Benin - Second Rural Savings and Loan Cooperative Rehabilitation Project

DovAum.n of The World Bank FOR OMCLAL USE ONLY Repwt No. P-5889-nEN MEKORARDU AND UECOMMEATION OF THE PRESIDENT OF THE T1RNATIONAL DEVEOPF ASSOIATION TO THE EXCUTIv DIRECTORS ON A PROPOSED CREDIT OF SDR 2.8 MIION TO THlE REPUBLIC OF MIO FOR A SECOND RURAL SAVINGS AID LOAN COOPERATIVE REH&BILITtION PRO)JET JUNE 1, 1993 MICROFICHE CoPY Report No.:P- 5889 BEN Type: (pM) Title: SECOND RURAL SAVINGS AND LOAN I Author: BRIZZI, A Ext.:34624 Room:J8167 Dept.:AF1AG This docament has a r stricted distrih,on and may be used by recipients only in the perfonnance of their official dutes Its contents may not otherwise be disclosed without World Bank authorization.  -tiRRENCY EQUIVALENTS Currency Unit CFA Franc (CFAF) US$1 CFAF 250 SYSTEM OF WEIGHTS AND MEASURES Metric Sy4.em ABBREVIATIONS AND ACRONYMS 8CEAO Banque Centrale des Etats d'Afrique de l'Ouest (Central Bank of West African States) CFD Caisse Franqaise de Developpement (French Development Agency, ex CCCE) CCCE Caisse Centrale de Cooperation Economique CLCAM Caisse Lorzale de Credit Agricole Mutuel (Local Savings and Loan Cooperative) CNCA Caisse Nationale de Credit Agricole (National Agricultural Credit Bank) CPU Central Project Unit CRCAM Caisse Regionale de Credit Agricole Mutuel (Regional Savings and Loan Cooperative) EEC European Economic Community FAC Fonds d'Aide et de Cooperation (French Assistance and Cooperation Agency) IDA International Development Association IFAD Ins.amational Fund for Agricultural Development SDC Swiss Development Cooperation UMOA Union Monetaire des Etats d'Afrique de l'Ouest (Monetary Union of West African States) URCLCAM Union Regionale des Caisses Locales de Credit Agricole Mutuel (Regional Union of CLCAMs) FISCAL YEARS Government: January 1 - December 31 Project Entities: October 1 - September 30  FOR OFFICIAL USE ONLY REPUBLIC OF BENIN SECOND RURAL SAVINGS AND LOAN COOPERATIVE REHABILITATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Benin Amount: SDR 2.8 million (US$ 3.8 million equivalent) Terms: Standard IDA, with 40 years maturity Beneficiaries: The (mutualist) Network of Rural Savings and Loan Cooperatives Relendino Terms: Grant Financina Plan: US$ Million eauivalent CLCAMs 5.1 IDA 3.8 CFD 2.8 SDC 1.9 FAC 0.9 IFAD 0.4 EEC 0 15.1 = = Economic Rate of Return: Not applicable Staff ApDraisal Report: Report No. 11619 - BEN MaD: IBRD No. 23966 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 authorizatiot.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECT'JRS ON A PROPOSED CREDIT TO THE REPUBLIC OF BENIN FOR A SECOND RURAL SAVINGS AND LOAIN COOPERATIVE REHABILITATION PROJECI 1. I submit for your approval the following memorandum and recommendation on a proposed development credit to the Republic of Bsnin for SDR 2.8 million (US$3.8 million equivalent), on standard IDA terms with a maturity of 40 years to help finance a second project for the rehabilitation of the country's rural savings and loan cooperatives. The project was prepared In close collaboration with the French Development Agency (Caisse Frangaise de D6veloppement - CFD, ex Caisse Centrale de Cooperation Economique) and t..e Swiss Development Cooperation (SDC) who will respectively provide, the equivalent of US$ 2.8 million and US$ 1.9 million towards the project. Other co-financiers - the French Aid Agency (FAC), the International Fund for Agricultural Development (IFAD) and the European Economic Community (EEC) - will provide an additional US$ 1.5 equivalent (all on a grant basis, except for IFAD). 2. Sector and Proiect Background. Within the framework of its Structural Adjustment Program, aupported by IDA, the Govemment of Benin initiated in 1 97 a fundamental restructuring of the country's financial sector. Three government-owned commercial banks and the Agricultural Development Bank (CNCA) were liquidated, and reforms were introduced in the sector's legal and regulatory framework. The restructuring program has been successful. By early 1993, five new private commercial banks (including one ot intemational standing) had been established and the return of populations' confidence in the banking sector Is attested by the substantial amount of deposits the banks have already mobilized (increasing from CFAF 7.8 billion at the end of 1989 to CFAF 70.5 billion at the end of 1991). These achievements are being consolidated by iurther reforms focussing on: (a) the recovery of the liquidated banks' assets and the strengthening of judicial procedures for the protection of creditors; (b) the restructuring of the postal savings system; and (c) the regularization of the relationship between the Central Bank and the Govemment. 