documents
IO Indicator 2: PPAF takes necessary actions related to findings of regular Monitoring,
Evaluation and
Learning reports
Value
(quantitative or
Qualitative)
- Actions taken on
M&E and learning
reports
Date achieved May-6- 2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Achieved: Key learnings and lessons learnt from various internal and
external assessments have been used to improve on specific areas such as
inclusion, poverty targeting and deepening and integration. Established
outcome monitoring system and joint monitoring visits were carried out
across four provinces.: Source: Key project documents
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IO Indicator 3: Complaints received by the grievance system have been addressed,
according to agreed
PPAF business standards
Value
(quantitative or
Qualitative)
Complaints
handled at PO
level with
remedial
measures and
reporting to
PPAF
Grievance
complaints are
addressed
Date achieved May-6- 2009 Jan-31-2015 Mar-31-2016
Comments
(incl. %
achievement)
Achieved: External complaints were handled and investigated under the
external grievance mechanism in place. PPAF has had a working internal
GRM since 2012 overseen by a full time GR Officer. Elections were held
in November 2015 to elect GRO and Grievance Committee. Source: PPAF
project documents and mission documents.
G. Ratings of Project Performance in ISRs
No. Date ISR
Archived DO IP
Actual
Disbursements
(USD millions)
1 11/30/2009 Satisfactory Satisfactory 20.77
2 05/28/2010 Satisfactory Satisfactory 36.30
3 12/08/2010 Satisfactory Satisfactory 44.30
4 05/30/2011 Satisfactory Satisfactory 67.30
5 12/12/2011 Moderately Satisfactory Satisfactory 75.25
6 06/11/2012 Moderately
Unsatisfactory Moderately Satisfactory 119.72
7 12/23/2012 Moderately Satisfactory Moderately Satisfactory 158.32
8 06/12/2013 Moderately Satisfactory Moderately Satisfactory 192.76
9 11/16/2013 Satisfactory Moderately Satisfactory 192.76
10 04/19/2014 Satisfactory Moderately Satisfactory 222.76
11 05/23/2014 Satisfactory Satisfactory 237.76
12 12/03/2014 Satisfactory Satisfactory 237.76
13 01/01/2015 Satisfactory Satisfactory 237.76
14 06/23/2015 Satisfactory Satisfactory 250.76
15 12/14/2015 Satisfactory Satisfactory 255.82
16 07/08/2016 Satisfactory Satisfactory 255.82
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H. Restructuring (if any)
Restructuring
Date(s)
Board
Approved
PDO Change
ISR Ratings at
Restructuring
Amount
Disbursed at
Restructuring
in USD
millions
Reason for Restructuring &
Key Changes Made DO IP
05/28/2014 S S Extension of closing date from
1/31/2015 to 9/30/2015
03/13/2015 S S 237.76
Revise intermediate outcome
indicators and outputs under the
livelihoods component.
09/30/2015 S S Extend closing date to March
31, 2016
I. Disbursement Profile
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1. Project Context, Development Objectives and Design
1.1 Context at Appraisal
1. In 2007, Pakistan’s GDP growth rate was 6.4 percent compared to a collective growth rate of 8.5 percent for the South Asia Region. The country’s key challenge was to sustain economic
growth in the midst of internal and externals shocks that had affected performance in recent past.
Rising food and fuel prices, energy crises including inflationary pressures had pushed the poor
below the poverty line, increasing vulnerability of ultra-poor to unparalleled levels. The rise in
ethnic and religious dissent alongside recurring natural calamities, restricted the country’s capacity
to effectively deal with persistent poverty.
2. Agriculture had long played a pivotal role in Pakistan’s growth and poverty reduction strategies, contributing 20 percent to GDP, 50 percent to exports and employing 44 percent of the
country’s labor force. However, its contribution to income changes was far less encouraging,
declining back to pre-2000 levels as the sector continued to face significant structural constraints
that directly impacted growth and poverty reduction.
3. Substantial improvements in the rural service delivery system were required to effectively support proper functioning and development of the rural non-farm sector to generate employment,
ensure income diversification and reduce poverty. This was a primary concern given that 40
percent of Pakistan’s poor were farmers and 45 percent of the rural poor relied on non-farm
activities as key sources of income. Moreover, the country’s microfinance sector was negatively
impacted by the 2008/09 financial crisis, which contracted capital availability, increased risk and
default and further reduced credit availability to both rural and urban areas.
4. Marginalized groups of poor and ultra-poor households such as disabled, landless peasants and religious minorities continued to be sidelined from participation, which limited effective
demand for public services, hampered efficiency in development programs, thereby limiting the
impact of rural development efforts. Significant gender disparities added to the level of complexity
as higher levels of poverty, landlessness, limited livelihood options and increasing rural-urban
migration by the male household members, placed heavier burdens on women-headed households,
who were more vulnerable to exploitation and food insecurity. Low levels of literacy awareness,
prevalence of high fertility, maternal and child mortality rates with poor access to health services
only served to further aggravate the situation.
