SOUTH ASIA Pakistan Agriculture Global Practice Recipient Executed Activities Investment Project Financing FY 2014 Seq No: 4 ARCHIVED on 23-May-2018 ISR32538 Implementing Agencies: Indus Heritage Trust, Indus Heritage Trust Key Dates Key Project Dates Bank Approval Date:14-Feb-2014 Original Closing Date:21-May-2018 Project Development Objectives Effectiveness Date:21-May-2014 Revised Closing Date:21-May-2018 Project Development Objective (from Project Appraisal Document) The overall objective is to improve the livelihood opportunities for rural artisans. It will demonstrate to policy makers the effectiveness of a craftsbased cluster approach to poverty alleviation and to improve living conditions for weavers and embroiderers (especially women and girls) and their families in targeted communities in Punjab and Sindh. The project aims to assist an estimated 2,600 vulnerable artisan families/households, especially targeting women headed households, at the bottom of the pyramid to help them rebuild their lives, access sustainable livelihoods through establishing their own artisan institutions and consequently achieve arobust economic and social empowerment. With an average family size of 7 individuals in each household in the project areas, the project is expected to benefit an overall population of about 18,200 individuals. Out of the total number of beneficiaries, 70% of the beneficiaries are expected to be women. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Implementation Status and Key Decisions The project has demonstrated strong progress in activities across all components, and is well placed to achieve project development objectives. Organizing and institution building activities have continued at pace. The project has organized and registered 2700 artisans (104% of target) in 5/23/2018 Page 1 of 6
Punjab and Sindh province, with all beneficiaries being women (142% of target). These artisans have been organized into 103 Artisan groups and 17 Cluster Enterprises (113% of target). 2 CFCs have been established, one each in Punjab and Sindh (100% of target). Skill / design development: There has been substantial expansion of capacity building, skill development and design development activities to cover all registered artisans. A total of 154 sample development workshops have been conducted, which has resulted in the development of 4102 new, innovative product samples. In addition, IHT has facilitated 1429 home workshops to facilitate skill building and fulfillment of orders. A total of 116,639 products have been developed in these workshops. Supply chain: The project has undertaken several supply chain interventions to improve efficiency and realize the quality typically demanded by international markets. Some of these include (a) organizing additional trainings on order management and quality assurance for improving quality of the products, reducing errors, and meeting delivery deadlines (b) creation of whatsapp groups for Sindh and Punjab to improve coordination (c) Instituting measures and processes such as sharing pictures of every stage of production in the groups requiring relevant staff to respond immediately (d) MoU with M&P courier service for timely delivery of products (e) Agreements with thread vendors to quickly meet any shortage of material. Marketing and sales activities have significantly scaled up in the past year. IHT has been able to successfully leverage national and international linkages developed through participation in 11 high profile exhibitions, including 6 international exhibitions (such as NY-NOW). Cumulative sales figure on April 16, 2018 stood at Rs. 6,907,436 (US$ 60,000). 65% of this is in international markets, with partnerships with big brands such as Pottery Barn and Crate & Barrel. The total sales figure represents more than a five-fold increase over the sales figure of Rs. 1,323,761 (US$ 11,452) on June 30, 2017, indicating a positive growth trend in sales. Access to finance: The project has introduced several innovations and developed linkages to strengthen access to finance for artisans. For instance, the project has successfully digitized order payment through the digital payment application Mobicash to reduce delays and transaction costs associated with payments. The project has also trained artisans in mobile banking and linked them to artisan insurance products. In addition, the project is in the process of partnering with Pakistan Microfinance Investment Company (PMIC) to facilitate interest-free loans for artisans. Fiduciary arrangements: The project has developed effective financial management with robust chart of accounts facilitating in producing effective financial management reports at the component and product level. The budget vs. actual statement showed project progressed well during the previous quarter ended on March 31, 2018. Procurement planning and implementation functions are now better established. However, there is a need to further strengthen the evaluation aspects of procurement. The policy manuals are to be updated and in particular, the management of IHT has to develop and implement sales, inventory, endowment and property plant and equipment policy for sustainability of the project. The project has disbursed till 21st March 2018, 75.81% of the fund, rest will be utilized during the extension period i.e. till Dec 2018. Amount of USD 1.99 Million has been spent till March 2018 which is nearly 71% of the total project cost and the remaining has been planned over the course of six months till December 2018. Rs. 12.5 Million has been paid as per the Financial Statements 2017 to the artisans from the project. Way forward: The project team needs to prioritize sustainability to ensure business activities continue to grow beyond the project period. Towards this, the project team needs to finalize realistic business plans for CFCs, CBOs and IHT and put in place foundational elements to execute these plans. At the moment, majority of artisan institutions set up under the project are nascent, with the youngest institution being less than a month old. These institutions require handholding support, focused capacity building in business management and exposure to market and consumer trends. Other recommendations by the mission included further development / strengthening of linkages with financial institutions, extending digital finance initiatives such as Mobicash to all artisan groups, completion of institution building training and registration of artisan enterprises, strengthening marketing activities to increase depth (bigger orders) as well as width (more clients) of international orders. Request for Extension and Reallocation of Grant Proceeds within Categories: The project team has requested a no-cost extension of one year to consolidate key project gains and ensure organic and sustained growth of artisan institutions beyond project period. The purpose of the proposed extension is to (a) ensure long term sustainability of higher level artisan institutions (cluster enterprises) through capacity building of grassroots managers, proactive handholding support for at least a six-month period and (b) facilitation of strong market linkages during the autumn winter season in the current year to increase width and depth of client portfolio. It would also include reallocation of Grant proceeds of $178,569 and $17,782 from the Categories sub grants and "Goods" respectively to the Category Training and Workshops. This will be a no cost extension. The task team has conducted a detailed assessment of the request and concluded that the additional time frame will provide the opportunity for stronger artisan institutions and stronger market presence that will ultimately contribute to sustainability and organic growth beyond project period. In its assessment, the task team took into consideration (a) the strong progress in project activities over the past year despite various setbacks to implementation, (b) the vision and the robust business plans developed to build on project achievements (c) the interest in the artisan community inspired by project activities so far. The extension request has also been discussed with the CMU. Risks 5/23/2018 Page 2 of 6
Overall Risk Rating Risk Category Rating at Approval Previous Rating Current Rating Overall -- Moderate Moderate Results Project Development Objective Indicators Direct project beneficiaries (Number, Custom) Value 0.00 1,885.00 2,700.00 2,600.00 Female beneficiaries (Percentage, Custom Supplement) Value 0.00 1,885.00 2,700.00 1,820.00 20% percent increase in income of at least 50%of beneficiary artisan families. (Percentage, Custom) Value 0.00 0.00 47.00 20.00 80% percent of Cluster enterprises (of a total target of 15) that are marketing through their own brand (Percentage, Custom) 5/23/2018 Page 3 of 6
Value 0.00 12.00 80.00 80.00 25% percent increase in the number of days of employment of beneficiary artisan families (Percentage, Custom) Value 0.00 0.00 25.00 25.00 Overall Comments Intermediate Results Indicators A total of 15 new cluster enterprises to be established and operational (Number, Custom) Value 0.00 12.00 17.00 15.00 2 Common Facility Centers (CFC) established (Number, Custom) Value 0.00 0.00 2.00 2.00 5/23/2018 Page 4 of 6
At least 5 Commercial Banks or Private Sector Organizations develop and provide artisan specific insurance and financial products at a reasonable rate (Number, Custom) Value 0.00 1.00 4.00 5.00 At least 80% of established Artisan Clusters linked to mainstream buyers establishing a steady source of demand for the products developed (Percentage, Custom) Value 0.00 0.00 100.00 80.00 Date 30-Oct-2014 30-Oct-2014 20-Apr-2018 21-May-2018 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P145420 TF-17353 Effective USD 2.80 2.80 0.00 2.12 0.68 76% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145420 TF-17353 Effective 21-May-2014 21-May-2014 21-May-2014 21-May-2018 21-May-2018 Cumulative Disbursements 5/23/2018 Page 5 of 6
Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 5/23/2018 Page 6 of 6