LOAN NO. 1785-SAM(SF): SMALL BUSINESS DEVELOPMENT PROJECT PROJECT ADMINISTRATION MEMORANDUM February 2002CURRENCY EQUIVALENTS (as of 31 October 2000) Currency Unit = Tala ST1.00 = $0.267 $1.00 = ST3.742 ADB Asian Development Bank ANZ Bank = _—_ Australia and New Zealand Banking Group BDS = business development service ces - Central Bank of Samoa DBS = Development Bank of Samoa orc! = Department of Trade, Commerce and Industry FMC - Finance Management Company oP = _ "gross domestic product rs - "+ implementing agency IFAD = Intemational Fund for Agricultural Development MSE = micro and small enterprises NGO = nongovermment organization NPE _ + National Provident Fund NZODA = _ New Zealand Overseas Development Assistance PCB ~ Pacific Commercial Bank POMC - Pacific Developing Member Country PFI = participating finance institutions PMU = project management unit PO = participating organizations PSC project steering committee SBDF - Small Business Development Fund SBEC = Small Business Enterprise Centre SBLGS = Small Business Loans Guarantee Scheme SES = statement of economic strategy ‘SMEA = Samoa Manufacturer's and Exporters’ Association SOE =. state-owned enterprise SPPF =. South Pacific Project Facility TA = technical assistance UNDP = United Nations Development Programme. VAGST = value added goods and services tax ver = Venture capital fund WiBF = Women in Business Foundation NOTES (). The Govemment's fiscal year (FY) ends 30 June (i) In this report, “$" refers to US dollars.a CONTENTS: THE LOAN Introduction Processing History Loan and Project Summary Logical Framework Project Performance Report (PPR) moom> PROJECT DESCRIPTION A. Objectives and Scope B. Outputs/Components C. Equity Investment in the Samoa Venture Capital Fund IMPLEMENTATION ARRANGEMENTSISCHEDULE ‘A. Executing Agency/implementing Agencies B. Project Steering Committee C. Project Management Unit D. Project implementation Schedule COST ESTIMATES AND FINANCING PLAN A. Cost Estimates B. Financing Plan CONSULTANTS A. Inputs B. Recruitment Procedures PROCUREMENT A. Basic Principle B. Proturement Procedures Page No. wana 10 10 " " 4 12 12 13 13 13vu. vil. xil, xi, xiv. DISBURSEMENT A. Basic Principle B. Imprest/Counterpart Accounts CC. Allocation of Loan Proceeds D. Conditions of Withdrawal from Loan Account , Withdrawal Applications F. Disbursement Procedures G. Disbursement Reports H. Contract Awards and Disbursement Projections |. Loan Closing Date REPORTING REQUIREMENTS A. Quarterly Progress Report (QPR) B. Audit Report C. Project Completion Report PROJECT MONITORING AND EVALUATION ‘A, Project Performance Monitoring LOAN AGREEMENTICOVENANTS: ‘A. Loan Agreement/Covenants IMPLEMENTATION OF ACCOMPANYING TA ANTICORRUPTION A. Anticorruption Policy B. Violations of ADB's Anticorruption Policy. C. Financial Support to Individuals or Entities Involved in or Assisting Terrorist Groups KEY PERSONS INVOLVED IN THE PROJECT ENCLOSURES ‘A. CD-ROM, Consulting Services B. CD-ROM, Disbursement DESIGN CHANGES 15 15 15 15 16 16 7 19 19 19 2 24 2 2 2B 23 24 RR ar 30ii Provided in addition to the PAM: Handbooks and Manuals on Consulting Services, Disbursement, Procurement and Financial Report Electronic copies of: (compliance with loan covenants (i) sample withdrawal application formsLIST OF ATTACHMENTS ‘Attachment No. Name Reference i Project Framework T The Loan 2 Project Performance Report (PPR) |. The Loan 3 Implementation Schedule IM Implementation Arrangements 4 Detailed Cost Estimates and Financing Pian _IV. Cost Estimates and Financing Plan 5 ‘Terms of Reference for Consulting Services. V. Consultants 6 List of ADB Member Countries VI. Procurement 7 Indicative Procurement Package VI. Procurement 8 Disbursement Letter Vil. Disbursements 9 ‘Sample Withdrawal Application Forms Vil. Disbursements 10 ‘Sample Projection Sheet VII. Disbursements " Sample Format for Preparing Progress Reports Vill. Reporting 7 Requirements 12 Audit Letter VII Reporting Requirements 13 Suggested Outline for PCR Vill. Reporting Requirements 14 Loan Agreement X. Loan Agreements! Covenants 15 Compliance with Loan Covenants X. Loan Agreements! Covenants1 THELOAN A. Introduction 1 ‘The Project Administration Memorandum (PAM) is a guide to the management, implementation and monitoring of the Small Business Development Project [Loan No. 1785-SAM(SF)] and the associated technical assistance grant for Capacity Building of Financial and Business Advisory intermediaries (TA No. 3549- SAM). The PAM is intended for use by staff of the Executing Agency (EA), the Implementing Agencies, other concemed govemment agencies and the ADB. The PAM Contains information and explanations about the Project and the basic requirements and procedures on recruitment of consultants, procurement of goods and services, withdrawal of loan funds, progress reporting, performance monitoring and auditing requirements under the Project. 2 The contents and interpretation of the PAM have been discussed with the EA, and are subject to the provisions of the RRP and the Loan Agreement. In case of conflict among the documents in meaning or intent, the provisions of the Loan Agreement shall prevail B. Processing History Approval of PPTA 24 September 1999 Fact-Finding Mission 15-19 May 2000 Management Review Meeting 26 June 2000 Appraisal Mission ‘31 July-10 August 2000 Staff Review Committee Meeting 15 September 2000 Loan Negotiations 12-13 October 2000 Board Consideration and Approval 21 November 2000 Loan Signing 6 March 2001 Loan Effectiveness 8 June 2001 Pre-Inception Mission 17-21 September 2001 Project Inception Mission March 2002C. Loan and Project Summary Borrower Project Description Classification Environmental Assessment Rationale Independent State of Samoa The Project is designed to generate additional income and employment opportunities within the micro- and small enterprise (MSE) sector for all Samoans, with an emphasis on those in rural areas. Economic Growth Category C. Environmental implications were reviewed, and no significant adverse environmental impacts were identified ‘Over 80 percent of all businesses in Samoa have five or fewer employees. Most of these enterprises do not have adequate skill levels to create, manage, and increase the size of their enterprises. ‘These enterprises lack equity and access to bank borrowings to provide a sustainable financing basis, for their development. With at least 80 percent of land under customary communal ownership, which cannot be alienated either by sale or mortgage, most business enterprises have limited choices of acceptable securities that they can offer to access financial services. The limited freehold tand that is available for securing borrowings from commercial banks is concentrated around the Apia urban area. Therefore the problem of access to financial services is compounded for rural and Savaf-based business enterprises. Use of altemative securities for freehold land has.been limited. Since 1996, the Government has embarked on a process of economic reform and liberalization, which recognizes the private sector as the engine of growth. The reform process has resulted in an environment that is conducive to economic growth. ‘The Government's statements of economic strategy have consistently reinforced the partnership between the private sector and Government. After focusing on major macroeconomic reforms, the Government is now developing strategies to broaden the spread of benefits or economic. growth. ‘ADB has supported these efforts through financial Sector Program loan. A key component of these strategies is the development of infrastructure of the village economy, which centers around MSEs. Improving MSEs access to credit, supported byObjectives and Scope Cost Estimates Financing Plan Loan Amount and Terms Loan Amount Loan Terms Interest Charge Grace Period Equity Investment 3 improved access to services provided by business development service providers, will contribute to growth in employment and income earning ‘Opportunities in this sector. The Project reflects the ADB poverty reduction strategy. ‘The Project's goal is to generate income and employment opportunities by expanding the MSE sector by improving access of MSEs to credit, and business training and advisory services. The Project has four components: (i) expand the small business loans guarantee scheme, (i) support a pilot microfinance facility, (il) enhance business advisory and training services, and (jv) improve the policy and legislative environment for small business development. The total cost of the Project is $45 million equivalent including taxes and contingencies. ‘ADB will provide a loan of $3.5 millon equivalent (78 percent of the total cost). Government financing will amount to $1.0 milion equivalent (22 percent of the total cost). SDR 2.697 milion (approx US$3.5 mn) 32 years 1% p.a. during grace period 1.5 % pa. thereafter 8 years ‘ADB will subscribe up to the equivalent of 25 percent of issued and paid-up capital in a Samoan venture capital fund (VCF). ADB's investment will be up to $400,000. The overall size of the VCF is proposed at $1.6 milion. Other primary shareholders are likely to be the Intemational Finance Corporation (IFC), the Australia and New Zealand Banking Group Ltd., and Samoa National Provident Fund. The target market for the VCF will be venture capital investments of up to $100,000. Project size is expected to range from roughly $67,000 to $400,000 equivalent, with a majority being expansion projects. The life of the VCF is proposed at 10 years. Exit options for the VCF will be existing shareholders of investee companies, Commercial financiers will provide take-up when the specific business matures and becomes bankable under ‘conventional criteria,Period of Utilization’ Implementation Arrangements Executing Agency Procurement Consulting Services Estimated Project ‘Completion Date Untii 30 June 2008 The Treasury Department will constitute a project steering committee (PSC) at project start-up, with the secretary of finance as the chair. The PSC will establish a subcommittee to manage the SBDF. The PSC wil establish a project management unit, (PMU), with a manager recruited from the private sector. DBS will be the Implementing Agency (IA) for the onlending of the pilot microfinance component. The Women in Business Foundation (WIBF) will be the initial participating organization for the microfinance component. SBEC will be the IA for the SBLGS component. Business training, monitoring, and advisory services components to be funded under the SBDF will be awarded to accredited participating organizations (initially identified as SBEC and WIBF), based on medium- term work plans submitted ‘by the participating organizations, and approved for funding from the BOF. ‘Treasury Department Al procurement under the Project will folow ADB's Guidelines for Procurement. Each supply contract for goods and services (other than minor items) will bbe awarded on the basis of intemational shopping. Contracts for the supply of certain minor items estimated to cst, in the aggregate, the equivalent of $94,000 or less, may be procured using purchase. APMU manager will be engaged for the duration of the Project. Furthermore, a systems specialist will be engaged for 6 person-months. A small business development expert wil be engaged for up to 5 person-months, and auditors on an annual basis. Legal experts may be engaged as required to facilitate drafting of various agreements under the Project. All consultants to be financed out of the loan proceeds will be engaged in accordance with ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB 28 February 20065 Project Benefits The Project will contribute to poverty reduction And Beneficiaries through improving access of micro- and small enterprises to credit, and business development services, thus faciitating —_income-generating activities. Itis expected that during the five years of project implementation, the Project will directly create an additional 1,400 direct income and employment opportunities, benefiting at least 5,600 people. Technical Assistance Technical assistance (TA) will be provided for Capacity Building of Financial and Business Advisory Intermediaries. The TA will support (i) policy and legislative reviews; (i) institutional strengthening of SBEC, DBS, WIBF, and other participating institutions; and (ii) the setting up an upgraded chattels registry and a new credit reference scheme. Consultants will be recruited in accordance with ADB's Guidelines on the Use of Consuttants. The TA is estimated to cost $589,000 equivalent, of ‘which $365,600 is the foreign exchange cost and $223,400 equivalent the local currency cost. ADB wil provide $365,600 to finance foreign exchange costs, and $134,400 equivalent for local currency costs, on a grant basis from the ADB-funded TA program. This will cover consulting services, training, and equipment. The remaining local currency costs will be met by the Goverment, through the provision of office space and faiities, and counterpart staf. D. Project Framework 3. The Project Framework is attached at the end of this Section (Attachment 1). E. __ Project Performance Report (PPR) 4. The PPR is a reporting tool being used by the ADB in monitoring both the financial and implementation progress of the Project during the course of the Project. This Report should be updated regularly. A copy of the PPR is attached at the end of this Section (Attachment 2).PROJECT FRAMEWORK Design Summary Performance Indleators/Targets Monitoring Mechanism Assumptions and Risks Goal ro Income and employment generation in the mioro to small enterprise (MSE) sector, particularly targeting vulnerable {groups and the rural sector Minimum of 700 direct income: ‘and employment opportunities created through the microfinance scheme ‘Minimum of 700 direct income ‘and employment opportunities created through the loans Survey to be conducted National accounts statistics General economic and policy climate conducive to business ‘growth will continue to exist Objective and Purpose © Keats = MSE growih through Improved availabilly of financial and Nnonfinanciel business development services Minimum 250 new microenterprises started through the microfinance facility Minimum 180 new MSEs started through the guarantee scheme Minimum of 400 existing enterprises diversify through the guarantee scheme Minimum of 250 business will benefit and 500 jobs will be created as @ result of the venture capital fund (VCF) activities Project monitoring and ‘evaluation questionnaires Review missions General economic and policy climate conducive to business. ‘growth will continue to exist ‘Outputs. 4. Expand small loans guarantee ‘scheme ~ Improved access to capital cost ‘and working capital financing by Project reports Quarterly reports of Small ‘SBEC will be adequately resourced through the Small LauauupenyDesign Summary _ Performance indicators/Targets, Monitoring Mechanism Assumptions and Risks MSEs 10 180 start-up enterprises resulting in 640 new positions being created Guarantees totaling ST2.4 tmilion issued by end of year 5 to 400 existing “tier one’ businesses resulling in 130 new positions being created Guarantees (olaling ST0.4 million issued by end of year 5 to 12 “second tier" existing businesses resulting In the ‘creation of 60 new positions. Business Enterprise Centre {SBEC) to the project steering ‘committee (PSC) Review missions Business Development Fun (SBDF) to monitor, train, andl advise clients. ‘SBEC will have a focused ‘approach, placing increased ‘emphasis on the creation of new employment opportunities rather than on (raining per se Establish a pliot microfinance ‘scheme ~ New microfinance product {targeting mlcroenterprises through ‘ligibie participating organizations: {g established within Development Bank of Samoa (DBS) Improved savings mobilization ‘among micro-enterprise entrepreneurs Minimum 60 new mlero- finance loans averaging '$T3,000 each ie Issued by ‘end of year 3, resulting in 50 new enterprises being created with 150 direct beneficiaries obtaining increased income ‘earning potential Minimum total of 250 micro- fend of year 4 resting in 260 new microenterprises with 760 direct beneficiaries obtaining increased income earning potential Minimum 260 members of participating organizations have regular savings averaging ST50 each by end Reports of DBS and WIBF to Psc Project reports Review Missions DBS staff is trained in microfinance Participating organizations will be adequately resourced through the SBDF to promote the microfinance scheme, and provide training and advisory ‘support to microentrepreneurs ‘There Is an effective demand for savings productsDosign Summary Performance Indicators/Targets Monitoring Mechanism Assumptions and Risks = ‘Transfer of toans portfolio to participating organizationg meeting performance measures agreed to In the memorandum of understanding (MOU) ‘of year 4 Minimum of two participating ‘organizations recelve funds from DBS for retail onlending ‘Atleast two participating ‘organizations exist that would meet eligibility criteria 3._Small Business Davelopment Fund ‘The SBDF is established end functions 'SBEC provides regular toan monitoring end business ‘advice support on %4 basis to a fotal of 180 new start-up years of the Project SBEC delivers training to an average of 200 persons per annum Women in Busine: reguler loan monitoring, technical and social training ona % basis to at least 50 new loan clients per annum = Project quarterly reports = Audit reports = Review missions ‘There Is an effective demand for business advisory services 4. Policy and Infrastructure Development = Regulatory environment for small business Is improved = Use of chattels by the banks is Increased = _ Enforcement of securily is New company taw is promulgated Updated chattels registry ‘Streamlined court procedures = Project reports = TAcconsuitants report = Copies of iegistation and proceedings of the working ‘group meeting ~ Review missions There Ie sufficient political wit to Implement the proposed legal and regulatory changesDesign Summary Performance Indicators/Targets Monitoring Mechanism. Assumptions and Risks improved ~ Credit checks are faciitated ~ Economic use of the customary land is improved Tor debt recovery New credit reference faciity established in private sector Working group on customary land issues is established and legislative amendments promulgated as necessary ‘There Is sufficient interest ‘among financial institutions to parlicipate in the facility Resistance to changes related to the economic use of ‘customary land 3. Establish the Samoa venture capital fund ~ Access to venture capital Is improved VCF Is established and functioning VF reports Review missions ‘Thare Is an effective demand {for venture capital financing of return may prove fo be unattractive for the potential investors in the VCF Experience in venture financing is limited Cost of running VCF may be igh ‘Activities/inputs Expanded small loans guarantee ‘scheme - Finalize MOU between PSC and SBEC on terme and conditions - Amend MOUs between SBEC and participating financial institutions to reflect two-tiered guarantee facilly ~ Recapltalize the SBEC small loans MOUs finalized by end 2nd quarter year 1 Technical assistance for felded, report to PSC and SBEC, ‘modifications completed and Implemented by end of year 1 Project reports Quarterly reports of SBEC to PSC Review missions: ‘SBEC will provide training to ‘average 200 persons per year converting into 100 new foan lens ‘SBEC will aggressively new clients ‘South Pacific Project Facilly KkDesign Summary Performance Indleators/Targets Monitoring Mechanism. Assumptions and Risks _ ‘guarantee scheme Recruit staff Improve database end complete training 5 Promote the Small Business Loans Guarantee Scheme (SBLGS) Defaults on loan limited fo 10 percent {SPPF) will provide support for feasibility studies for larger scale projects Staff attrition might reduce SBEC's effectiveness to adequately monitor . Establishment of anew microfinance factity for microenterprise Finalize MOUs betwaen PSC, DBS, and participating ‘organizations for terms and conditions of the scheme Finalize operational systems and procedures between DBS and WIBF Install databases and complete ining participating organizations promote microfinance product with loan ‘amounts between ST1,000- 875,000 ‘Commence coaching of new ‘members in savings mobilization Revlew of loans portfolio performance by DBS, participating organization, and PSC Transfer of loans portfolio to participating organizations MOU between CBS and DBS, documented and signed by 2nd quarter, year 1 1 eligible participating ‘organization signs MOU and 's participating In scheme by end of year 1 2 eligible participating ‘organization sign MOU and re parlicipaling In scheme by end of year 4 TA Is flelded, report submitted to PSC/participating ‘organizations by 3rd quarter year 1 Databases installed and operational by 4th quarter year 4 1,000 new leaffts designed, printed and distributed by end of year 1 ‘Two participating organizations receive funds from DBS for retail onlending =~ Reports of DBS and WIBF to | Psc ~ MOU8 betwen DBS and participating organizations = Signed MOU between PSC, DBS, and participating organizations Project reports Report of TA to PSC parlicipating organizations will aggressively promote scheme Loan dafaulls limited to 10 parcent by value over life of project Improved availabilty of microfinance will act as an ‘added incentive to increase the umber of savers and the level of savings achieved by WIBF clients ‘Commitment by the participating organizations to ‘aseiat in the management of the loan portfolio to minimize defaults ‘SBF Finalize the MOU Establish subcommities ‘Annual funding of the principle 2 medium-term work plans of SBEC and WIBF approved, funded, and commence delivery by 4th quarter, year 4 = Project quarterly reports Business development servic (808s) will have the capacity 10 prepare and submit proposalsDesign Summary. Performance Indicators/Targets Monitoring Mechanism ‘Assumptions and Risks Finalize eligibilly criteria for participating organizations Promote the SBDF Establish monitoring systems Project management unit (PMU) to negotiate contracts wilh successful ‘epplicants PMU allocates funds quarterly Monitor the performance of the BDS provides PMU designs, documents, id installs monitoring systems by end 3rd quarter year 1 MOU between PSC and ‘government agencies finalized by PMU by end 3rd quarter year 1 Policy and infrastructure development ‘Systems TA to design and ‘establish chattels database TA to review and recommend changes to streamline court procedures and jurisdictions TAto establish credit reference fecilly Define parameters in consultation with PFs, ‘TA lelded, report recelved by PSC and recommendations: Implemented by 2nd quarter ided, report recelved by PSC, end policies and legislation changes ar Implemented by 4th quarter, year 2 TAls fielded, report submitted to PSC by {st quarter, year 3 Legislation, f needed, Is enacted by 2nd quarter, year 3 Now credit reference