5. The Pakistan Poverty Alleviation Fund (PPAF) was created in 1999 with funding and support from the World Bank. PPAF had successfully completed two phases of programing that
included three additional financings by working through the creation of strong outreach
mechanisms, building partnerships with Partner Organizations (POs) that in turn organized
Community Organizations (COs), Village Organizations (VOs) and Local Support Organizations
(LSOs). These institutions served as a platform for rural poor to access finances, skills,
infrastructure, health, education and participation in the development of their own communities
and interaction with government. Its delivery mechanism was recognized to be an effective
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approach5 to address an increased emphasis in Government’s poverty reduction programs that
aimed to enhance livelihood services designed to cater to the needs of sub-groups of the poor
through integrated approaches to infrastructure, social services and credit provision.
6. The Government of Pakistan and PPAF approached the Bank for financing a third operation to consolidate achievements made so far and to expand the program to poorest
households and districts of the country. Support was also requested to assist PPAF evolve fully
from a micro-credit focused organization (financed through the first two phases of PPAF) to a
multi-sectoral organization that could effectively address the many dimensions of chronic poverty
in the country. The proposed request directly supported Pillar III of the World Bank’s Country
Assistance Strategy (CAS) “Improved Lives and Protection of the Vulnerable” and was well
aligned with the Government’s own Poverty Reduction Strategy through: (i) strategic investments
in building social and human capital; (ii) innovative approaches to service delivery; (iii) integrated
community based approaches to development; and (iv) better identification of and responsive
program interventions for the ultra-poor. Policy measures were taken by the Government to place
poor households and communities at the center of development programs through inclusion of
social mobilization as the central pillar of the Government’s Mid-Term Development Framework
(MTDF) that covered the period 2005 – 2010.
1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)
7. The objective of the project was to empower the targeted poor with increased incomes, improved productive capacity and access to services to achieve sustainable livelihoods.
Key indicators were:
• Community institutions that are inclusive, viable6 and sustainable7
• An increase in household assets and/or income
• Improved access to municipal and local services
1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and
reasons/justification
8. The PDO remained unchanged, although revisions were made to intermediate indicators in the results framework to bring in a better focus on outcomes aligned with the PDO as described in
Section 1.7.
1.4 Main Beneficiaries,
9. Primary beneficiaries of the project were targeted ultra-poor, chronically poor and transitory poor households that were identified through the Poverty Score Card. PPAF III was
committed to prioritizing vulnerable segments of society in their operations, which included
women, youth, disabled and minorities. Beneficiaries – organized through a three tier structure of
5 Several studies, including third party evaluations and a study (March 2008) commissioned by the Ministry of Finance,
expressed a high degree of satisfaction over effectiveness of PPAF service delivery and recommended enhancement in provision
of additional resources. (PAD, Page 4) 6 A maturity index was to be used to identify and assess viable community institutions (Footnote in PAD, Page 6) 7 Sustainability was defined as being active, financially viable and having a good governance structure. Active being 9e.g. regular
attendance at meetings), financially viable being (e.g. taking and repaying loans) and having a governance structure that ensures
independence, representation and operational sustainability (Footnote in PAD, Page 6)
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COs, VOs and LSOs - were supported through capacity building, asset transfers, skills and
infrastructure development as well as access to finance, markets and local government services for
sustainable livelihood development.
10. Secondary beneficiaries of the project were Partner Organizations/Non-Governmental Organizations that facilitated project interventions. The organizations received support in
strengthening their organizational capacity to facilitate project interventions and training for social
mobilization, financial management, procurement and monitoring and evaluation.
1.5 Original Components (as approved)
The project consisted of five components.
11. Component 1: Social Mobilization and Institution Building (Orginal-USD38.5 million; Actual – USD33.95 million) - This component aimed to empower the poor by supporting their
organization into three tiers: i) COs and clustering at higher; ii) Village Organizations (VOs) and;
iii) Union Council area level that could build voice and scale for effective interface with local
government bodies, other development programs and markets. PPAF’s POs were to be entrusted
with intensifying their coverage within Union Council areas and strengthening new and existing
community institutions. It was expected that inclusive COs of the poor would be formed and their
clusters mobilized with capacity to manage their own development, access services through
improved linkages to local government, other development programs and markets for sustainable
service delivery.
12. Component 2: Livelihood enhancement and protection (Original - USD85.3 million; Actual – USD89.74 million) - The component aimed to develop capacity, opportunities, assets
and productivity of community members, mitigate their exposure to shocks, improve their
livelihoods initiatives and strengthen their business operations. Community members were to be
supported in building up their savings capacity and proficiency in fund management through
internal lending, complemented by grants and technical support to increase assets, productivity
and incomes. Mechanisms were to be developed and implemented that identified and supported
innovative micro-enterprises and value chain systems that led to improved livelihoods. The
component also facilitated and promoted linkages with private, public sector and not-for-profit
service providers.
13. Component 3: Micro-Credit access (Original - USD40.1 million; Actual – USD44.76 million) - The objective of the component was to improve availability and access of the poor to
micro-finance and enhance their capacities, productivity and returns from livelihoods initiatives.
Most areas were to benefit from improved access to existing micro-finance sourced from both
PPAF and other financial organizations. A significant proportion of the funds (82 percent) were
earmarked for micro-credit sub loans and the remaining 18 percent was to support PO operations,
capacity building and technical assistance through PPAF. PPAF was to support POs in facilitating
micro-credit provision to poor borrowers working in areas with minimal access to mainstream
micro-finance sector (areas where potential market penetration was less than 5 percent). Selected
POs were to be supported to improve their ability to work in least developed areas of the country
and provided with training and technical assistance to improve their existing systems in reviewing
and improving their loan and cost recovery mechanisms as well as funding flow with respect to
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PPAF. The component complemented livelihood finance provided in the form of grants for
productive assets and targeted credit worthy community members with viable livelihood
enterprises. Further, the component was expected to support PPAF’s re-organizational strategy to
de-link its micro-finance operations from its grant financing interventions thereby establishing an
autonomous micro-finance entity that would support the expansion of the micro-finance sector in
the country and provide financial services to “unbanked” and under-served communities.
14. Component 4: Basic Services and Infrastructure (Original – USD79.85 million; Actual USD81.11 million) – The component aimed to establish and upgrade basic services and
community infrastructure for the poor and improve health and education facilities. It built on work
initiated under PPAF I and II using a saturation approach to primarily cover villages where
previous investments were made. Support was given for basic infrastructure, additional productive
and integrated infrastructure projects and innovative interventions such as alternative energy
projects. The component also provided for continuation of the Sindh Coastal Area Development
(SCAD) Program8. The interventions were expected to result in increased access to provisions of
basic needs such as drinking water, irrigation, energy, access to transport, access to markets, health
and education facilities and local government institutions.
15. Component 5: Project Implementation Support (Original - USD6.25 million; Actual – USD6.25 million) – The component was expected to facilitate various governance,
implementation, coordination, monitoring and evaluation, learning and quality enhancement
efforts that would contribute to effective and transparent project management. Project components
were underpinned by two dimensions to ensure continuous process monitoring: 1) assessment of
community institutions and Union Council area organizations for their institutional growth,
integrity and ability to meet indicators set for maturity, governance, transparency and participation;
and 2) standard monitoring by PPAF to include an integrated Management Information System
(MIS).
1.6 Revised Components
16. The project components remained the same fundamentally, however, there were some changes in the activities that components 2 and 4 covered:
17. Component 2, Livelihoods Enhancement and Protection (LEP), was expanded somewhat and named as Livelihoods, Employment and Enterprise Development (LEED). A number of
innovations i.e. – Naukri ya Karobar (Employment or Enterprise) Centers, Youth Centers, Loan
Centers, Production Centers – and efforts were made to reformulate and modernize the training
program, develop market linkages, engage the private sector, and create synergies to ensure long
term sustainability of the project interventions.
8 SCAD Program used best practice and built on work already done under PPAF I and II, by adopting a deepening and saturation
approach and working primarily in villages where previous investments were made. Clustering of community organizations under
PPAF III was expected to support poor communities’ access and leverage external public and private sector financing for
infrastructure projects.
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5
18. Under Component 4, the Sindh Coastal Areas Development (SCAD) program activities were refined to promote holistic development through integrated multi-sectoral financing
agreements with each Partner Organization (PO) in SCAD to identify and implement each village’s
priority needs. Innovative livelihoods interventions, including skills trainings, were introduced
into the area in order to enhance economic growth and productivity of the beneficiary population.
1.7 Other significant changes
The project was restructured three times during implementation:
19. First restructuring. A Level 2 restructuring was carried out in May 2014 to extend the closing date by 8 months from January 31, 2015 to September 30, 2015.
20. Second Restructuring. A Level 2 restructuring was carried out in February 2015 to revise intermediate outcomes, intermediate outcome indicators and outputs under the livelihoods
enhancement and Protection Component and outputs under the SCAD program of PPAF III. The
findings from the Mid Term Review carried out in 2013 suggested that livelihood interventions
needed to evolve in response to emerging needs of target communities. For that reason, the
component was re-oriented towards increased community engagement to build productive
institutions and platforms that supported integrated planning and development. Employment
Centers, Digital Hubs and Production Centers were introduced along with improved training
programs to create the required scale to sustain livelihood interventions. Revisions to the SCAD
program introduced innovative livelihoods interventions as well as skills training to enhance target
communities’ growth and productivity. To better reflect the varied activities implemented,
subsequent revisions on intermediate indicators shifted focus from outputs to outcomes.
21. Third restructuring. A second Level 2 restructuring was processed in September 2015 to extend the closing date of the project from September 30, 2015 to March 31, 2016. This was to
facilitate utilization of additional funds realized through exchange rate gains and to enable the
project fully achieve its development objective.