3. However, the country's present inancial system does not address the savings and financing needs of the Beninese economy in a fully satisfactory fashion. The new banks have so far chosen to invest most of their resources in the monetary market, devoting only a small proportion of the mobilized savings to (short-term) credit in favor of the domestic economy. Although this practice is expected to change over time with the growth of countrys economy, political stability and the emergence of a viable formal private sector, the prospects for the banking sector to provide the necessary intermediation services to the domestic economy appear quite limited in the medium-term. This is particularly true for the rural areas. None of the new banks are operating outside of Cotonou and the only formal financial intermediaries active in rural areas are the rural savings and loan cooperatives. 4. The Rural Savings and Loan Cooperative Network is composed of 50 primary level Caisses Locales de Credit Agricole Mutuel (CLCAMs) and six regional level Caisses R6gionales de Credit Agricole Mutuel (CRCAMs) to which CLCAMs are affiliated. The mutualist Network was created in the late 1 970s under the initiative and control of the govemment-owned CNCA. The strong linkage with CNCA was in fact the root cause of much of the Network's subsequent troubles. CLCAMs/CRCAMs were asked by CNCA to undertake commercital banking operations, subjected to interest rate ceilings applicable to commercial banks and stripped of any real control over their lending operations. Because of lax supeivision and political interference, the Network's recovery performance and financial situation gradually deteriorated to unsustainable levels. In 1987, the Govemment contemplated liquidating the cooperative network along with CNCA. However, in view of its importance for the rural populations and economy, and after extensive discussions between the Govemment and several donor ageneies (including IDA and CCCE), it was decided instead to rehabilitate the Network.  5. First Rural Savinos and Loan Cooperative Rehabilitation Prolect. The First Rural Savings and Loan Cooperative Rehabilitation Project was identified in late 1988, appraised in June 1989 and approved by the Board in January 1990. External financing for the project was shared by CCCE (US$ 3.7 million equivalent), IDA (SDR 2.0 million, Credit 2086-BEN) as well as FAC, EEC, the Swiss Development Cooperation and the Govemment of Germany who collectively provided a total of US$ 3.4 million equivalent. Project funds have been passed by the Government on to the Network as grant and used for the financial rehabilitation of CLCAMs/CRCAMs, including the reconstitution of deposits lost through CNCA's liquidation and the financing of their operating deficits while they were expanding their resource base, technical assistance and training. It is expected that all external funds, including IDA, will be fully disbursed by the end of December 1993. 6. Overall project performance hbs been remarkably good. A Central Project Unit (CPU) was set up under the project for setting and c:ontrolling the Network's key operational policies and procedures. A semi-formal TCollege des Presidents", composed of elected CLCAMs' representatives, was also established to ensure participation of the Network's members in policy-making and in monioring of its activities. The CPU, headed by two expatriate managers (Director and Deputy/Financial Director) has provided strong and competent leadership to achieve the project's main underlying objectives of (a) strengthening the Network's management and financial situation; and (b) restoring population's confidence in the Network. Critical elements in the success of the project have been (a) the genuine vesire of Network's members to re-assert control over the management and operations of CLCAMs, and (b) the Government's decision to let CLCAMs determine freely their operating policies and procedures (interest rates on deposits and loans, recruitment f staff, etc.). 7. It was envisaged that, during the project period, CLCAMs/CRCAMs would constitute themselves into a formal National Federation of Savings and Loans Cooperatives govemed by elected representatives, and that the CPU would be converted into the Federation's Technical Secretariat. Developments in this regard have been slower than expected as it was recognized that the newly established management and financial disciplines might be undermined, should the checks and controls exercised by a strong and independent CPU disappear too suddenly. However, CLCAMs' Presidents have increasingly requested to have a greater weight in the management of the Network. It has nuw been decided to formally establish the Federation and make of its elected Board the policy-making and regulatory body of the Network. It has also been decided that the regional CRCAMs, which until now have been engaging in banking operations, sometime competing with affiliated CLCAMs for deposits and loans, would be transformed into purely regional service units (URCLCAMs) providing training support and technical backstopping to CLCAMs in their region. 8. Since 1989, CLCAMs have made vigorous efforts to restore their financial viability. Good management and stringent credit policies have allowed a 100% recovery rate of their loans and a satisfactory spread (24% p.a. charged on loans and 3% p.a. paid on deposits) has improved their eaming capacity. Over half of the 50 CLCAMs were able to break-even or show profits for the year endino September 30, 1992. Projections of the Network's future operations and financial situation indicate that CLCAMs would have to mobilize about CFAF 10.0 billion in deposits to cover the operating expenses of the regional service units and about CFAF 21 billion to fully cover in addition those of the Federation's Technical Secretariat (assuming that 30% of CLCAMs' annual profits is used for this purpose). These levels of deposits would be reached around years 2001 and 2007 respectively. It is expected that the total amount of deposits mobilized by CLCAMs will increase from CFAF 3.5 billion at present to about CFAF 7.0 billion by the end of the project period (1998). By that time, CLCAMs would finance about 75% of URCLCAMs' operating cost and 15% of the Technical Secretariat's. These projections are however based on conservative assumptions with regard to deposit growth rates (15% p.a.) and resource use policy (only 50% of total savings deposits to be used for extending credit, the balance being invested in risk-free money-market instruments). Faster deposit mobilization and more favorable credit ceilings would speed up the financial viability and autonomy of the Network.  -3- 9. E-oect Ob ves. The proposed project would be the second phase of the Govemment's long-term strategy to develop a viable rural financial intermediation system and for promoting broad-based economic growth and improved living conditions in rural areas. It would build upon the achievements of, and lessons from, the First Savings and Loan Cooperative Rehabilitation Project to continue the financial and institutional development of the Network toward the ultimate obJective of creating a private system that would be financially viable and autonomous. 10. Ptj2lQ;aDcriptjon. The Project would be implemented over a five-year period (1994- 98). It would support the establishment of an efficient institutional structure for the Network through: (a) the creation of a representative apex policy-making body with a strong Technical Secretariat for ensuring proper policy guidance for, and control over, the Network'.- operations; (b) the conversion of CRCAMs into efficient service units (URCLCAMs) providing technical backstopping to CLCAM*; and Cc) the training of staff at all levels. The total project costs are estimated at US$ 15.1 million for investments (office equipment, vehicles, buildings), technical assistance and development services provided to CLCAMS by the Technical Secretariat and the URCLCAMs. The estimated project costs and financing plan are presented In Schedule A. 11. The project's CLCAM Comoonent (26% of total project costs) would include (a) office equipment for the computerization of the CLCAMs accounting system, and (b) provisions to cover past operating losses of CLCAMs incurred until September 1992, as well as the start-up operating deficits of about four new CLCAMs to be established during the project period. The project's URCl,LAM Component (21 % of the project total costs) would finance the cost of development services provided by URCLCAMs to CLCAMs: assistance for accounting/financial management, training of members and managers, promotion of the movement to increase membership. It would also finance the renewal of one vehicle for each of the regi,nal units. The project's National Federation Comnonent (53% of total costs) would support the establishment of the apex-body of the Network and finance (a) te design sr I installation of CLCAMs computerized accounting system as well as office equipment and vehicles for the Federation's Technical Secretariat, (b) about 78 man-months of long-term technical assistance (Secretariat's Deputy-Executive Secretary and Financial Controller) and short-term consultancies, (c) training, study tours and ann -Y external audits of the Network's operations, and (d) the development services provided to CLCAMs and URCLCAMs by the Technical Secretariat (technical backstopping, training and inspection). 12. The project's detailed financing plan has been agreed upon with the project's co- financiers. CFD and FAC would finance CLCAMs' past losses and proJected (limited) future operasng deficits, bu ldings, computerization of accounts and part of the technical assistance. The Swiss Development Cooperation (SDC) would finance training, part of the technical assistance and annual external audits. IFAD and EEC would finance part of the operations of CLCAMs and URCLCAMs In the Atacora and Mono regions through on-going area development projects. IDA funds (US$ 3.8 million) would finance the cost of development services provided to CLCAMs by the URCLCAMs and the FederatiGn's Technical Secretariat to the extent that these costs would not be financed out of CLCAMs' annual profits (para 8). IDA funds would be made available to the Govemment on standard IDA terms. All extemal financing, including IDA's, would be passed on to the Network by the Govemment as a grant. 13. Proiect lmDlementation. The project would be implemAnted by the various units of the Network under the monitoring of a 'Comite de Concertation' including representatives of the Federation, the Govemment and donors. The Network's policy-making and supervisory body would be the Board of the National Federation, composed of elected CLCAM Presidents and assisted by a Technical Secretariat responsible for supervising the day-to-day activities of CLCAMs and URCLCAMs and managing CLCAMs' excess liquidity.  - 4 - 14. The basic operational policies of the Network have evolved through the implementation of the First Project. Some were spelt out from the very beginning in CLCAMs statutes (freudom to fix intbrest rate policies), others adopted to respond to specific needs or problems. These policies and procedures were further spelt out in a comprehensive "Statement of Operational Policies" defining the Network's policies and procedures in the areas of deposit mobilization, lending, intemal controls, Network development and financing. The Technical Secretariat would take over from the Central Project Unit (CPU) established under the First Project. It would be headed by a Beninese Executive Secretary recruited under terms and conditions acceptable to IDA, seconded by an expatriate financial controller recruited to design and set up the Network's computerized accounting and management information system and supervise its financial management. 16. Control over the Network's operations would be effected by the Technical Secretariat, the project's 'Comit6 de Cor :ertation' and annual external audits. There is currently a regulatory vacuum in the countries of the West African Monetary Union (UMOA) with regard to the supervision of grass-root financial cooperatives, as these institutions do not fall under the purview of BCEAO. The latter, however, has launched a study to establish an adequate regulatory framework for financial cooperatives. Once adopted, this framework would be applied to the Network's operations. Finally, project implementation and the Network's progress toward institutional and financial viability would be assessed during a mid-term review to be undertaken before September 30, 1996. 16. Proiect Sustainabilitv. The Govemment's commitment notto interfere in the Network's operations has fostered a strong feeling of ownership among members. Conservative, self imposed prudential ratios have been strictly enforced by CLCAMs' presidents and managers, and it is now further a~-raed that any CLCAMs which would not be able to fully cover its operating cost through intemally ;jenerated revenues for three consecutive years would be closed down. Projections of CLCAMs' future activities and profitability indicate that all would become profitable before the end of the project period (except possibly very few located in the poorest areas of the country) and that they would be able to substantially contribute to the financing of URCLCAMs' and Technical Secretariat's operating costs. Although these projections indicate that the Network will require continued external support beyond the project period, they also demonstrate that substantial progress would be achieved during the project toward financial autonomy and sustainability. 17. Lessons Leamed. The project's design capitalizes on experiences gained during the implementation of the First Project and of similar operations in other countries (Rwanda, Burkina Faso). It emphasizes in particular the need to build the Network from the grass roots, avoid the Govemment's Interference and foster a sense of ownership by members, achieve transparency and rigor in policy- making and management, put emphasis on savings mobilization and gradually relax limits on lending only when financial discipline becomes well established, avoid using external funds, contain operating costs at all levels and allow sufficient margins to cover these costs. It also recognizes that the institutional development of the Network is a long-term process and that long term extemal support will be needed before the Network can be fully autonomous. 18. Rationale for IDA Involvement. As for the First Project, the proposed project is fully in line with IDA and govemment strategy of fostering private investments and growth, and promoting the establishment of viable financial institutions. The country strategy for Benin was last discussed by the Board in February 1992. The project fits clearly with the objectives of supporting the development of rural financial intermediation through local initiatives based on mutualist principles, removing direct government interference in financial intermediation and generally encouraging greater involvement of rural communities in the management of local institutions. Several countries in the sub-region are attempting to establish or strengthen similar decentralized, mutualist rural financial Intermediation systems, often with Bank/IDA support. IDA continued involvement in the development of the Beninese Network would allow the dissemination of lessons and best practices, and the successful development of CLCAMs in Benin will have wide implications for other countries. The Govemment welcomed IDA's support for the First Project and both the Government and the Network have emphasized their desire for continued IDA's association with the second phase of the rehabilitation program.  -5- 19. Aareed Acons. The signing of a Subsidiary Agreement between the Govemment and the Federa ion would be a Condition of Effectiveness of the IDA credit. The following assurances were obtained from the Government and the Network at negotiations: (a) the Board of the newly established Federation would be elected before December 31, 1993; (b) CLCAMs would not lend rmore than 50% of their total savings deposits; (c) a CLCAM would be permitted to make new loans only to members who have completely reimbursed previous loans that are due, but will not lend to any member If its overall recovery rate is less than 90%; (d) total outstanding borrowing by a CLCAM from an existing extemal line of credit would not exceed 30% of Its total deposits and no new external line of credit would be accepted by the Network without agreement of the *Comite de Concertation*; (e) CLCAMs unable to break even financially for three consecutive years would be closed down; (f) beginning In FY94, CLCAMs would contribute 30% of their annual psofits toward the cost of URCLCAMs' services; (g) the performance and employment prospects of the Technical Secretariat's Executive Secretary and Financial Controller would be reviewed by September 30, 1994 by the Board of the Federation and the project's cofinai ciers; (h) a project mid-term review would be undertaken before September 30, 1996; and (i) the cost reduction measures and yearly monitorable indicators that have been developed and agreed upon would be systematically included in annual work programs submitted to IDA's approval. 20. Environmental Aspects. The project does not entail any potential environmental risk. It has been classified as a Category C project. 21. Proaram Obiective Categories. The project would support the development of a resilient private financial intermediation system in rural areas. It has thus a strong institution buihding objective. By fostering broad-based rural investment and growth, it would also have a very positive impact on poverty alleviation. Finally, it would promote the empowerment of rural populations for the management of local institutions. 22. Benefits and Risks. The proposed project would consolidate the substantial progress made under the First Project in the fInancial and institutional rehabilitation of the country's Savings and Loan Cooperative Network. It would provide rural dwellers with improved safekeeping services and better access to credit for productive and social purposes. It would therefore improve rural Incomes and living conditions. It would also provide an efficient, low cost mechanism to mobilize rural savings for productive purposes throughout the economy. The risk of extemal pressures on the Network's activities would largely be eliminated by the Government's commitment not to interfere in its activities and the Network's self-imposed limits on the use of external lines of credit. The soundness of CLCAMs' management and the cost effectiveness of their operations would be ensured by clear guidelines and safeguards spelt out in the Network's Statement of Operational Policies and continued strong monitoring by the Federation's Board and Technical Secretariat. The main project risk would be that deposit mobilization be slower than anticipated and therefore that it take longer for the Network to become financially self-sustaining. Deposit potential critically depends on rural incomes, and cotton production and prices in particular have a significant impact in this respect. Recent experience indicates that, despite very depressed cotton prices, CLCAMs have been able to increase deposits at more than 15% p.a., mainly through increased membership. This trend Is expected to continue through major efforts to seek membership from a wide range of rural dwellers (civil servants, traders) for reducing deposit variability associated with fluctuating agricultural Incomes. 23. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve it. Lewis T. Preston President Attachments Washington, D.C June 1, 1993  -6- SCHEDULE A REPUBLIC OF BEJNIN SECOND RURAL SAVINGS AND LOANJ COOPERATIVE REHABILMTATON PROJECT ESTIMATED PROJECT COSTS AND FINANCING PlAN Estimated Proiect Costs Local Forelan Tota % of Base US$ million- : Sugnort to CLCAMs Operating Costs (CLCAMs) .3 0.2 2.5 17.4 Provision for past losses (to 9/1992) 0.6 - 0.6 4.2 Construction of CLCAM premises 0.3 0.1 0.4 2.8 Office and Accounting Equipment Support to URCLCAMs Operating Costs (URCLCAMs) 2.5 0.3 2.8 19.4 Vehicles (replacements) _ 02 2 1.4 2. 