fecity (first stage) Is completed and implemented smoothly by Srd ‘quarter, year 3 Project report Review missions Project quarterly reports Report of the TA to the PSC Project reports Report of TA to PSC Banks will have increased he revised. registry fepariment will be adequately resourced to manage cheitels registry Streamlining the court procedures will result in lower debt recovery costs for banks PFs see value in sharing Information needed for the faciily to operate correctly Potentlal conflict between bank and client privacy requirements eddyDesign Summary Performance Indicators/Targets Monitoring Mechanism. Assumptions and Risk: Establish working group on customary land issues TA on customary land legislation ‘and valualion Recommend revistons to existing legislation and draft new legislation Recommend revisions to existing registration proceduras for ‘customary land leases Develop a system of valuation that 's recognized by the PFis Promote use of customary land TAs are fielded, report received by PSC by 3rd quarter year 3 Review Is completed by end of year 3 Logistation Is amended by the ‘end of the Project Report of the TA to the PSC Project reports. Land leases are accepted as securily among financial Institutions ‘Samoa Venture Capital Fund Finalize eiipressions of interest by ‘ADB and others to invest in the fund Establish iegal entity of the VOF ‘ADB invests in fund VCF promoted MOU finalized by end 2nd quarter year 1 ADB investment of $400,000 by end 3rd querter yeer 1 Shareholders commit $1.6 inion share capital, and Injocts $480,000 at beginning Of first year of VCF for seed capital Project reports Reports of the VCF Review missions Investors will place more ‘emphasis on the economic rationale for investing Willingness of existing financial Inatitutions to provide complementary financing facliliosAttachment 2 SERALNO 30 PROJECT PERFORMANCE REPORT ie ee sact Dec ater DEPARTMENT OPO PROJECTNO 30167 (ALL AMOUNTS IN USS MILLION) LOAN STATUS _:ACTIVE ‘&. BASIC DATA TAS! GRRE Project Classification NAME PROJECT AT RISK No No Pro-poor Growes 41785: SMALL BUSINESS DEVELOPMENT Devecament Objectives (00) :S s eee PROJECT Imolementabon Progress (IP): 3 peonpen Potental Problem (PP) No No Overide : No ——cosnc—_pyvsicn. ELIPSED—PROVECT_ REVIEW LOANNOIS). APPROVAL SIGNING EFFECTWITY ORIGNAL REVSED ACTUAL COMPLETION LOANPEROD PROGRESS MISSIONS: STOSSAMSF) Norco” OpMaroT OemON STAWBOS ORG: Aig0s ORG. HK gq LASTOL-OR 00: Rev Rev. ox SETURL DAYS: (stamens) Nex: Plamen oAYS EXECUTING Treasury Department AGENCIES: 1B FINANCING PLAN FOREX —LOCAL_—«=«“TOTAL.«_COLMTERDART_— CURRENTVALUE OF BALANCE ‘rouse cost 3500 “Oat ‘Sate PUNDGADEGUATE BANK LOWN IAVALABLE FOR ‘ee APPROVED see COMMITMENT i sae . LOAN UTILIZATION - ‘CUMULATIVE CONTRACT awafing ——— 2001 CONTRACT AWARDS. ‘308 OTHERS. CMMRATIVE 0 20 3g TOTAL eon om ‘ome CONTRACTS TO PRO) 090 00m) 0m) oan “Ome cee be ow NETBAWLOAWS: ACTUAL apo c.000 000 aon 0m Poor oa, o CUMLATIVE DISBURSEMENTS 20: DISBURSEMENTS ‘AD OTHERS CUMAATIE 0 ad ad TOT, om a ‘a00 | SSSURSEMENTS rou 00m 0m 0380 om OO een be} am TONETeANK ACTUAL Goo0 O00 00D geo ON Est be, LOANS ON, D. COVENANTS: COMPLIANCE AUOTEDFROJECT CORPORATE FINANCHL, SECTOR ENVIROMENTAL SOCAL _RANCAL ECONOMIC. wine ACCOUNTS /OG:AY “STATEMENTS DELAY COVENANTS “COVENANTS COVENANTS COVENANTS. COVENANTS Covenants: ““'Sromae Ne mos. s Net ete : s : . MAJOR ISSUES/PROBLEMS (P, DO, Covenants) PROBLEMS) ACTION TAKEN/PROPOSED. j WINFRIED WICKLEIN Private Sector Devecoment Specialist PROJECT OFFICER Ma, Antonieta S. Salvador ‘Assistant Project Admanisraton Analyst “PAU Assistant 119-han Deatrert re Raper iPONG: *785:5AMSF) DEVELOPMENT OBJECTIVES Long Term Develooment Objectives Describton [To nts to ncome and emBlymnT generation ne micro Wo sal ertpTse SOCr Immediate Development Objectives. Descration jth quantifiable /montorable Barges) rang S750) Tasessment of Curent Satis [7 NSE grow Brcugh mnproved avalabity of aca and ‘enthancial business develooment services, minimum 250 new micoenterpises tough {he mierofnancefacity + minimum 180 new MSEs started tough the ‘guaran scheme + minimum 400 exsing enterprises diversity ‘trough te guarantee scheme + minamuan 250 business wil Benefit and 50 oes {ested a result of venture capa fund actos [Toe ansensed te Key Assumptions/Risks ang | “Rasecemont of Curent Stas ors.s.P5.y | (AseumBtOne! T Geral ean ODay amas SAGER Dai |S __*TEDe SRE growth wil continue to exist ‘Overall Rating ‘S| NOTE: Gveral Rating is based oniy on Assumptions ‘and Risks until project completion. . ‘Thereater, Immediate DO assessment wil be included Development (Date: 31/12/2001) implementation yi str. Problems wth 00. time input for COPF Builshg [Traning — |Partcnaioy — [Project NanagerPraed Oca [incorporated Lessons awa ICompenent [Component [Process fprorio Laan appro lves bes Ives IePOHG: 785 SAM(SF) IMPLEMENTATION PROGRESS Project Outputs Ti PROJECT OUTPUTS (Componentisubcomponent=] ‘Daserioiion (wih quantifablamonitorabe targets) ‘Assessment of Progress 16 ate [Exgana smal loans gureniee seme | Guarantees totaling ST! sgued by ond of year Sto 180 startup enterprises resulting i 540 new postions being rated |- Guaranses toring ST2.4 millon issued by end of year 5 +400 exstng “ber one” businesses resulting in 130 new postions being created |- Guarenises ttaling STO.$ mlion issued by end of yar Sto 12° ‘second ter existing businesses resuting inthe creation of 60 new positions. abe aeased lar [Establish a plot mcronancs scheme |- Misimum 80 new mio-france icans averaging ST3.000 each is issued by end of yar 3, rocutig in 50 new enterprises bomng creatod with 150 rec beneicanes obtaining increased income earning potential | Misi total of 250 mcrosinance loans averaging ST3,000, ‘each i issued by end of yar 4, resuting in 250 new Iieenterpiees wth 780 direct benefice: cbtaning increased income eaing potent | Minimum 250 members of partcpating organizations nave ragiar Savings averaging ST5O each by end of year 4 |-Mrimum of wo parcpating organizations receive funds rom BS for retal olending ob aaseated [Sal Business Deemer Fine |- SBEC provides reguar loan monitoring and busines acice ‘Support on basis to a total of 180 new star-up businesses, ‘and 404 existing businesses Gung te ve years ofthe Project [+ SBEC detvers taining to an average of 200 persons per |- Women in Business Foundaton (WIBF) proves regular lan ‘monitoring, echnical and socal waning on 2 ass to at east £0 new ian clents per annur be BEST [Poly and inrastucure Deveiooment |- New company law is promulgated | Updated chats rgisny |- Steamined cour procedures fr debt recovery |- New credit reference facity established in private sector ‘Werking group on customary and issues is established and legisiatve amendments promulgated as necessary Toe assessed ie ‘Key Aseamptiona Risks (not Output) Fasessmont of Current Status [SBEC wil be adequately resourced trough the Small Busse [Develogment Fund (SBDF) © moni, tan, and ade cients. |SBEC wil have a focused appraach, placing increased emphasis lon the ereaton of new employment oppernies rather than on per se oe Based et 5 stats waned micOMTaTCS [Partcsating organizations wil be adequately resourced tough line SEO to promote te miconance scheme, and prove {raining and acvsory supporto micoentrepreneurs [There is an effective demand for savings product: {at east wo paripaing organizations exis that woul meet leibity criteria oe aasasaea rei an effecive Garand fr Dass BOBO SOR To be aasesaes erPOH: 1788 SAWSF) (There suMiCene oltcaT wal © mBTIER We reno aT land requatoy changes There is sufficient intrest among francial nsutons lparcnaten the fcity lang Resistance wo changes ata he economic use of tory | [Fo oe ascases mie | | | [Theres an ofocive Gersand Tor venture cap Wan [Rates of retum may prove tobe unatractve for he potential Investors in the VCF |Exoenence in vente Bnancing i mites ICostofrnning VCE may be igh [Tobe assesses ar Fisrnew Renan j [Smal{busmness development fund, S000 00 [PMUlConsuling Senices, $650,000, [Equipment and Vehies, $94,000, [Piggyeacked TA fo Capaciy Bung of Prana and BUBesS lAgsory Itermedlais, $500,000 [Samoa Venture Cantal Fund, investment of SH00000 Implementation Progress, [RENE TAT CSRS ROSIERTH SES AT Rag Crea ls Project implementation [2 Change in Project Scape [5 Change in implementation Arangariens I. Courtarpar FninglCoRTanene T [&- Prost Costs | T [Major Covenants (exsude #7 below) 7-Auchiad Project Accouns and Corporaie Financial Statements ‘Overal Rang Design Changes None Recent Development (Date: 3112/2001) [Special Account has been estabisned. 'PMU Project Manager has been selected and PMUbeing etabishe. ‘Inception Missin is tntatvly scheduled in Februanarch 2002, Problems with IP Snare = == =Action rakenlPropesed. TonePOMC: 1785-SAM(S#) Rating Criteria for the Assessment of Implementation Progress Date of Change(DD-MM-YYYY): 31/12/2001 Project: 33167 - SMALL BUSINESS DEVELOPMENT PROJECT Loan Number: 1785-SAM(SF) Department: OPO Division: POHQ Approval Date: 21/11/2000 Signing Date: 06/03/2001 Effectivty Date: 08/06/2001 Original Closing Date: 31/08/2006 PROJECT LOANS 1. Project Implementation: 3 months delay |< 20% delay 2- Satisfactory =| 2 Change in Project Soe ue 2 Saisacy mone pening Leer ee Qa Cts Change hinploeriaion Aron 2 Satay mone eran |4. Project Costs 3- Highly Satisfactory No shortat 3- Highly Satisfactory [6. Major Covenants, 2 Satisfactory 7. Audited Project Account / Corporate Financial 2 Satisfactory Statements: Overall Project implementation Rounded: 2 Satisfactory Note: This is for recording purposes only and does not affect in any way the overall IP Rating Project Progress: 0% New IP Rati SnesPOHC: 1785.SAMSF) POTENTIAL PROBLEM PROJEC' Fag ea ] ang Crore oe Romans 7 Fea inpaTaTOA DeRTE Te Ts Poot Camplancr wh Crean [este ies i T Easiest, Sas. nd Oporaing PPI [toes lcar 7. Fag of Consus (shoei | 5 Sharage of Coiriat RTCA no | } 6. Cost Overun No] RS 7. Poor Campane i aed Papa Aes and [No] 5 Corporate Parca Steer 3 Enwronmena Soe rors eae TA TET OS Yes | “80a asa 0: Rie Sera Cony wet SY PT ne | [Problems | 71. Project Fielded Missions yes ij 0 a Coe a te Thee ] New PP Date of Seneca StS)POH: 1785.SAMSF) COVENANTS: Project nd A Aesouns al C= aaa] SST EA Fred | FY_| AtwFY | Due Receved Detwyed | YIN |Comokance | [Submission of Audited Accounts (APA): Frey Ose ae Lom |e] sam a a [Submission of Corporate Financal Sutemeris CFS}. Nor Required Remark: Project Specie Covenants “The Borrower shall, by no later than 31 December 2000, cause 3 dail to repace the ‘eueting Companies Ac 1055 to be submited 1 Cabinet, such Blo incorporate he ‘ecommendabens fr reform outings in the UNDP-cemissoned report Local and Regulatory Reform for the Corporate Seco, dated October 1999, with a view io having ‘aid draft Bl enacted by no later than 30 vue 2001, ongoing 8. Proec-opoafe | Dats] Dats | Delays | Saius of | — ang omnis ‘covenants Due _| Complied_| mo) | Compliance | (875.0) [Sector 3 F Company Caw ton [2 Cand Caw Reto ‘The Borrower shal by no late han 30 une 200%, constite a Working Group charged wih responsiblity Yor fomulaing @ pict scheme ame a feing up custemary land for ‘Commercial actives ina designate area or areas. The Working Group shal be chaired Dy te Secretary ofthe Deparment of Land, Surveys and Endrcnment or hisher nominee and include representatives of TD, the Department of Lands and Tiles, the Ofice of the ‘Atomey General, OTC, the Internal Afais Department, and those merbers of the legal profession pracsing in the prvate