Public Disclosure Authorized

INTEGRATED SAFEGUARDS DATASHEET

RESTRUCTURING STAGE

I. Basic Information
Date prepared/updated: 12/10/2012 Report No.: AC6840
1. Basic Project Data
Country: Madagascar Project ID: P109607
Project Name: ACGF - Madagascar Financial Services Project
Public Disclosure Authorized

Task Team Leader: Josiane V. Raveloarison

Estimated Appraisal Date: February 25, Estimated Board Date: June 5, 2008
2008
Managing Unit: AFTFE Lending Instrument: Specific Investment
Loan
Sector: Micro- and SME finance (75%);Central government administration (25%)
Theme: Micro, Small and Medium Enterprise support (29%);Rural markets
(29%);Regulation and competition policy (14%);Gender (14%);Debt management and
fiscal sustainability (14%)
SPF Amount (US$m): 0
GEF Amount (US$m.): 0
PCF Amount (US$m.): 0
Public Disclosure Authorized

Other financing amounts by source:

Borrower 0.00
Africa Catalytic Growth Fund (ACGF) 15.00
15.00
Environmental Category: F - Financial Intermediary Assessment
Simplified Processing Simple [] Repeater []
Is this project processed under OP 8.50 (Emergency Recovery)
Yes [ ] No [X]
or OP 8.00 (Rapid Response to Crises and Emergencies)

2. Project Objectives
The original project development objective (PDO) is to assist the Recipient in increasing
access to sustainable financial services, particularly by micro, small and medium
enterprises, and households in Madagascar through the improvement of competition and
Public Disclosure Authorized

diversification in the financial sector.

The proposed revised objective of the Project is to assist the Recipient in increasing
access to sustainable financial services, particularly to micro, small and medium
enterprises and households in Madagascar.

3. Project Description
The project will support activities that would play a catalytic role in achieving the
objective of increased access to financial services for firms and households in
Madagascar. The project support will, thus, be provided for the two original components
are restructured to focus on (i) access to MSME finance and (ii) Improving the capacity
of micro-finance institutions for greater outreach and sustainability. For these two
restructured components, the project will support technical assistance and equipment
which are provided under specific conditions and selected criteria.

Component 1: Increasing Access to MSME Finance (US$5.8 million).

This component will support activities aimed at scaling up the highly successful
IDA/IFC partial credit guarantee scheme piloted under the Madagascar Growth Poles
Project. Scaling up will involve partnering with a number of commercial banks to extend
credit to SMEs beyond the three growth poles areas. Activities to be financed include: (i)
Provision of guarantee fund, (ii) technical assistance and training to partner banks and
guarantee fund manager; (iii) audit of partner banks and guarantee fund manager, (iv)
legal assistance for drafting contracts, and (v) study of interest rates.

Component 2: Improving the capacity of MFIs for greater outreach and sustainability
(US$6.8 million).
This component will focus on scaling up the results and impact of the ongoing IDA
microfinance project aimed at helping MFIs achieve greater outreach and sustainability.
Support will be provided through the provision of goods, services and Matching Grants
for the following activities: (i) Strengthening supervision of MFIs (CSBF); (ii)
Reinforcing the MFIs and (iii) baseline studies, periodic survey, communication.

Component 3: Project Implementation, Monitoring & Evaluation (US$2.2 million).

This component will provide administrative support to a project coordinating unit for
project implementation and conducting monitoring and evaluation activities.

4. Project Location and salient physical characteristics relevant to the safeguard

analysis
The activities under the proposed financial services project will be across Madagascar.

5. Environmental and Social Safeguards Specialists

Mr Paul-Jean Feno (AFTN1)

6. Safeguard Policies Triggered Yes No

Environmental Assessment (OP/BP 4.01) X
Natural Habitats (OP/BP 4.04) X
Forests (OP/BP 4.36) X
Pest Management (OP 4.09) X
Physical Cultural Resources (OP/BP 4.11) X
Indigenous Peoples (OP/BP 4.10) X
Involuntary Resettlement (OP/BP 4.12) X
Safety of Dams (OP/BP 4.37) X
Projects on International Waterways (OP/BP 7.50) X
Projects in Disputed Areas (OP/BP 7.60) X
II. Key Safeguard Policy Issues and Their Management
A. Summary of Key Safeguard Issues
1. Describe any safeguard issues and impacts associated with the proposed project.
Identify and describe any potential large scale, significant and/or irreversible impacts:
The proposed project will not finance a specific set of pre-identified investments. A
guarantee will apply to a portfolio of loans extended by PFIs to MSME; the onlent funds
will be mobilized by the PFIs themselves. No specific sector has been identified and PFIs
will lend at market conditions. Partial coverage of the credit risks on loans to MSMEs,
could possibly pose environment, health and safety issues and hence OP 4.01
(Environmental Assessment) has been triggered.

2. Describe any potential indirect and/or long term impacts due to anticipated future
activities in the project area:
No potential indirect and/or long term environmental and social impacts are expected
with the potential subproject proposed by local banks for accessing to the partial
guarantee due to measures adopted by the project to mitigate and limit the impacts and
risks.