2. Key Factors Affecting Implementation and Outcomes
2.1 Project Preparation, Design and Quality at Entry
22. The World Bank had developed a long term partnership with the Government of Pakistan to improve public goods delivery through its support of PPAF I and II. PPAF I and II were
implemented in 112 districts of the country with only a small proportions of selected Union
Councils, village or settlement in the districts covered. There was a clear justification anchored in
analytical underpinnings for the Bank’s continued support to the Government through PPAF III.
23. Lessons from earlier operations and regional experiences were incorporated. PPAF III benefited substantially from experiences derived from implementation of its predecessor
operations as well as interventions from various development partners and similar projects
implemented in the region. The ICR findings of PPAF II were primary inputs into PPAF III’s
design and approach. Some key lessons and findings that were instrumental in the new project’s
design choices were the following:
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24. Broadening approaches to livelihood finance for the poor that included grants and micro-credit to expand outreach. This was meant to address gaps in community financing for upstream
investments due to constraints in the original funding categories that limited direct investments to
micro-credit to individuals, grants to fund community infrastructure and capacity building to
support community organizations. The approach required strategic integration to enable
accumulation of assets that would improve creditworthiness of clients in difficult to reach areas.
Livelihoods grants and inter-lending were necessary to support the long term financial viability of
beneficiaries at all levels.
25. Social mobilization not only required continuous facilitation but also a multi-layered approach towards community empowerment. Clustering groups at higher levels – for voice and
scale – coupled with skills training alongside access to financial resources and wider markets,
would lead to meaningful income opportunities stimulated by increased new business investments.
It was also necessary to continuously engage with communities and POs around the inclusion and
active participation of women, minorities and persons with disabilities so as to ensure community
institutions were truly inclusive and opportunities were being accessed by the most marginalized
households.
26. Embedding flexibility in the design and approach would foster innovation and new tools to meet changing needs of the poor. PPAF’s unique position in Pakistan could be used to negotiate
the introduction of interventions on a national scale or to targeted beneficiaries.
27. Project design. For the most part, the project design was realistic in that it built on experiences gained through tested approaches in predecessor operations. Components were
consistent with the PDO and were complementary to enhancing a deeper level of impact envisaged
at conception. While indicators were measurable and attainable, a few were later revised to sharpen
focus on outcomes rather than outputs (see Section 1.7). Flexibility and innovation gave room to
incorporate health and education interventions, even though these could have benefitted from a
clearer consensus on operational strategies for implementation earlier on in the project. The
organizational reform strategy of de-linking PPAF’s micro-finance operations from its grant
activities as well as its country wide focus was a complex undertaking that was well handled during
the implementation period and led to the launch of a new independent microfinance company in
November 2016. The project design instilled greater commercial focus within the micro-credit
component of the project, and moved away from the approach of earlier phases of PPAF, which
provided general support to the microfinance industry in order to bring it to scale with subsidized
credit. Although not exclusively rural, PPAF-III concentrated additional effort on rural and remote
areas that were particularly under-served by micro-credit. POs borrowed from PPAF-III at market
rates and these levels of interest were passed onto customers. PPAF-III continued its semi-
supervisory role of the industry and introduced risk mitigation tools, client protection codes, and
good governance structures within micro-credit Partner Organizations in order to create a more
professional and sustainable industry. Microfinance providers would need to become more adept
at attracting their own funding from commercial markets.
28. The project approach and institutional arrangements were appropriate. The design focused on saturation of interventions in areas where PPAF was already operational and promoted
innovation and flexibility in scaling up successful approaches
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29. Risks and mitigation measures. A number of potential risks and mitigation measures were laid out in the Project Appraisal Document. A Governance Management Framework was also
developed and mainstreamed throughout the various operational processes and institutional
structure for decision making at all levels. With the exception of the security situation in Pakistan
- which proved to be a significant risk during the implementation period - all other risks relating
to the sector, technical design and project components were assessed as moderate. Risks associated
with PO capacity constraints, financial management and related sustainability issues were
adequately addressed through institutional and technical support and strengthening of the
Management Information System (MIS) that enabled PPAF to effectively monitor and address
problems in real time. Security risks that had potential to hamper accessibility to conflict affected
areas were properly identified with appropriate mitigation measures incorporated into the design,
including the use of POs that had strong local presence and incorporating third party validation as
an additional back up measure.
30. Adequacy of participatory process. The project preparation was conducted in a very consultative manner. The Bank team worked closely with the PPAF project team, POs and
Government of Pakistan counterparts to frame the scope, approach and operational aspects of the
project. There was a high degree of commitment and collaboration amongst stakeholders that
enabled the project to complete the necessary processing steps within the agreed time frame.
2.2 Implementation
31. Managing the shift towards an integrated system. Microfinance and community infrastructure were PPAF’s core strengths built from previous implementation experiences and so
activities related to these interventions carried through the third phase in a fairly seamless fashion.
At the same time, PPAF sought to introduce newer aspects of project implementation, particularly
approaches to livelihood enhancement and working with ultra-poor households, which, by their
nature, required more time to take root. The expansion to include livelihood activities, for example,
required shifts in the social mobilization approach to not only address processes and procedures of
including vulnerable groups but to also deal with reorganization of beneficiary groups around
private interests in contrast to public goods. Moving towards an integrated system - that aligned
micro-credit, infrastructure and livelihoods – was a necessary consolidation strategy envisioned at
conception and required that PPAF introduce a number of institutional changes and procedures in
order to address these new challenges. Its monitoring system, while providing an overall picture
of PPAF’s work, was initially unable to produce quarterly reports that showed project progress
against specific output and outcome indicators. Environmental monitoring and staffing were also
challenges early on in project implementation These challenges were taken up by new leadership
at PPAF in early 2011 which introduced changes to the institutional structure, systems and
procedures so as to break down organizational silos, encourage integration and improve synergy
and coordination among various PPAF units.
32. Mid-term assessment. At the time of the midterm review, the challenges of the monitoring system had been addressed and an environmental and social management unit established and
functional. To help ensure that new operating procedures that emerged from PPAF’s strategic
review were aligned with the Financing Agreement and project operational manuals, the Bank and
PPAF agreed to undertake a management performance assessment to ensure that the application
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8
of procedures and processes was in compliance with the agreed implementation arrangements of
the project.
33. Other items in the midterm evaluation looked at (i) PPAF’s future role once grant activities were separated from microcredit; ii) exploring the evolving roles within the three-tier institutional
structure with regard to inclusive participation of women and prevention of elite capture; iii)
addressing the challenges of the livelihoods component; and iv) PPAF’s long term strategy of
sustaining health and education interventions.
34. Streamlining operations for better implementation outcomes. Overtime, PPAF management prepared a business plan that outlined the organization’s strategy for both credit and
grant operations for the remaining project implementation period. Processes for PO
identification/selection process were further strengthened including the creation of two separate
committees for approval of grant and credit funding. Furthermore, PPAF strengthened its corporate
governance credentials by adopting the Corporate Governance Rules issued by the Securities and
Exchange Commission of Pakistan that required holding regular quarterly meetings of the Board
and its committees (Audit Committee and Risk Oversight Committee). It maintained compliance
with applicable provisions
35. As an organization, PPAF put considerable effort into ensuring best practice for its staffing. It carried out a staff rationalization exercise aimed at establishing a baseline for effective
deployment of available skills sets and staffing requirements over the remaining implementation
period. The organization embarked on simplification of its recruitment process aimed at improving
effectiveness and increased focus on staff development, training, appraisal, code of conduct,
diversity and benefits and compensation. An HR manual system was acquired to improve
operations and subsequently, HR manual and policies developed and approved by the Board.
36. The review and restructuring exercise, as well as the introduction of improvements for safeguards and M&E, created some lags in project implementation in their early stages, but two
project extensions provided additional time to fully disburse all funds and in most cases, exceed
project targets.
37. By December 2015, the Board of PPAF and the Economic Affairs Division of the Ministry of Finance approved the creation of the Pakistan Microfinance Investment Company (PMIC) – a
spin-off for-profit apex microfinance provider. Negotiations with DFID and KfW as anchor
investors, were finalized and the company was registered as an Investment Finance Company
under NBFCs regulations with the Securities and Exchange Commission of Pakistan. The official
launch occurred after project closure in November 2016 with initial funding from the private sector,
KfW and DFID.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization
38. Design: A monitoring and evaluation system was already in place, but was improved by the creation of a monitoring unit (Monitoring Evaluation and Research – MER) in 2011 that
undertook regular monitoring and tracking of project implementation separately from the
operational units. PPAF III further planned to improve on the design through the development of
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9
a Management Information System (MIS) that integrated existing unit specific databases to avoid
multiple entries and duplication of data9.
39. Implementation: In the earlier days of implementation, the MIS primarily provided quarterly reports reflecting a cumulative outlook of project interventions but without an overview
of progress against outputs and outcome indicators. Although operational units interacted with
POs regularly, the MIS did not have a fully integrated system of portfolio monitoring and to
address this challenge, MER was reorganized to enhance its ability to effectively monitor and
assess project progress. The unit took steps to enhance collaboration with other units for collecting
and reporting quality baseline information. Other innovations included improvements to QPR
reports emphasizing results and outcome oriented reporting and analysis. M&E systems were
further strengthened through the introduction of outside partnerships with the Lahore School of
Economics and the Centre for Economic Research in Pakistan (with Development Economics
Research Group (World Bank) already being a long-term partner of PPAF), among others, for
more robust assessments including randomized control trials. MER came under the umbrella of
the Quality Assurance and Compliance Unit, which provided guidance and oversight. Service
standards and procedures for data submission, validation and aggregation for final reporting were
streamlined in the process. Geographic Information System (GIS) was established plotting project
interventions in each project location and linked to the MIS.