sect (Be representative of he air i be nominate by he President of the Law Soci) Promplty upon establishment ofthe proposed Law Commission, the Borower shal cause sald Law Commision fo undertake 2 comprehensive review of the aw relating fo and, Intuding but not necessary ited tothe various legal impediments preventing the ‘moverentof and, partcularly customary tnd, higher valve economic uses deri in the aforsentoned 1909 UNDP-comeicsioned report Upon completion of te review, the Borower shall ensure thatthe Law Commission’ cigs and recarmendatons are ‘widely disseminated on a natonvie bass, parca at vilage level. wh a view to having {any legislative changes recammende bythe review enaced at an eat is. NotYetDue' [5 Secles over Personal Proper “The Borrower shal by no late han 31 December 2001, caus anew sym of rgistain ‘in respec f moor voices be ngocuced whereby socatly nies nrlaton to mete ‘vehicles shal thenceforth be registered ona computerised register. Te law relating to secured transaésons genealy shal aso be overtaued prior ots cat. NotYotOue = [Environmental Not Yet Due F-Envrenmerialmoniovng sai be under tw gaance ofthe PMU. On befall of he Project Executing Agency. the PMU shal ensure atthe various Project mplementing ‘agencies and partipaing organizations and parscpatng fnancialisttusons compiy wit, all applicable environmental las and repuations in conecton wih al Projec-eated activites funded or guaranteed ct ofthe proceeds of he Loa. Not Yet Due [FinanciaPOH: 1785 SAM(SF) [7 The Borrower sal prowde sascuste buapel, saving wih he 2007 Baal Be] ‘Borower's conibuton tothe Prec. | { Complies ___s |The Borrower ether ough secung he enncon oT etsing outs appar Te | ‘uront operational costs of ne SBC or rough secanng atative franca backing aczeplb0 the Bank, shall ensure adequate uray for Te SBEC's operations | | toughout he tie of te Project | ongoing st (Sikes s 7 Established, Seed, and Operaing PUI ‘7D, prompity ater the EfecSve Dato, shal constitute a Project Sterng Commitee (PSC), ‘The Fnancal Secretary othe Fnancal Secrtary’s nominee shall acta chaxperson ot the PSC. The PSC's foundation members shal be the members of he aicory OUD set Up during the fomusation of the Project. and shal comprise representatives fram TO, OTCI. (CBS, DBS, ie SBEC, WIBF, SCL SMEA, and the vee commercial hanks curenty ‘operating in Samoa vi. ANZ Bank (Samoa) Lis, Pace Commercial Bank i, and ‘atonal Banko Samoa. The PSC shall mest leat ence every tree nhs a shall be responsible for he overal direction o the Project and fr providing pudance tote Project Management Unit (PMU) parkeuiaty egacing coernaton of actvtes between the various Project implementing agencies. ‘TD shal rove writen notice tote Bank of he fll compasiton ofthe PSC wthin 30 days of he Efectve Date. | ‘TD, prompt ater the Efecive Date, shall estabish a Project Management Unit PMU) 10 be response for day-to-day execution ofthe Project and for corsnating the igus ofthe ‘various mplemening agencses. The PMU shall aso provi secretarat tnctons fore PSC and any sub-carmiiees established by the PSC. Ongoing 8 [2 Fling of Consatans “TD shall use ts best endeavors to ensure hat he PMU manager, © be engaged in accortance with he provisions of Schedule 5 to this Loan Agreement, si place within one ‘month of te Efectve Date ongoing s [5 implemniion Arangarens PART A: Small Business Loan Guarantee Scheme Promoty aftr the Efectve Date tbe SBEC shall enter into the memoranda of win fe partpating fancialinftubons refered In paragraph 8(a)(X) of Scneduie 3ofLA. PART B: Small Business Development Fund Prompty str the Etectve Date, the PSC shal estabisha three-member sub-conmitioe ‘comprising representatives of TD, DTC! and OBS for overseeing the SBOF established Lunder Part B ofthe Project. The sub-commite shal comprise three merbers fom within ‘he PSC win no potntal conic of interest reparng he operaton of he SBDF. “The PSC sub-committee and te PMU shall cause the SBEC and WIBF to subtly costed meciu-term worklans win three mons of the Eecve Dat, detalng he Proposed expanded range of senicas i be proved, win ful breakdown ofthe costs, Periormance measures and vertabe indicat: associated wh the devery of hose PART C: Plot Meroinance Facity ‘The Bortower shall cause DBS to provide appreisal suppor taining to any partpating corgantaton at ecames involved the mecrotnance faci. PART D: Poly and Legislative Reform s “The implementing agency fr the new ced reference facty i expected bbe an Independent agency i be established by interesiad comercial banks; hat event the Borrower shaf use is best efforts ofacitate he estabishment of such a cred reference ‘acy witun the phate sector by the commencement year Bree of te Proect.ongoing s OHO: 1785-SAMSF) "Project Parormance WenionnS “TD, trough he PMU ane win six mons ofthe Efecve Dae, shall esabish a oroject, ‘menitoang and evaluaton system, based on Denchmans and cscs tbe agreed math the Bank NotYetDue = 1 eater Review ‘The Borrower and the Bank shall cry outa comprehensive midterm revew of the Project i ‘atthe end ofthe second year ofthe Projet. Not Yet Due = ‘Sverall Rating = Probloms/Remarke/ssues with Covenants [NoneI. PROJECT DESCRIPTION ‘A. Objectives and Scope 3. Consistent with the Govemment's strategic objectives, the Project goal will be income and employment generation in the MSE sector. The Project will have two parallel, but integrated objectives: (i) micro- and small enterprise growth through improved availability of financial services. and (i) micro- and small enterprise growth through improved access to business development support services. While facilitating and diversifying financial intermediation in Samoa, the Project will also seek to address. systematic legal and policy issues related to faster market development, especially, land market. B. _Outputs/Components 4. Small Business Loans Guarantee Scheme (SBLGS) 4. SBLGS would continue to be administered by SBEC and will be open to three commercial banks currently operating in Samoa and DBS. The guarantee would provide partial guarantee cover on the principal sum oniy, for approved. commercially viable ventures. Borrowers would be expected to meet all other normal bank lending criteria. The SBLGS will be available to both clients of SBEC and any other participating organization. Banks will be encouraged to co-promote the scheme through their own client base, and to refer clients to the SBLGS for consideration. The proposed scheme has a loan range from ST20,000-50,000 per guarantee (80 percent of principal) over a period commensurate with the term of the loan, but not exceeding five years. The guarantee will be conditional on the payment of an application fee payable by the applicant on the sum guaranteed. The application fee will be determined by the Director of SBEC after consulting the PSC. The guarantee fund, which totais $1.5 million of which $1.1 million is financed through ADB loan will be owned by the Government. Interests occurred on the principal will be used to offset any defaults. 2. Microfinance 4. _ CBS will set up a Revolving Fund facility and contract its management to DBS. The Facilty's borrowing cost is estimated at 6.5% in Samoan Tala. During the first two years of experimental period, DBS will borrow from the Facility and finance the approved projects, which had been prepared by WIBF and/or other POs. The lending rate charged to end beneficiaries is expected to range from 18-20 percent per annum. WIBF and other POs will get a flat commission fee of 5 percent of the principal for their active involvement (project _identifying/advising, screening, appraising, and monitoring services), while DBS will assume the credit risks of the microfinance portfolio. At the end of experimental period, based on the Project's review mission conclusion as well as the result of the Pilot program, the option of transfer the microfinance portfolio from DBS to WIBF and/or other POs will be decided. 5. POs will be assessed by the DBS and training and capacity building program will be agreed to between the DBS and the PO. Upon the completion of these training activites, the PO will have the capacity, systems and skills necessary to directly identify ‘and manage a microfinance portfolio. The proposed training program will be submitted to a sub-committee of the PSC for consideration for funding and utilising SBDF. Opportunities to include other community-based institutions, will be further explored7 during the first two years of experimental period. The POs should meet the following ‘minimum criteria: (Savings: The PO's savings mobilization scheme currently operating and its cient base is growing at least 10% per year, with is client's average saving account balance is not less than ST5O. (i) Mafiagement: The PO must have a sound. history of managing microfinance loans, savings products and be subject to annual external audits. At least one of Management officer should have trained/retrained in DBS training programs under the SBDF. Key project and business advisors must have been trained and accredited in the DBS program. i) — Geographic Area: The PO must have a potential coverage nationwide, rural and urban areas and it should be reflected in its business /strategic plan. (iv) Purpose: The PO must have an express purpose of assisting in the development of micro- and small enterprises, and must be capable of providing follow-up, monitoring and support activities. Loans must therefore specifically focus on enterprises’ productive development, rather than consumption. (V) . Accreditation: The PO must satisfy the DBS with regards to systems, management capacity, apply detailed operational procedures for loan application processing, monitoring and supervision. (vi) Loan: The microfinance faciity approve loans up to ST5,000, with a typical loan being in the ST1,000-2,000 range for an average period up to 3 years. (vil) Performance: The PO should target to have operational sustainability ‘during the first three years of is operations and reach financial ‘sustainability in year seven. 3. Small Business Development Fund (SBDF - Advisory Services) 6. ___The Project proposes the establishment of a Small Business Development Fund (SDF), with the fund held by the Government, and invested in investment instruments. ‘The Fund will be used to provide necessary advisory and training services for all POs. Management of the fund will be through a sub-committee of the PSC, comptising ‘Treasury, DTCI and DBS, being the members of the PSC who have no potential conflict of interest. A Memorandum of Understanding with each accredited participating organization (the first of which are expected to be the SBEC and WIBF) would gover the fund. The capital of the fund would be replenished on an annual basis throughout the five-year life of the project. The purpose of the SBDF is to provide a secure source of funding to expand the capacity of NGO business development service (BDS) providers to deliver business training, advice and monitoring in response to the needs of the MSE sector. 7. The following indicative benchmarks could be used to determine accreditation: (i) proven track record of professional competency in the delivery of enterpreneuiral training and support, (i) professional or academic qualffcations of staff, and (ii) ability or8 willingness to bear 10% of the delivery cost either through their own resources or by a levy on the client base. The SBDF will be a link to the activities of the microfinance facility and the loans guarantee scheme. The involved organizations will use the fund to identify opportunities, develop programs targeting the client base in particular for training, advice, and loan monitoring support. 4, Policy and infrastructure Development 8. The main activities inciude (i) evaluation, review, and recommendation on policy changes for the small business sector, (i) promulgation of amended iegisiation with regards to registration procedures for customary lands leases and chattel mortgages, and (ii) introduction of the upgraded chattels registry and a new credit reference scheme, C. Equity Investment in the Samoa Venture Capital Fund 9. Preparatory work to define the modalities of such a fund has been done by 'SPPF. The total size of the proposed Venture Capital Fund (VCF) is currently tagged at ‘$1.6 million. ADB has been invited to contribute $400,000 or 25 percent of the Fund. Other proposed shareholders include Intemational Finance Corporation (IFC), ANZ, DBS and NPF. The VCF will be set up as a company. VCF investments are likely to be primarily in established businesses. The target market for the VCF is venture capital investments in the amount range of less than $100,000 (ST300,000). Recommended limits are ST50,000-ST250,000 with an upper limit of 0 percent of the total equity {including the VCF contribution) for existing businesses and 40 percent for new ventures. Project size is therefore expected to range from roughly ST200,000- ‘ST1,200,000 with between 70/80 percent likely to be expansionidiversification projects. ‘The investment focus would be on projects that contributed to economic growth and, in particular, eamed or saved foreign exchange. With VCF investments likely to be primarily in established businesses, projected loan losses should be significantly less than might be the case with mainly seed capital or true venture investments. However, for the purpose of the model, a very conservative 25 percent loan loss provision has been allowed for the outstanding portfolio. The proposal is for the VCF to invest $240,000 (ST898,000) annually for seven years, using total funding of $1,600,000 (ST5,87,000) from shareholders plus retained earings.I, IMPLEMENTATION ARRANGEMENTS A. Executing/impiementing Agen 5. The Treasury Department will be the Executing Agency and shall have overall responsibilty for the carrying out of all parts of the Project. 6, The SBEC will be the Implementing Agency (IA) for the expanded SBLGS with the participating organizations being the three commercial banks, plus DBS. 7. _ The subcommitee under PSC will directly managed the SBDF. The POs using the fund should submit their proposal including the scale of the intended training programs and curricula for MSEs, outreach and impact of the program, cost effectiveness analysis of the training programs and thei sustainability. The IAs to provide business advice, monitoring and training components funded by the SBOF, will be accredited POs, intially identified as SBEC and WIBF. The POs that intend to use the fund should submit their proposals including the scale of the intended training programs and curricula for MSEs, outreach (urban and rural) and impact (direct and indirect, income and employment generation) of the program , cost effectiveness analysis of the training programs, and their sustainabilty 8. The DBS will be IA for the onlending under the pilot microfinance component. WIBF will be the initial PO for the microfinance component. The revolving fund will be available for DBS at a lending rate of 6.5 percent. The proposal of terms and conditions for funding applications will be stipuiated in a memorandum of understanding signed by CBS and DBS. 9. Policy implementation will be enacted through TD with support from DTC, the DOJ and the OAG. The IA for upgrading of the chattels regisiries shall be the Department of Justice. The 1A for the new credit reference facility will be an independent agency to be established by interested commercial banks. B. Project Steering Committee 10. A Project Steering Committee (PSC) will be established at project start-up, with the Financial Secretary or nominee as chairperson. The PSC’s foundation members will be members of advisory group set up during formulation of the Project, and will comprise representatives from TD, DTCI, CBS, DBS, SBEC, WIBF, SCCI, SMEA, ANZ, PCB and NBS. The PSC shall be responsible for the overall direction of the Project. 11. The PSC will establish a three-member subcommittee to oversee the SBOF. The ‘subcommittee shall comprise representatives of TD, DTC! and DBS.10 ©. Project Management Unit 12. A Project Management Unit (PMU), headed by a PMU Manager, will be established. The PMU will be responsible for the day-to-day execution of the Project, administration and financial reporting, coordinating activities between the various IAS and providing secretariat functions for the PSC and its subcommittees. D. Project implementation Schedule 13. The Project will be implemented over five years starting March 2001. Project completion is expected in February 2006. The project implementation schedule is attached at the end of this Section (Attachment 3). An updated copy of the implementation schedule should be attached to the Project's quarterly progress report.PROJECT IMPLEMENTATION SCHEDULE Year Years ai Tez[asyar ar [ae | as [ar ai Polley and Infrastructure Development ‘i Polley and Legisiative TA to evaluate and review policy needs Revise policies and drafl new policies laaiu [oven | MSE functions integrated within DTC i A Challels Register ro “TA lo update chailels registry Establish database ‘TA review existing chailels legislation ‘Court Procedures, ‘TA to streamline courl procedures Credii Reference Facil Define paramelers for credit reference: Finalize MOU, : |_| ‘Draft appropriate legislation e Establish nallonal databa ‘Customary Land Lease. Review legislation end rogaralion me —| | TA to develop valuation systems ea institutional Strengthening — ‘Capability Enhancement ‘institutionalize processt Improve budgel and planning skis, ‘TAon database ‘Accreditation (raining Pilot Microfinance Facility Pilot Microfinance Facilly Finalize operational systems: [| TA 10 establish database: Recrull and tran staff — fe weUNDERYYear? Years Yoard eae Voor Onaeeee aa] ar [az | ar [aa [ar as | as par| ar] az | as yas | ai [a2 [as | a Eslablish revolving fund Microfinance operational Deed Br BET a TS 32_Savings Mobilization ‘Commence savings mobilization i z Tae RET 3.3 Microfinance Expansion Midlerm review Refine targeting and outreach Refine eligibility criteria Expand scheme G_— Guarantes Scheme ‘4.1__Improve Access fo Financs Finallze/amend MOUs Recrul staff Establish guarentee account in CB TA \o improve databa ‘Staff trainin ‘Expanded scheme operational ‘S_—Equlty in Venture Capital Facil '5.1_VCF Fecilly Established Coordinate MOU and EOI Establish legal entity ‘ADB invests in fund ‘VGF operational ‘Small Business Development Fund (6.1 Fund Established ‘Subcommittee appointed lalize SBDF annual Finalize eligiblly criteria Evaluate annual funding requests Establish monitoring systems 'BDS provides training elc; Evaluation of performance. 7. Project Management 7.1_Esleblish PMU Formalize PSC membershiYoart Your? Years Years ai] az | as ar} ar] a2] as] as] ar] a | aay ar] at @2 [as | aa ‘Appoint project management Establish PMU office Formalize hierdeot srangerients i Establish monliorng mecheniams ANS LI jase Project reviews PMU operational and reporting ee] ‘Coordinate project implementation sta. | 7Z_Project Monitoring Determine Information/data required ri ot Develop survey methodology ra Colect baseline dais Ica REG | Update dala annualy Y ma Data analyzed and disseminated a | Transfer responsibility to the DTC! et |” i Sl of area: DTClsdopartent of rade, commeres, and Tnduey. MiScmanagonent Tlornalon system MOU=merorendum of undaread scenic and sn ‘PJcprejocl maneperont uns P rate: SBOFenal bucnocs oveloperon nd: TAviocinical asastanes, ad YGe-venture copia fun tegen Project Milestones Project Activiti unt or Real" IV, COST ESTIMATES AND FINANCING PLAN A. Cost Estimates 14. The total cost of the Project is estimated at $4.464,000 equivalent (see Table 1). The total cost of the Project includes physical and price contingencies. The price contingency rate is at 6 percent of the base cost, while that of physical contingencies is 5 percent B. Financing Plan 15. The ADB will provide a loan of $3.5 million equivalent from the Special Funds resources, and an equity investment of $400,000 from ordinary capital resources. The loan will have a maturity of 32 years, including @ grace period of 8 years, and with an interest charge of 1.0 percent per annum during the grace period and 1.5 percent per annum thereafter. The Borrower will be the Independent State of Samoa. The Government, as 2 counterpart contribution, will finance the balance of $964,000 equivalent. A summary of cost estimates and financing plan is given in Table 1, with details given at the end of this Section (Attachment 4). Table 1: Summary of Project Costs, Equity Investment, and Financing Plan ($000) Component Government ADE Total 7 Projet Loan Policy and inrastucture 48.10 163.00 211.10 Smal Business Devt Fund 200.00 800.00 4,000.00 Credit Guarantee Scheme 400.00, 1,120.00 1,520.00 Microfinance Scheme 320.00 321.00 Projet Management 823.05 331.60 interest Charge 99.42 98,416.00 Subtotal es785 3,125.47 3,983.12 Price Contingency 2058 75.00 95.60 Physical Contingency 8577 209.52 385.29 ‘Subtotal forLoan (A) 96400 3,800.00 4,484.00 B. Equity investment 000 400.00 400.00 Total 9400 3:900.00 4,384.00 ‘ADE=Aaian Development Sank. Staff estimate.‘Attachment 4 Components Government ADB Tour Policy and Infrastructure, Institutional Strengthening 43,100 163,000 211,100 = DTCI Staff Contribution 2,100 ° 2100 ~ Database, Office for Chatels Registry 33,400 0 33,400 ~ Office Rental for Crecit Reference Facilty 12,600 0 12600 ~ Computer Systems 0 33,000 33,000 ~ MIS Intemational Consuitants © 190,000 130,000 ‘Small Business Development Fund 200,000 800,000 1,000,000 ‘Small Business Loan Guarantee Scheme 400,000 1,120,000 1,520,000 = Vehicle 0 20,000 20,000 + Guarantee Fund 400,000 1,100,000 1,500,000 3t Microfinance 4,000 320,000 321,000 ~ Revolving Fund © 300,000 300,000 = Vehicle 0 20,000 20,000 = Promotion Costs : 1,000 0 1,000 Project Management Unit 208,551 623,048. 831,600 ~ PMU Director and Manager 123,951 347,049 485,000 ~ International Consultants 0 420,000 120,000 ~ Vehicie and Office Supplies 5,000 72,000. 