3. Describe any project alternatives (if relevant) considered to help avoid or minimize
adverse impacts.
N/A

4. Describe measures taken by the borrower to address safeguard policy issues. Provide
an assessment of borrower capacity to plan and implement the measures described.
The project has been re-classified as Category FI and the World Bank Operational Policy
on Environmental Assessment (OP 4.01) is triggered. As sub-projects/activities to be
financed under the credit of local banks for partial guarantee have not yet been identified
during the project preparation, an Environmental and Social Management Framework
(ESMF) has been prepared for the Project. The ESMF will set forth the principles and
guidelines to be followed by the borrowers to comply with the requirements of the
triggered policy. It includes a mechanism to review and conduct an environmental
screening to avoid and mitigate the environmental and social impacts risks of potential
subprojects eligible for financing by the participating financial institutions that have
access to the partial guarantee.

Two stages of environmental screening process have been adopted by the project to
avoid and minimize environmental and social issues.

The first level of screening will be addressed through an Exclusion List of Activities
(ELA). This is a list of sub-projects/activities that are ineligible for access by the local
banks to the project's partial guarantee The key steps and due diligence to identify ELA
and ineligible activities include the following: (i) a detailed review of range of activities
classified as Category A, according to World Bank OP 4.01; (ii) all activities/subprojects
that could trigger World Bank OP 4.12 on Involuntary Resettlement and OP 4.04 on
Natural Habitats; and (iii) activities that are prohibited for World Bank Group lending,
including IFC's exclusion list.
 The second level of screening are the activities or subprojects presented by PFIs that
could be eligible for access to the project's partial guarantee of the project fund. The key
steps and due diligence to identify eligible activities included the following: (i) activities
classified as Category B, according to World Bank OP 4.01, where the proposed
subproject/activity presented by the PFIs to be registered under the PPCG has received
an environmental license delivered by the Malagasy Environmental Authority (National
Office of Environment) and implemented in a manner satisfactory to the Environmental
and Social Management Plan (ESMP) that would be prepared for each subproject, and
monitored by the Malagasy Environmental Authority; (ii) activities classified as Category
C according toWorld Bank OP 4.01(i.e. negligible or no environmental and social
impacts).

The World Bank will assist and train the Project Coordination Unit and SOLIDIS, a
Malagasy guarantee firm licensed by the Central Bank of Madagascar, to build up their
capacity on the management of environmental and social risks described in the ESM. The
ESMF includes the screening of activities concerned by the request of partial guarantee
and their classification into ineligible or eligible activities. For the PFIs, completion of
this training will be a pre-condition to launch the activities on the provision of guarantee
fund.

5. Identify the key stakeholders and describe the mechanisms for consultation and
disclosure on safeguard policies, with an emphasis on potentially affected people.
The key stakeholders of the proposed project include the local banks, MFIs and the
recipients of micro-finance have been consulted during the project preparation and the
implementation period of original project. These consultations have been done in
different levels to preset the activities of proposed project. All provided comments have
been included to this proposed operation.

B. Disclosure Requirements Date

Environmental Assessment/Audit/Management Plan/Other:
Was the document disclosed prior to appraisal? Yes
Date of receipt by the Bank 12/10/2012
Date of "in-country" disclosure 12/10/2012
Date of submission to InfoShop 12/10/2012
For category A projects, date of distributing the Executive
Summary of the EA to the Executive Directors
Resettlement Action Plan/Framework/Policy Process:
Was the document disclosed prior to appraisal?
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
Indigenous Peoples Plan/Planning Framework:
Was the document disclosed prior to appraisal?
 Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
Pest Management Plan:
Was the document disclosed prior to appraisal?
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
* If the project triggers the Pest Management and/or Physical Cultural Resources,
the respective issues are to be addressed and disclosed as part of the Environmental
Assessment/Audit/or EMP.
If in-country disclosure of any of the above documents is not expected, please
explain why:

C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the
ISDS is finalized by the project decision meeting)

OP/BP/GP 4.01 - Environment Assessment

Does the project require a stand-alone EA (including EMP) report? Yes
If yes, then did the Regional Environment Unit or Sector Manager (SM) Yes
review and approve the EA report?
Are the cost and the accountabilities for the EMP incorporated in the Yes
credit/loan?
The World Bank Policy on Disclosure of Information
Have relevant safeguard policies documents been sent to the World Bank's Yes
Infoshop?
Have relevant documents been disclosed in-country in a public place in a Yes
form and language that are understandable and accessible to project-affected
groups and local NGOs?
All Safeguard Policies
Have satisfactory calendar, budget and clear institutional responsibilities Yes
been prepared for the implementation of measures related to safeguard
policies?
Have costs related to safeguard policy measures been included in the project Yes
cost?
Does the Monitoring and Evaluation system of the project include the Yes
monitoring of safeguard impacts and measures related to safeguard policies?
Have satisfactory implementation arrangements been agreed with the Yes
borrower and the same been adequately reflected in the project legal
documents?
 D. Approvals

Signed and submitted by: Name Date

Task Team Leader: Ms Josiane V. Raveloarison 12/07/2012
Environmental Specialist: Mr Paul-Jean Feno 12/07/2012
Social Development Specialist
Additional Environmental and/or
Social Development Specialist(s):

Approved by:
Regional Safeguards Coordinator: Ms Alexandra C. Bezeredi 12/10/2012
Comments:
Sector Manager: Ms Irina Astrakhan 12/07/2012
Comments: