THE WORLD BANK - INTERNATIONAL FINANCE CORPORATION - MULTILATERAL INVESTMENT GUARANTEE AGENCY

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 2 Measuring Development Results in IFC  Major progress in development results measurement and reporting  Collaborating with partners towards improved results measurement  Development Results : Investments, Advisory Services, and Combined  But there are still challenges  Next: Development results again integrated into Annual Report FY08

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 3 Major progress in development results measurement and reporting  Improved standardization of indicators for investments and advisory service (AS) business lines  New operational procedures: Set expectations at approval  continuous monitoring (rather than one-off evaluation)  Regular feedback by central units to improve quality, M&E networks  In-depth evaluations: External, control group, impact  FY07 Annual Report: IFC breaks new ground –Integrated reporting (financial, development, sustainability, donor) –First MDB to report current development results of entire portfolio –First MDB with external assurance of development results –Strong feedback - internally and externally

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 4 Results - Investments Results vary by region, partly due to investment climate Africa and MENA: Difficult regions where IFC has redoubled efforts, combined investments with AS Direct investments in SMEs in difficult regions: Weak. But stronger results through financial intermediaries with AS Preliminary DOTS data as of March 3 rd, Data as of June 30, 2008 will be used in IFC’s Annual Report.

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 5 Implications: (1) Invest where the climate is improving; (2) Help to improve it (e.g. using advisory services) Investment climate – a major driver of IFC’s investment results

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 6 IFC: Concentrated in IDA countries – and increasingly so

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 7  Rollout of M&E Tools (Cost-Benefit)  More M&E Resources  Standardization of performance indicators  Learning –Program reviews –Experimental designs Advisory: Progress in Measurement

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 8 Development Results Access to Finance

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 9 Development Results Corporate Advisory Services

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 10 Development Results Infrastructure

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 11 Development Results Environment and Social Sustainability

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 12 Development results: Advisory Services * Impacts often not yet realized when project closes and also more difficult to achieve

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 13 AS Additionality – Investment Project Madagascar IFC Investment $290 per capita income Only 7% use banking IFC AS Results: Increased financing of SMEs by $27m+ 2 new greenfield commercial MFIs  MicroCred - $6.5m loans  AccessBanque - $3.3m loans 4 SME finance programs  BNI-Crédit Lyonnais: 511 loans, $11.2m  BFV-Société Générale : 322 loans, $10.6m  SME Equity Fund:15 deals, $2.6m  BNI Leasing: 80% growth from Equity: $1.1m -Debt: $5.2m -Risk sharing: $12.5m -SME fund: $3.4m IFC Investments -AS Package: $2m IDA -Risk sharing : $2.5m -Leasing AS: $100K -Banking AS:$2.4m -SME BDS: $6m * Loans = loans disbursed

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 14 Development results: Advisory Services IFC- IDA (7 countries in Africa) Business Enabling Environment 6 Laws/regulations passed Time to register a business reduced from 81 to 42 days (Ghana) Time to complete a land title search reduced from 12 days to 30 minutes (Uganda) Time to obtain construction authorization reduced from 30 to 19 days (Mali) Business set up fee (patente) eliminated (Mali) Access to Finance $ 30,312,793 - value of new loans disbursed 2 new leasing companies, a leasing and credit bureau associations created (Madagascar, Kenya) $3,239,000 - Increased leasing volume (net) in Madagascar

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 15 Randomized Experiments  Ex-ante and Systematic (20)  Control and Experimental Groups  Address Attribution  External partners

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 16 Development results: IFC-IDA Advisory Services-Control Groups Business Development Services 5,961 MSMEs received subsidized BDS services 41% of BDS’ operating costs is covered by clients’ fees (Nigeria) SMEs’ sales increased from 64 to 104 million Kshs or by ~ $608,144 (Value chain, Kenya) In Nigeria: Experimental design for firms assisted by BDS providers  --Assisted group outperformed control group in sales and employment. Sales increased by 84% and employment increased by 26 percent for assisted firms

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 17 Development Results-Advisory Program Reviews  External, Independent (9 completed)  Learning Focus  Scale up and Replicability  Monitor Notes

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 18 But Challenges Remain: Future Areas of Focus  Addressing attribution is not easy  Standardization: More work ahead, and still presents limitations  Weighted vs. unweighted results –Unweighted: every company counts as one (with $ or $100 million IFC investment) –Weighted recognizes that larger IFC investments (and projects) tend to have greater costs and benefits.  Risk adjusted success rates? –Success probability is lower in riskier countries and types of projects (e.g. venture capital, greenfield, small businesses, equity etc.)  Time to maturity: Results take time to materialize  Measuring impacts, particularly on poverty

THE WORLD BANK - MULTILATERAL INVESTMENT GUARANTEE AGENCY - INTERNATIONAL FINANCE CORPORATION 19 A Solution: Deepen Partnerships  Harmonization on measuring results, indicators, reporting, policies –Good practice standards – M&E for advisory services –Pricing policy  Partnerships on M&E –Benchmarking –More joint evaluations –Secondment of M&E staff by donors –In-depth evaluations:  Attribution: Control group experiments  Poverty impacts