77,000 ~ Travel Expenses 85,000 20,000 75,000 ~ Review and Periodic PSC, PMU meetings 24,600 ‘0 24,600 = Auditing Requirements 0 50,000 50,000 Interest Charge ° 99416 99,446 Subtotal 857,651 3,125,465 3,983,116 Price Contingency 58,010 204,280 262.290 Physical Contingency 48,339 170255 218,504 Total for Loan 964,000 3,500,000 4,464,000 B. Equity Investment © 400,000 400,000 Total Cost 964,000 _3,900,000_ 4,864,000 ‘DTCT= department of trade, commerce, and industy, MIS = management information system. ‘Source: Staff estimates.Table A5.2a: Project's isbursement Scheme by Year ‘Components 2001 2002 2003 2004-2005 ‘Total Poicy, infrastructure, and Institutional Strengthening 84,100 38,500 65,800 14,300 11,300 211,100 ‘Small Business Development Fund 200,000 200,000 200,000 200,000 200,000 1,000,000 Small Business Loan Guarantee Scheme 320,000 300,000 300,000 300,000 300,000 1,520,000 Pilot Microfinance 321,000 ° ° 0 0 321,000 Project Management Unit 187,320 132,320 169,820 132,320 189820 831,600 Interest Charge 9432 14.459 20.278 24,988 30,261 99.416 Contingency 135,108 62.815 93,683 80.823 88,460 480,800 Venture Captal Fund 120,000 © 80,000 80,000 120,000 400,000 Total 1.376.961 768.194 949,573 829431 939,841 4,364,006 ‘Source: Staff estes, Table A5.2b: Asian Development Bank Disbursement Scheme by Year Components 0012002 2003 2004 2005 ‘Total Policy, Infrastructure, and Institutional Strengthening 77,000 31,500 54,500 ° © 163,000 ‘Small Business Development Fund +160,000 160,000 160,000 160,000 160,000 800,000 ‘Small Business Loan Guarantee Scheme 240,000 220,000 220,000 220,000 220,000 1,120,000 Pilot Microfinance 320,000 0 ° 0 © 320,000 Project Management Unit 146,210 91,210 147210 91,210 147,210 623,049 Interest Charge 9432 14459 20276 24.988 30.261 99.416 Contingency 114,128 61,957 72,118 $9,444 66,895 374,541 Venture Captal Fund 120,000 © 80,000 80,000 120,000 400,000 Total 4.486,768 579.126 754104 635,642 744,366 3,900,006 “Source: Stat esimates. ‘Table AS.2c: Goverment Disbursement Scheme by Year ‘Components 2001 200220032004 2005 _——‘Total Policy, Infastucture, and Institutional Stengthening _-7,100-«7,100 11,300 11,300 11,300 48,100 ‘Small Business Development Fund 40,000 40,000 40,000 40,000 40,000 200,000 ‘Small Business Loan Guarantee Scheme 80,000 80,000 80,000 80,000 80,000 400,000 Pilot Microfinance 1,000 ° ° ° © 1,000 Project Management Unit 41110 41,110 42.610 41,110 42,610 208,551 ‘Contingency 20.982 20,858 21,565 21,379 21,565 106.349 Total 190.192 189.068 195.475 193,789 195.475 _ 964,000 ‘Source: Staff estimates.12 V. CONSULTANTS A Inputs 18. A PMU manager will be engaged for the duration of the Project. systems specialist for 6 person-months, 2 small business development expert for up to 5 person- months, and auditors on an annual basis. Legal experts may be engaged as required to facilitate drafting of various agreements under the Project. All consultants to be financed out of the loan proceeds wil be engaged in accordance with ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB. The terms of reference are given at the end of this Section (Attachment 5) B. Recruitment Procedures 17. Recruitment of consutants will be undertaken in accordance with the Bank's Guidelines on Use of Consultants. The consultants shall be selected and engaged in accordance with the following procedures: (2) As soon as the biodata received have been evaluated but before negotiations are started with each individual selected for negotiations, the Bank shall be furnished with the relevant shortlist of candidates for each position with (i) the candidates’ biodata; (i) an evaluation report and ranking of the candidates; and (ii) a request for ADB approval to enter into negotiations with the firs-ranked candidate. {b) After the conclusion of negotiations but before the signing of each contract, the contract 2s negotiated shall be furnished to the Bank for approval (©) Promptly after each contract is signed, the Bank shall be furnished with 2 copy of the signed contract; and (4) ff any substantial amendment to any contract is proposed after its execution, the proposed changes shall be submitted to the Bank for orior approval.Attachment 5 ‘TERMS OF REFERENCE FOR CONSULTING SERVICES, A. Project Management Unit Manager 1. The manager of the Project Management Unit (PMU) will have extensive experience in the processing and implementation of financial services projects and adequate exposure to management of private sector micro and small enterprise (MSE) development projects. In particular, the PMU manager will be responsible for the following tasks: 2. Design of Project Monitoring System. Finalize reporting formats; highiighting variances and containing a separate and clear set of recommendations to the project steering committee (PSC). In particular, advise on procedures for including project beneficiaries in the collection of monitoring data and the project monitoring program. Provide recommendations for involving them in designing the annual plan of work and budget based on the project monitoring repos. 3. Project Baseline Survey. The manager will (design the format for'the project baseline survey taking into account household level financial services demand assessments and household field surveys conducted during the project preparatory technical assistance (TA); (i) _ organize the implementation of baseline survey and oversee drafting of report to the PSC; and ~ (ii) organize periodic reviews against the baseline to monitor the long-term impact of changes in policies and other project components on MSEs. Project Reports. The manager will complete the following (Prepare and submit to ADB through the Treasury Department, quarterly progress for the Project for the periods ending 31 March, 30\ June, 30 September, and 31 December each year no later than 30 days following the period ended. The reports wil be in a format acceptable to the Asian Development Bank and will include information on project implementation progress, implementation issues encountered and measures adopted for their resolution, and information on the status of compliance with loan covenants. The reports will include information on operation and performance of participating financial institutions (PFs) under the Project. (i) Submit all reports to ADB from consultants. (ii) Prepare and submit to the Cabinet Development Committee through the PSC, quarterly progress for the Project for the periods ending 31 March, 30 June, 30 ‘September, and 31 December each year. (iv) Identify and provide long-term monitoring and quarterly reporting on a random sample of seven subprojects assisted under this Project to measure the, ongoing benefits to the target group in the following specific areas: financial and operational performance of the subproject, direct and indirect employment creation; impact on the poor, women, and other vuinerable groups.‘Small Business Development Fund. The manager will @ (ii) (i) (iv) (v) promote the objectives and goal of the Small Business Development Fund (SBDF) to potential business development service (BDS) providers; collate, evaluate, and summarize submissions from BDS providers for funding consideration through the SBDF; based on the recommendations of the PSC, negotiate contracts with successful applicants, and agree on performance indicators for the subprojects; monitor the BDS providers in the performance of the contracts in accordance with indicators agreed to during contract negotiations; and administer the disbursement of funds to contractors. Project Administration. Responsibilities include fi) c) ii) tw) Ww) (vi) (vil) (viii) (oo) provide secretariat support to the PSC and its various subcommittees; design, document, install, and maintain administration and financial systems and procedures appropriate to the Project and in line with best practices; coordinate all aspects of project implementation through the implementing agencies (IAs); organize accreditation and core competency training for staff of BDS providers and the Development Bank of Samoa (DBS); provide monthly summarized accounts to the PSC; facilitate collaboration between IAs, PFis, and participating ogranizations associated with this Project with a view to minimizing programming duplici attend to all procurement requit the Project Administration Manual, in accordance with the procedures detailed in maintain an asset register of all capital items purchased, which will remain the property of the Project (in particular, vehicles); and administer the disbursement of funds to meet approved capital and operational costs of the Project. Institutional Strengthening. Responsibilities include aw wo) administer the various TAs required under the institutional strengthening ‘component of the Project, and ‘monitor the performance and delivery of TAs through various contractors.8 Loan Guarantee Scheme. As a member of the Credit Committee, undertake a commercial appraisal of foan guarantee applications where the guarantee is higher than $720,000. B. Systems and Information Specialist (3 person-months in year 1, 1 person-month in year 2, and 2 person-months in year 3) 9. The consultant will be an established specialist in defining organizational data information management requirements. The consultant will have extensive experience in information systems for nongovernment organizations operating in the area of BDS provision, and ideally should also have a banking background. The consultant will be able to design databases to provide a seamless integration between the individual data information needs of various organizations, in particular, Small Business Enterprise Centre (SBEC), Women in Business Foundation (WIBF), and the PMU. The consuitant will be experienced in establishing national databases for registries, and will be familiar with diatup access protocols. The consuttant will have a strong technical database design background using Microsoft Access. ‘The consultant will undertake the following tasks. 10. _ Management and Design of Business Development Services client base (2 person- months, year 1). The consuttant will (i) In consultation with the manager PMU, and management of SBEC and WIBF, review and document the common, and individual information requirements of both SBEC and WIBF with regards to client and loan management, and recording measures of performance (both quantitative and qualitative): (i) based on the above, design the databases and associated reports, utilizing data from existing databases where appropriate, install and test the integrity of data quality; (ii) document the systems and procedures in a users manual; (iv) provide training to both SBEC and WIBF staff on the use of the database; and (v) develop and document backup protocols, 11. A report will be submitted at the end of the assignment to the manager of the PMU, with copy to the directors of WIBF and SBEC. 12, Establishment of Updated Chattels Registry (1 person-month, year 2). The consultant will (@ in consultation with the Justice Department, banks, and other lending institutions, review and document the requirements for the chattels registry Upgrade (this will cover both the Chattel Transfer registry for personally owned property, and the Companies Registry, where the owners of such property are companies); (i) based on (i), design the database and associated. reports, utilizing data from existing databases where appropriate, install and test the integrity of data quality;13, 14, 15. 16. consultant will 17. submitted at the end of the assignmer ii) (iv) Wy) document the systems and procedures in a users manual provide training to Justice Department staff in the use of the database; and develop and document backup protocols. A report will be submitted at the end of the assignment to the manager of PMU with copies to the secretary to Justice Department and the Police Commission. Establishment of Central Credit Reference Facility (2 person-months, year 3). Responsibilities include @ Gi) Ww) ™ (vi) in consultation with the Central Bank of Samoa (CBS), and lending institutions, review and document the requirements for a central credit reference facility; based on (j), design the database and associated reports, install and test the integrity of data quality, establish security protocols to avoid unauthorized access; ‘document the systems and procedures in a users manual; Provide training to CBS, and lending institution staff in the use of the database; and develop and document backup protocols. A report will be ‘submitted at the end of the assignment to the manager of PMU with 2 copy to the governor, CBS. Design of Project Monitoring Database, PMU (1 person-month, year 1). The 0 iy Gil) (w) (v) in consultation with the manager, PMU, determine and document the information requirements for monitoring the projects implementation and performance; design, install, and test the database, integrity of data, and associated reports; document the systems and procedures in a users manual; provide training to PMU staff in the use of the database; and develop and document backup protocols. Consulting services for this task will be provided for two months. A report will be PSC. to the manager of the PMU, with a copy to the chair,VI. PROCUREMENT A. Basic Principle 18. All procurement of goods and services financed by ADB will be undertaken in accordance with the general policies and procecures laid down in the Bank's Guidelines for Procurement. Four basic principles underlie procurement under Sank loans: () eligible procurement sources - procurement oniy from member countries of ADB (@ list of ADB member countries is provided at the end of this Section [Attachment ]) (ii) economic and efficient use of loan proceeds (ii) adequate and equal opportunity for ADE member countries to participate in suppiying goods and related services and works, and (iv) transparency in procurement to achieve economy and efficiency, and combat fraud and corruption. 12. Schedule 4 of the Loan Agreement govems the procurement actions under the Project. The PMU wili be responsibie for ali procurement. Vehicles, computer equipment, anc other office equipment will be orocured using direst purchase. Local taxes and Guties are not eligible for ADB financing. Contracts may include them. However, they will not be financed by ADE. 20. Detailed explanations regarding procurement methods and procedures to be used under the Project are provided below. The tentative procurement packaging is attached at the end of this Section (Attacnmen: 7), 5. Procurement Procedures 4. Internationa! Shopping ) 21. Under the loan, each supsly contract for goods and services’ (other than minor items of office equipment) shali be awarded on the basis of intemational shopping. (2) The invitation to bic will be issued to @ reasonable number of contractors or suppiiers, as the case may be, which shall not be iess than three and from more than one eligible source country, anc should. whenever practicable, be advertised in an English language newspaper of general circulation in the Borrower's country. (0) Each draft invitation to bid and related bid documents shall be submitted to the Bank for approval before tney are issued. fe} The bids will be opened publicly. compared and evaluated as in international Competitive bidding. Notwithstanding 3.03(b} of the Guidelines for Procurement, any award of contrac: shall be subjes: tc prior ADB approval. The EA will furnish ADB, three copies of (i) summary and evaluation of bids received; (i) brie’ justification for making the awaré. anc (ii) aporopriate certficate of eligibility of the contract, when requires by the Bank14 (¢) Promptly after each contract is awarded, the EA will fumish ADB three copies of the contract as executed, 2. Direct Purchase (DP) 22. Contracts for the supply of certain minor items, estimated to cost in the aggregate of $94,000 or less will be procured using direct purchase. Prior to such procurement, a list of individual items to be procured, an estimate of their cost, an indication of potential sources of supply and any related documents shall be submitted to the Bank for approval.Attachment 6 ASIAN DEVELOPMENT BANK | County Nae Comey | Numeric comeney L Goa’ | "cose TAighnisan Repco a | oF [Afgan prin ts | @ [aupyas —— [AsSualies Dour mn aut | & attvars [assum sculing [Sie S| S ikaw (aseteganin Nat an | Ite Isgladesh Taka | Belgium Be. | oO BF [Belgumn Franc Sean au |S jw Neti Cenbectia && | & me Pine is Srace Gy | & fe Fiza, Popes Repabicot me | © [Game Sooisante & | 2 | Boma oa | | Binds, repute of te a | x | Ehuane a | it Emo ma | 3 rman, Fderal Republic of Gx | i Reng as | 3 ma a | 3 Innes nm | 3 iy me | i pe mm | 5 an : ke | i Kites mm | @ Freee tepapico ke | = ys Repub of K KesPeoptsDemecsicRepae | 140 | 2 ma | Maldive Mp] 8 Mama tands Repubicorte | mut | Micronesia Fedeme ie of mu | § Mongeua mov | 3 yana, Union of tea | 3 Nace Rep of Nav | | Ngai Me | Nett Ne | 3 New Zealand xa | 2 Newsy Ror | 2 Pauses rx | 2 Papea New Gaines me | Filippines Repo ofthe ma | & Same saw] 3 sx | = | @ S| & S| @ % 2 ® 5 2 x = 5 3 > & x [Note:The above codes, acronjns and names are adopted by since June 2957 denotes round of w whale mumaers, decimals not alowedAttachment 7 INDICATIVE PROCUREMENT PACKAGES (uss) Ref Description Cost Vehicies PCs 4.2 Chatte! Registry ‘Computer package $3,000 ° 1 1.4 Credit Reference Facity Computer hardware, software, modem, etc; $3,500 ° 1 2.3 Database Development Computer hardware, software, cabling etc; (SBEC, WIBF) ‘820,000 ° 4 ‘Additional capital items (desk, power surge, printers etc) 0 0 3.1 Pilot Microfinance Faciity Vehicies to improve mobilization $20,000 1 0 4.1 Small Loans Guarantee Scheme Vehicie $20,000 1 o ‘Additional capital improvements (office etc:) ° 0 7.4 Project Management Urit Computers, hardware, software etc; $7,000 0 2 Provision of office facilities 0 0 Vehicle 20,000 1 ° Total $94,000 3. 8 ‘PC=personal computer, SBEC=Small Business Enierprise Cente, WIBF=Women in Business Development.Vil. DISBURSEMENTS Basic Principle 23. The three main ornciples of disbursements are as follows: (i) proceeds of Bank icans snali be usec only for the ourposes for which the foan was aporoved with due attention tc consideration of economy anc efficiency; (i) the Borrower shall be permitted by the Bank to draw its funds only to mest expenditures in connection with the project as they are actually incurred; and (il) the proceeds of Bank ioan shall be used only for the rocurement in member sountries of goods and services produced in member countries 24. After the Loan Agreement is signed, the ADB Controliers Department sends a disbursement letter to the Borrower outlining the disbursement procedures and other related arrangements for financial administration of the project. A sample disbursement letter for this project is attached at tne enc ofthis Section (Attachment 8). 5. imprest/Counternart Accounts 25. To expedite Project implementation through the timely release of Ioan proceeds, portions of the loan proceeds will be deposited in an imprest account which will be esiablishec immediately after the effective date ai the CBS. The imorest account shall be established, managed, replenished, and liquidated in accordance with the Bank's Loan Disbursement Handbook dates January 2001, 2s amended from time to time. The initiat amount to be deposited in the imprest account is $350,000. Items eligible for financing under tne imprest account are the local currency expenditures for the following components: (i) SBLGS. (ii) Microfinance, and (ii) Business Advisory Services. 26. The statement of expenditures (SOE) procedure may be used for reimbursement of eligible expenditures and to liquidate/replenisn advances provided into the imprest account. Any: individual payment tc De reimbursed or liquidatedireplenished under the SOE procedure shall not exceed the equivalent of $80,000, Concurrent with the estabiishment of imprest account at CBS, the TD will open four separate imorest fund subsidiary ledgers to cover (i) Part A - the SBLGS, (ji) Part B = the SBDF, (ii) Part C — the pilot microfinance facility, and (iv) establishment and operations of the ML. The subsiiary iedgers will be used exciusively to record funds ‘soursec irom the imprest account for these separate purposes, and will be reconciled on & montnly basis. For ins propesed VCF, disbursement procedures will be specified in the investment agreemen:, Government contributions to the Project will be maintained in 2 separate counterpart account . Aliozatior of Loan Proceeds 10 be finance¢ out of the proceeds of th vides in Sons loan, allocation and financing ment,6 D. Conditions of Withdrawal from Loan Account 28. Part A - SBLGS: CBS enters into a memorandum of agreement with SBEC regarding the operation and management of the expanded SBLGS: and SBEC enters into a memorandum of understanding (MOU) with 2 minimum of two participating financial institutions setting forth the terms and conditions that will regulate the relationship between SBEC and the relevant institutions. Part B— SBDF: TD, acting through the PMU working in conjunction with the PSC Sub-committee enters info a memorandum of agreement with each accredited participating organization (the first of which are expected to be the SBEC and WIBF) regarding the utilization of the SBDF by the participating organization in question. Part C — Pilot Microfinance Facilty: TD and CBS enter into a memorandum of agreement with DBS regarding the initial operation and management of the proposed pilot microfinance facility Part D — Law and Policy Reform: TD, after consultation with the Department of Justice, the Office of the Attomey General, and DTCI, submits a memorandum to ‘ADB outlining how the consultancy services proposed under Part D of the Project are to be utiized 30. In addition, no withdrawals will be made from the Loan Account for utilization by DBS, the SBEC or WIBF until the relevant staff in DBS, the SBEC and WIBF have completed the training programs proposed under the Project for accredited institutions. Similarly, no other prospective participating organization shall be deciared eligible to utilize the proceeds of the Loan unt adequate training has been provided for its staff. =. Withdrawal Applications 31. A withdrawal application is a written request to the Bank by the Borrower to pay funds against the Borrower's loan account. The withdrawal application consists of: (i) the application itself, in letter form, in two copies, (ii) summary sheet(s) for each category claimed, and (ii) supporting documents, if required. All withdrawal applications against the loan must be signed by duly authorized representative(s)’ of the Borrower. 32. Withdrawal applications, summary sheets and items listed on every summary sheet should be consecutively numbered. The complete name, address and account number of the beneficiary bank should be indicated. In case the beneficiary bank is not located in the country of the requested currency of payment, the complete name and address of its correspondent bank operating in that country must be indicated. 33. The withdrawal application to be submitted to the Bank must be the signed original copy. Supporting documents may be submitted in photocopies. Alterations on the appiication forms should be initialed by the authorized representative of the Borrower. \ The Borrower's representative designated in the loan agreement will fumish sufficient evidence of the authority of the person(s) who wil sion the withdrawal application together with their ‘authenticated specimen signatures. The evidence must reach the Bank before the first witndrawal ‘application is submited by the Borrower.7 7 34. On receipt of a withdrawal application from the Borrower, the Bank's Controller's, Department reviews the adequacy of documentation in consultation, where necessary, with the department responsible for project administration (in this case the Bank's Pacific Operations Division). On approval of disbursement by the Controller's Department, the Payment is made by the Treasurer's Department. The Controller's Department then advises the Sorrower of the disbursement through periodic reports 35, Sample withdrawal application forms for intial advance, replenishment of imprest account and direct payment, and withdrawal application ledger are provided at the end of this section (Attachment 8). A CD-ROM containing information guide on disbursement procedures of ADB is provided together with this PAM. F, Disbursement Procedures 36, The disbursement procedures applicable to this Project are described below: 1. Direct Payment Procedure 37. Under the direct payment procedure, the Bank makes payment directly to the supplier, contractor, or consultant, on the basis of a withdrawal application submitted by the Borrower. 