40. By project end, QPRs were being generated through MIS and a number of independent assessments had been conducted based on the project’s M&E data. The project was able to report
on progress towards achieving the PDO with a credible system to validate reported outputs and
results. Data templates for all operational units had provisions for validation and data could be
drilled down to specific interventions, activity profiles, implementers, GPS coordinates for
activities as well as associated costs. At the time of the ICR, the interface for submission of PO
data was in the process of moving towards a web-based system.
41. Utilization: As PPAF improved its monitoring and evaluation system and processes, it also utilized the data collected to improve activities being carried out under the project and to better
achieve project objectives. For example, after the mid-term review, PPAF began tracking whether
various interventions were being implemented in an integrated approach as per project design. This
exercise led them to realize that the levels of integration were very low, with many interventions
being standalone infrastructure interventions without having mobilized communities. As a result,
PPAF began to consolidate resources and target those villages and UCs where more support was
needed instead of reaching out to newer UCs and villages. This consolidation of resources and
interventions maximized project impact in those areas as can be evidenced from achievements
against project outcomes in Sindh Coastal Areas – one area where this integrated approach was
implemented.
42. The MER Unit developed a Maturity Index to assess the viability and effectiveness of community organizations supported under the project. This Index helped them in categorizing
9 Almost all PPAF operation units maintained one or other type of database and would perform monitoring and analysis of their
respective operations independently which presented challenges in terms of analyzing overall project outcomes. Operational units
were in charge of tracking outputs and progress against implementation plans for POs.
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10
COs/CIGs based on their capacity and strength, which in turn improved targeting of interventions.
For example, Category ‘A’ COs/CIGs were consolidated where possible into Production Centers
under the Livelihoods component, and more training and capacity building support was directed
towards Category B COs/CIGs. The Maturity Index also helped PPAF better report on key PDO
indicators.
43. Improved monitoring processes also helped PPAF assess the sustainability of their interventions. For example, PPAF implemented over 6000 infrastructure schemes over the course
of this project. PPAF developed a detailed reporting format with which to check which of the
schemes were functional after completion. The reports that were generated using that data
demonstrated that most of the sampled schemes under PPAF 3 were fully functional 2-3 years
post-completion. The data also helped identify key issues which had led to some of the schemes
to malfunction or be abandoned – one of which was weak social mobilization prior to scheme
construction. Subsequently, PPAF used this information to strengthen mobilization processes
where they had been weak.
44. Project Evaluations: To its credit, PPAF expanded its research repertoire to strengthen links with its operational activities for quality outcomes. A series of independent assessments,
technical research, beneficiary surveys and evaluations were commissioned during the project
period. Project baseline data was based on achievement of indicators captured at the end of the
predecessor project through an impact evaluation and were reflected in the PAD at the time of
preparation of PPAF III. The evaluations, surveys and assessments were used along with M&E
data to evaluate project performance. Some of the key evaluations used in the assessment of
outcomes were carried out in 2013 and 2014 when substantial portions of the loan were already
disbursed (close to 85 percent in 2013 and more than 90 percent by mid-May 2014). Studies were
commissioned at the time to assess the impact of the project.
45. Communication and Media: A strong media and communications team delivered various prints and electronic products. Knowledge management moved from dissemination of information
to empowerment through information. Immersions programs for journalists to visit project sites
and audience specific communication products were developed.
46. PPAF’s communications team worked to develop media manuals for POs that provided guidance on dealing with local/vernacular media and gave practical instructions for developing
press releases. The community Open Defecation Campaign (ODC) benefitted from the
communication team’s support to develop message content and delivery. Collaborations increased
with operational units which contributed to high quality materials being used at the community
level. Database of website and social media accounts of POs were developed as well as for some
LSOs. A social media strategy was developed and implemented.
2.4 Safeguard and Fiduciary Compliance
47. Environment: Project was classified as a category B in accordance with Bank policy as interventions related to community physical infrastructure and service delivery projects were
assessed to have some potential negative impacts. An environmental management framework was
therefore developed. An environmental and Social Management group was constituted although
there were recruitment challenges in filling a number of positions making implementation of
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related environmental activities slower than expected at the start of PPAF III project
implementation. This included some delay in monitoring and reporting of POs compliance levels
as well as issuance of quarterly environmental reports. Improvements in recruitment led to a fully
functioning ESM unit that was able to provide capacity building to POs to implement the
framework. Environmental and social audits of POs were undertaken and quarterly progress
reports prepared. The first third party validation was conducted in 2012 and revisions made to the
framework to incorporate livelihoods, health, education and microfinance schemes. ESMF was
integrated into all PPAF programs and operational units began reporting on field compliance. POs
were regularly reporting on compliance and information fully reflected in quarterly reports.
Indigenous People’s Planning Framework was prepared as project activities were expanded to
areas with pockets of indigenous groups. Community resource persons were trained in ESMF that
promoted greater environmental and social awareness at the community level. Disaster screening
was also eventually incorporated and a Disaster Strategy prepared.
48. Social: A social assessment was planned early in the project period to focus on issues around poverty, access of project participants to facilities and services, particularly vulnerable
groups and ultra-poor. There were initial delays in finalizing the assessment due to security
constraints in undertaking field visits to some conflict affected areas. Once completed, this initial
assessment revealed that out of 77 percent representation of village households in the community
organizations, 60 percent were male and only 12 percent were female. It was clear that concerted
effort was required to increase women participation in the project.
49. PPAF used this data to adopt an integrated approach for addressing gender issues in implementation of various components as well as internally in planning and decision making
processes. Gender focal points were assigned in all operational units and worked in close
collaboration with a Gender Committee that had been established during the 2011-12 re-
organization. Steps were taken to compile gender profiles for POs to assess the level of institutional
and program integration and identify areas where technical support could be provided. A gender
action plan was created and the first gender orientation training delivered to mainstream activities
at the institutional level. The Gender Committee began to collaborate with operational units and
forged partnerships with Government agencies in Punjab (Women Development and Literacy
Department). PPAF initiated 16 days of activism against gender based violence (GBV) at the PO
and LSO levels. 108 field staff and 55 POs participated in the events. Community resource persons
were also trained on gender aspects which helped to enhance sensitivity towards gender related
issues within communities.
50. Grievance Redress Mechanism (GRM): A grievance redress mechanism was already in place, although not systematized. The project worked towards streamlining the process, paying
special attention to roles and responsibilities. It was recognized that PPAF’s work in conflict
affected areas would require a greater focus on GRM to ensure accessibility and inclusivity of all
groups. There were initial delays in formalizing the system due to security constraints in
undertaking field visits to some conflict affected areas. Despite these difficulties, a three-tier
structure was introduced that involved the use of an external third party to conduct validation of
social aspects. An employee grievance redress mechanism was also put in place to enhance
transparency and trust amongst staff. By project end, a GRM policy was in place and incorporated
in the organization’s HR manual
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51. Financial Management: The project had a very strong financial system in place. All financial reporting requirements were fulfilled and both Finance and Accounts (F&A), and Internal
Audit Department (IAD) were adequately staffed. The Board’s Audit Committee met regularly
and IAD successfully implemented its work plan. There was a functional PO monitoring system
in place as was a financial management information system. Acceptable audited financial
statements were received well before due dates. The reorganization led to revisions in the operating
procedures of both units. IAD became part of the process for clearing disbursements to POs to
provide an opportunity to highlight ongoing and/or unresolved concerns arising from internal
reviews. A comprehensive financial management checklist was in place to assess the capacity of
POs and differentiated by size of the entity for customized support. A web-based application was
developed for tracking statement of expenses and performance standards fixed for processing.
However, the restructuring and introduction of the new manuals and procedures impacted the
implementation of the project and slowed down disbursement significantly between 2011 and 2012.
This led the Bank to commission a third party management performance review (MPR) to carefully
examine and analyze the extent to which the laid out criteria, steps, standards and procedures of
the Bank’s operational manuals were applied by PPAF between 2010 and 2012. The review found
several gaps, weaknesses and violations in the operational manuals related to financial controls
and organizational management, and recommendations were made for improvement. PPAF
resisted any changes in response to the findings of the review and at the time of the ICR, the
implementing agency had not recognized the recommendations of the report.
52. Both F&A and IAD were actively engaged in capacity building of POs as well as COs. Training workshops were held and basic financial manual templates prepared to facilitate small
POs. Standard formats for record keeping were also developed to guide COs. Reserves in the form
of endowment was established for grant based interventions. Innovative approaches were taken to
facilitate illiterate community organizations through the development and roll out of pictorial
formatted financial templates. The Auditor General of Pakistan carried out a performance review
of PPAF and issued a clean report with procedures found to be in compliance with financial
standards. In cases where audit observations were made, shortcomings were quickly addressed
including through a reduction in POs and agreed timelines for addressing issues raised. A stringent
monitoring mechanism with clear responsibilities was effected and legal action taken in some cases.
PPAF also adopted Corporate Governance Rules and approved a treasury management policy on
use of surplus funds. Audit committee and Risk Oversight Committee (ROC) of the Board were
in place and meetings held as planned.
53. In spite of the difficulties, the task team continued to work closely with PPAF staff and its POs, with good physical, financial progress and results on the ground. At project closure, the Bank
identified three (3) ineligible payments to POs. The Bank noted that the determination of
ineligibility was not reflective of PPAF’s performance or results of identified POs, rather, the
criteria for selection was not in line with the categories for re-imbursement. Overall financial
management was deemed satisfactory
54. Procurement: PPAF had adequate staff with experience in implementing procurement under World Bank guidelines. Procurement portfolio was implemented mainly through POs using
primarily the national shopping method to contract out goods, works and non-consulting services.