0.5 3.0 SurwoDtt to CO/Federation Staff & Operating costs 3.3 0.3 3.6 25.0 Technical Assistance (long-term) 0.3 1.1 1.4 9.7 Vehicles, & Training Equipment 0.1 0.2 0.3 2.1 Computerization 0.1 0.3 0.4 2.8 Consultants Special Studies, Research, 0.2 0.8 1.0 6.9 Training, Extemal Tours 0.1 0.3 0.4 2.8 Annual Audits 02 0.4 04. 4.1 33 M Total Base Costs 9.8 4.6 14.4 100.0 Contingencies 0Q5 0-2 0. TOTAL COSTS 10.3 4.8 15.1 Financina Plan CLCANs IDA CFD SU fAC IAID WCAL -.........-- .......C..... (US Mittion).--------------------- CMAX Caouonent 2.6 - 1.0 - 0.2 0.1 - 3.9 URCLCAN Caiio;net 1.8 0.7 0.1 - - 0.3 0.2 3.1 Federation Compont i 3.1 1.7 1 09 Li -. _ 3. TOTAL 9 1 .9u 2-8 J0 - MX) 33.8 25.2 18.5 12.6 6.0 2.6 1.3 100.0  7-7 SCHEDULE B Paae I of 2, REPUPLIC OF BENIN SECOND RURAL SAVINGS AND LOAN COOPERATIVE REHABILTATION MOJEC3 PROCUREMENT ARRANGEMENTS (US$ Mn) Expenditure Catenories Igli LO Qtbhe NIL .F. Civil Works (CLCAM premises) 0.4 0.4 Computers & Equipment 0.7 0.7 Vehicles 0.5 0.5 Operating Costs of ClCAM 3.3 3.3 Development Costs: - URCLCAMs 2.9 2.9 (0.7) (0.7) - Federation Secretariat al 0.2 0.2 3.4 3.8 (0.2) (0.2) (2.7) (3.1) Technical Assictance 2.6 2.6 Extemal Audits 0.6 0.6 Extemal training & study-tours Oa 0 Total Project Costs 0.2 0.2 6.3 8.4 15.1 (0.2) (0.2) (3.4) - (3.8) # m8 * mm mm Note : Figures in parentheses are the amounts financed by IDA credit. N.l.F.: Not IDA-financed. a/ Procurement under ICB and LCB is for office equipment and material  -8- SCHEDLU Paxe g f 2 REPUBLIC OF BENIN SECOND RURAL SAVINGS AND LOANI COOPERATIVE REHABILITATION PROJECT DISBURSEMENJTS IDA Alocation % of Expenditure to be _ zUSS)Mn_financed by IDA (1) URCLCAMs Development Costs 0.7 60 50 40 35 30 (2) Technical Secretariat 2.9 85 85 85 85 85 Development Costs (3) Unallocated Oa TOTAL 3.8 n/ Calendar Years. Esqimated :DA Disbursements IDA Fiscal Year jf994 J~i 1997 1 1 US$ million Annual 0.9 0.7 0.6 0.5 0.5 0.6 Cumulative 0.9 1.6 2.2 2.7 3.2 3.8  9 - SCHgOUL9 C REPU8LIC OF BENIN SECOND RURAL SAVINGS AND LOAN COOPERATIVE REHABILITATION PROJECT Timetable of Key Proiect Processing Events (a) Time taken to prepare: 2 years (b) Prepared by: UCP/CRCAMs, Consultants (IRAM), IDA Stuffy (c) First IDA mission: November 1991 (d) Appraisal mission departire: June 1992 (e) Negotiations: March 1993 (f) Planned date of Effectiveness: September 1993 (g) Relevant PCRs and PPARs: Borujou I Rural Development ProJect Forestry Development Project k'Messrs/mme.: A. Haji, J.P. Chausse, 0. Sissoko, P. Quassivi, A. Brizzi  -10- SCZEDULE D Paae I of 3 REPUBLIC QF BENIN SECOND RURAL SAVINGS AND LOAN COOPERATIVE REHABILITATION PFlOJET A. SUMMARY OF LOANS AND IDA CREDITS (As of March 30, 1993) Amomt in USS million (less cancellations) _...._................ Lem or fiscal Uhds- Cabdrg Credit No. Tear Borrouar Purpose Bank 1 ursed Date Credits 26 Credits elosed 229.61 C13140-BEN 1963 REPUBLIC OF BENIN RURAL DEVT III (ZOU) 20.00 .17 0NOW9 CR) C15300-BEN 1985 REPUBLIC Of BENIN TECHNICAL ASSISTANCE 5.00 1.73 03/95R C17210-BEN 1986 REPUBLIC OF BENIN WATER II 10.00 1.92 12/31/93 C17480-BEN 1987 REPUBLIC OF BENIN PUBLIC ENTERPRISES 15.00) 12.82 06/30/95 C18070-BEN 198? REPUBLIC OF BENIN TRAMSP. INFRAST. 19.50 1.84 03/31/95 c18770-BEm 1988 REPUBLIC OF BENIN BOROUI RD. 11 21.00 0.88 04d34 (R) C19600-BEM 1989 REPUBLIC OF BENIN TELECOMIUMICATIONS 16.00 4.07 12/31/93 C20310-BEN 1989 REPUBLIC OF KENIN HEALTH SERVICES DEV 18.60 9.52 09/30/97 C20860-BE1 1990 REPUBLIC OF MENIN RURAL CREDIT 2.50 .23 12/31/1 C22830-BEN(S) 1991 REPUBLIC OF BENIN SAL II 55.00 32.01 06/30/3 C22840-BEN 1991 REPUBLIC OF BENIN POWER REHAB 15.00 14.67 12131/97 C2O0-BEN 1991 REPUBLIC OF BENIN AGRIC. SERVICES 12.30 11.87 06/30"5 G22860-BEN 1991 REPUBLIC OF BENIN PRE-INVESTNENT 5.40 5.03 06/30/95 * C23380-BEN 1992 REPUBLIC OF DENIM URBAN RENAO & NIT 22.84 23.18 12/31/97 C23440-BEN 1992 REPUBLIC OF DEIN M NGT OF MAT RESORCES 14.10 12.02 12/31/9 TOTAL nurber Credits a 15 252.85 131.96 TOTAL*** 481.85 of ihich rqpid 17.72 TOTAL held by Bank & IDA 46.13 of which repaid TOTAL undfsbursed 131.96 Notes: ..................... * Not yet effective N Not yet signad "'Totat Approved, Repayments, ad Outstanoing Balance represent both active and inactive Loans and Credits. (R) indicates formally revised Closing Date. (S) Indicates SAL/SECAL Loans and Credits. The Net Appro-ed and Bank Repayments are historical value, atl others are market value. The Signing, Effective, and Closing dates are basd upon the Loan Department's official data an are not taken frm the Task Budget file. For Credits ihere no disbursements have yet taken place, the undisbursed balance may exceed the credit amunt oim ae; the time of Board approval due to an appreciation of SDR vis-a-vis the US dollar.  -1t1 - SCHJEDULE REPUBLIC OF BENIN SECOND RURAL SAVINGS AND LOAN COOPERATIVE RBEHAILITATION PROJECT Proiects with Sionificant Disbursement Laa Public Enterorises (Cr. 1748-BEN) The top priority of the project was to liquidate and privatize those enterprises which were not viable or had financial problems. This did not involve high levels of disbursement but was very effective in rationalizing the sector and Govemment's portfolio, and achieved results above expectation despite the low disbursement level. However, a mid-term review is going to be completed In FY93 with the objective of restructuring project activities and improving disbursement performance. SAL 11 (Cr. 2283-BEN) Slow disbursement is due to prolonged implementation of the restructuring measures agreed with the Govemment and delays in the compliance with the conditions related to second tranche release. Second tranche has now been released in May 1993. Health Services Develooment 1Cr. 2031-BEN) Disbursement lag is due to delays in releasing the third tranche of the quick disbursing component. Measures awaited are: a) an evaluation of the execution of the 1992 health sector recurrent budget and the 1992-95 sector investment program; b) the establishment of procedures for the harmonization of the cost recovery system; and c) draft decrees and orders on pharmaceutical legislation have to be presented to the Ministers" Council for adoption. Measures required for release of the tranche have been agreed and are being implemented by the Govemment. The release is expected shortly. Telecommunication (Cr. 1960-BEN) Although actual disbursement is 73% of forecasts, the investment program is expected to be completed within set targets (1993) and 91% of the proceeds of the Credit have been committed. Power Rehabilitation (Cr. 2284-BEN). Aaricultural Services (Cr. 2285-BEN). Pre-lnvestment (Cr. 2286- These Credits were all signed in early FY92 and became effective only recently. Disbursement Is expected to proceed normnally. Geeral The unsatisfactory management of special accounts by the Govemment debt management agency contributes to slow disbursement. This problem is being addressed, inter alia. by the use of project's implementing agencies for special accounts management.  -12- SCHEDULE-D Paoe 3 of3 REPUBLIC OF BENIN SECOND RURAL SAVINGS AND LOAN COOPERATIVE REHABILITATION PROJECT A. STATEMENT OF IFC OPERATIONS (As of May 31, 1993) Original Gross Amounts Fiscal Type of Loan EauI itv To XQar Comwny Business US$'mIn 1991 Bank of Africa-Benin (AEF) Banking - 0.24 0.24 j/ 1991 SOBEP (AEF) Fish Processing 0.28 0.06 0.34 1992 Sobebra Beer Mfg. 5.00 - 5.00 3 1992 Fruitex (AEF) Pineapple Plantation 0.41 - 0.41 TOTAL 5 03 A Less droppage, non commitments and writeoffs 5.04 0.24 5.28 Net Commitment held by IFC 0.65 0.06 0.71 V/ Investnents unsigned 21 Investment dropped  NIGER IpAJ j Al.-_.- vN'E / N Th.IAGE A/LTL ATLANrlC G,aLLUq b- |\ 5> \ i] IOCEAN t 7 1 wt r, C-' 2 Oo I NIGERIA BURKINA FASO 0 A f /. o -1K , \ ,,r' 0 R A Na 5 ) . B ol R G / ON U R ) 10,~~~ YS. ) (- LcF BURKINA EASO!' w lBENIN \ i t g ' ~~~~SECOND RURAL SAVINGS AND LOAN ~ . ' I R : _ICOOPERATIVE REHABIUTA se (S a . }- ~~~~~~~~~~Location of URCECANI and CLCAMs S F -7 I a URCECAM (UrRion of Regional Swing cod qo T G0CI1B OR G O_. .. m- g T.,A O / )Earh R- I . ''. 0, * I,~~~~~~~~~~~loWrinatiel Alrport NRA~~~iw r F J c ~~~~~~~~~~~~~~X @ tqo~~~~~~~~Ntional capmsixs .0 C1 /-~ }; x j @ troir Copitls ' !t ~~~~~~~~~~~~~~~~~~~~~~~~"'p'm ! o -' Pi1 ric r > t b ~~~~~~~~~~~~~0 20 40 a0 00 100 OAblplSCONDRURLOMViGSAT LA COOPERATN I G E R I A GHAN A_L-- Bight onf Benin \ E ! 1- < 2 - 4a