The level of technical proficiency of staff assigned to procurement areas at HQ and POs was
sufficient. Ex-post review of contracts was implemented and regular systematic post review
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exercises were carried on PO procurement plans based on bank standards. PPAF constantly
worked towards streamlining and strengthening procurement system and procedures in line with
Bank guidelines.
55. There were growing concerns about PPAF’s procurement practices, particularly related to hiring of consultants, weak monitoring and quality of procurement systems and staff. An
independent procurement review (IPR) was commissioned in which some substantive
discrepancies were noted in the procurement process and a few deviations from the Bank’s
procurement guidelines. The review underscored the need for enhanced PPAF monitoring of
PO/CO procurement activities. The Bank had also recommended that the reporting line for the
procurement unit be changed to the appropriate authority. There were revisions made to the
reporting lines of the procurement unit, which were switched to a competent authority to strengthen
checks and balances in the system. A number of critical actions were recommended and addressed
by PPAF. The organization promoted a fair, transparent, traceable and inclusive procurement
system that centered on beneficiary participation in the identification of needs and good
governance principles in the selection of management. The Procurement Unit worked with the
Livelihood unit to jointly prepare guidelines for community driven procurement and a procurement
complaints management system was established. The role of the procurement unit was further
enhanced in the selection process of POs and a placement program established for staff.
Procurement rating was deemed satisfactory at the end of the project.
2.5 Post-completion Operation/Next Phase
56. In terms of long term sustainability, PPAF has PKR.13 billion reserves and a PKR.1 billion endowment. Its annual income from its reserves and endowment fund is approximately PKR.2.5
billion, while expenses against income are around PKR.600 – 700 million, leaving it with an annual
operating surplus of approximately PKR. 1.5 – 2 billion. Clearly, it is a financially sustainable
entity and has evolved into a viable organization through interests earned from its micro-credit
operations, endowments invested in long term government securities as well as new sources of
financing from donors and the private sector.
57. Since the project closed in March 2016, PPAF has continued to implement the program for poverty reduction and two projects by KfW as well as a EUR 40 million trust fund supported by
the Italian Government. The World Bank has also remained engaged with PPAF through
management of the Italian support to PPAF through an innovative fee for service agreement. A
MoU was recently signed with FAO to continue technical support on livelihood activities and
discussions are ongoing with KfW for a follow on project and with DFID for a livelihood operation.
PPAF’s strategic focus over the medium term is: (i) improving protection of its social capital (COs)
while instilling mechanisms for peace and conflict resolution, strengthening resilience for climate
change adaptation and reinforcing linkages with local governments for improved coordination and
public service delivery; (ii) leveraging technology platforms for better monitoring and service
delivery; (iii) creating employment and self-employment opportunities for youth; and (iv)
developing and scaling up the eco-system for renewable energy.
58. As PPAF continues its support to community organizations for both public and private goods delivery, linkages with both local/provincial governments and engagement with the private
sector will be critical for long term sustainability of investments made. Existing linkages with local
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authorities through LSOs are the first stepping stone for higher level engagement with provincial
governments and efforts have continued in ongoing handover of health and education services to
the government. Currently the Bank is supporting the Governments of KP, FATA and Balochistan
in providing community support, which is important to building state-citizen trust. There is scope
for PPAF to coordinate and /or integrate their activities with these programs as well as in the
provinces of Sindh and Punjab.
59. A key transition for the microfinance industry in Pakistan emanating from PPAF-III is the creation of a new peak organization, the Pakistan Micro Investment Company (PMIC), through
the separation of the Financial Services Group (the microfinance component) of PPAF. To grow
and expand outreach microfinance providers will need to diversify their sources of funds to meet
their increasing financing requirements in the future. Stakeholders considered that PMIC would
be better placed to attract financing from diverse sources and meet the increased borrowing needs
of MFPs as the industry continues to grow and mature. The Pakistan Microfinance Network
estimated that more than PKR 40 billion of additional debt for on-lending will be routed through
PMIC by 2020, but over PKR 65 billion will still have to be tapped from additional sources like
the capital and money markets and from international lenders.
60. PMIC was created as a unique model; the first-ever national level Microfinance Investment Vehicle (MIV) in the world and the first-ever MIV in Pakistan. Additionally, PMIC will provide
a wide range of financial services to all MFPs, to promote financial inclusion in order to alleviate
poverty and contribute to broad based development. PPAF is a shareholder of PMIC which will
enable it to pursue its mission to support MFIs reach out to the poor in rural areas.
3. Assessment of Outcomes
3.1 Relevance of Objectives, Design and Implementation
61. Relevance of Objectives: The relevance of the project’s objective was rated high. The project aimed to tackle deep rooted poverty in the country’s most vulnerable areas by addressing
constraints related to access to basic services, markets, health and education, exclusion, violence,
unemployment and livelihood risks and vulnerabilities. The project was fully aligned with key
Government policies as outlined by the national poverty reduction strategy in Pakistan (Vision
2025), the Medium-Term Development Framework (2005-2010), Poverty Reduction Strategy
Paper II (2008-2012) and the New Growth Framework (2010). The Governm