38, The withdrawal application for direct payment consists of: (i) withdrawal application, (ii) summary sheet, and (ii) supporting documents. 3. For payment of consultant's services, the supporting documents are: (j) contract, , {ii) consultant's claim/invoice, and (ii) summary for out-of-pocket expenses claimed. ae 40, For progress payment of civil works, the supporting documents are: (i) contract, (i contractor's ciaim, and (ii) engineer's certificate. 41. For payment of goods, the supporting documents are: (i) contractipurchase order, (i) suppliers invoice, and (ii) transport documents, i.e., airway bill, consignment notes oF bill of lading, For complete details, see Section 7 of the Handbook. 2. Reimbursement Procedure 42. Under the Bank's reimbursement procedure, the Borrower pays the supplier of goods or services from his own funds and then claim reimbursement from the Bank. Reimbursement procedure is generally suitable for payment of (i) local currency costs, (i) small purchases, and (c) civil works that involve local expenditures financed by ADB, 43, The withdrawal application for reimbursement consists of: (i) withdrawal application, (i) summary sheet, and (ii) supporting documents. 44. The supporting documents are the same as in direct payment procedure, but the evidence of payment by the Borrower or EA should be attached,18 : 45. To promote efficiency in processing disbursements, the minimum’ value of a withdrawal application under direct payment or reimbursement should be $100,000. For complete details, see Section 9 of the Handbook. 3. ‘The imprest Fund Procedure 48. The imprest fund procedure is a procedure whereby the Bank provides the EA with funds in advance to meet project expenditures. This procedure is suitable for small and numerous expenditures, training and fellowship programs. 47. For this Project, the imprest fund shall be used for the payment of local currency expenditures for the following components: (i) SBLGS, (i) microfinance, and (ii) ‘advisory services. The initial amount to be deposited into The TABPESt account Senco 48. The procedures for establishing and operating the imprest account are outlined below: a. Initial Advance ()) After the effective date, an imprest account shall be established at CBS. ‘The account shall be denominated in US dollars. (i) A withdrawal application for initial advance of $350,000 together with a statement setting out the anticipated expenditures for a period of six ‘months should be attached (sample provided at the end of this Section). b. Liquidation and Replenishment For liquidation or replenishment, the requirements are: (j) withdrawal application, (i) summary sheet’ or liquidation of advance form, (ii) supporting documents, (iv) evidence of paymentireceipts, (v) bank statement, and (vi) imprest account reconciliation statement. (iv) For payments not exceeding $60,000, the statement of expenditures (SOE) procedures may be used. The supporting documents are retained by the Borrower for subsequent verification by Bank disbursement and review missions. A brief explanation of the SOE procedure is described below. For complete details, see Section 9 of the Handbook. 4. ~ Statement of Expenditures Procedure 49, The SOE procedure is a reimbursement procedure requiring no submission of supporting documentation. In the SOE, the Borrower certifies that the expenditures have been incurred and paid for in accordance with the terms and conditions of the loan agreement. The records are maintained and are available for inspection by Bank review ns and independent auditors, as required. The SOE procedure may also be used in connection with the liquidation or replenishment of the imprest account.19 50. __ Where any payment made under the SOE procedure is subsequently found by the Bank to be insufficiently supported or ineligible for Bank financing, the Bank may offset the amount of the unjustified or ineligible payment against subsequent withdrawals or request the Borrower of EA to refund the same amount to the loan account. G. Disbursement Reports 51. The Bank makes available the following reports to provide Borrowers and EAs with information regarding the status of disbursements: 1. Payment Advice. When ADB executes payment, the Borrower is notified of the details of the payment inciuding reasons for any disallowances. ‘Semi-Monthly Listing of Loan Disbursement. This provides the details of all disbursements made under a given loan during the semi-monthly period. The Bank automatically sends this reports to Borrower and EAs where there is a disbursement during the said period. 3. Statement of Withdrawal Vouchers. This report lists disbursement details sorted by loan category or by withdrawal application. This report is provided only when the report “Semimonthly Listing of Loan Disbursements” is not received by the EA and it needs to reconcile its records. 4, Statement of Amounts Capitalized. This report is sent ‘semiannually to the Borrower and the EAs concemed on the due date specified in the Loan Agreement. Attached to this report is a ‘copy of the loan disbursement ledger summarizing activities of the Joan in the preceding six-month period. H. Contract Awards and Disbursement Projections 52. In order to effectively monitor project implementation, EAs are requested to prepare and submit to the ADB their own annual projections of contract awards and disbursements with quarterly breakdown. This requirement is normally prepared before the start of the calendar year. A sample projection worksheet is attached at the end of this section (Attachment 10), 1 Loan Closing Date 53. The loan closing date is the last date for the Borrower to make withdrawals from the loan account, Action is taken by the Bank to close the account in consultation with the Borrowerwhen the Bank is satisfied that no further disbursements are likely to occur. The loan account is closed after the Bank notifies the Borrower of the closure of the account, cancels the unutiized loan balance and adjusts any unliquidated advances. For purposes of this Loan, the closing date for withdrawals from the Loan Account shall be 31 August 2006 or such other dates as may from time to time be agreed between the Borrower and the Bank,20 1. Extension of Loan Closing Date 54. Closing dates may be extended in justifiable cases and after ensuring that adequate arrangements exist for completing the project within the extended timeframe. If the closing date needs to be extended, the Borrower submits a request to ADB, or in the absence of such a request, the sector division or RM, in this case, the Pacific Operations Division, proposes a revised closing date to the Borrower and ask the Borrower to confirm the proposal. Upon receipt of the request or confirmation from the Borrower, the sector division or RM consults with the Operations Coordination Division/Unit and Project Coordination and Procurement Division, and prepares a brief submission recommending approval of the extension of the Loan closing date. 55. When extension of the loan closing date is not justified or considered not necessary, the loan account may be kept open for a period of three months beyond the loan closing date in order to complete disbursements for expenditures incurred prior to ioan closing.Attachment & EXAMPLE OF A DISBURSEMENT LETTER (CTDO/(YEAR) (MONTH) (YEAR) Name Of The Borrower Address Dear Sir/Madam: LOAN: (Project name) |. We draw your attention tothe loan agreement and other related documents dated of the above loan. The loan account will be credited with USS/SDR when the loan agreement becomes effective. Withdrawal of Loan Proceeds Expenditures are normally eligble for financing from the date the loan agreement ‘becomes effective. We enclose thre copies of our Lan Disbursement Handbook and hope it ‘will asist you in making withdrawals from the loan acount For disbursements using | the SOE procedure and/or the imprest fund procedure which normally require bank approval, please refer to Chapters 9 and 10 of the Handbook, Sample withdrawal applica ‘ton forms ae in the Appendixes ofthe HandBoot.* incomplete withdrawal applications which do not substantaly meet the criteria requirements for disbursement, wil be retumed to you 3. We wish to draw your particular attention to-the following disbursement arrangements (Amprest Fund Procedure Under paragraph ____of Schedule 3 of the loan agreement, wiven ADB's imprest fund procedure is used, a portion of the loan proceeds is deposited by ADB into an imprest account from which you may draw ADB's share of eligible Project expenditures. Detailed procedures for establishing and operating the imprest fund are set out in Annex of this letter. (i) Statement of Expenditures (SOE) Procedure of Schedule 3 ofthe loan agreement, you may apply the SOE imburse liquidate, or replenish the imprest account for expenditures or Under paragraph protedure to hdrawal application is numbered sequentially with » fivecharacter ‘numeric identiicaon, such as 0001. Assign an alpha identification for each EA (province) if there {s more than one £4 and submission of withdrawal applications is done separately by the EA (province).EXAMPLE OF A DISBURSEMENT LETTER omtinued contracts amounting to _. Details of the SOE procedure and formats to be ‘used are in the Loan Dighursement Handbook. Under SOE procedure you should retain all supporting documents and produce them for examination by ADB's representative whenever needed. Furthermore, SOE records are periodically audited, as part of the project audit, by an independent auditor or auditor acceptable to ADB and the audit report isto be given to ADB by the date indicated in the loan agreement after the end of each fiscal year. (Gi) Retroactive Financing Under paragraph ___ of Schedule 3 of the loan agreement, ADB agrees to retroactive financing of expenditures incurzed from. to the effective date up to USS/SDR for (specity eligible expenditures covered). Such expenditures are accumu Tated and withdrawn from the loan account immediately after the loan is effective using the reimbursement procedure described in the Loan Dishursement Handbook. Authorized Signatorylies) ‘The Lom Disbursement Handbook describes what you must do before disbursement ‘commences. The person(s) nominated by you to sign the withdrawal application on your Dehalf should be authorized under the loan agreement provisions. An authorization letter, together with the relevant specimen signature(s,is to be sent to ADB before submission ofthe first withdrawal application. IF there is a change in the authorized personts) later, send us a new authorization leter, accompanied by the specimen signature(s) to ensure uninterrupted processing of loan disbursements Minimum Amount per Withdrawal Application To promote efticiency in processing loan disbursements, a minimum value per with- drawal application is set at USS100,000 equivalent (or the amount determined to be reasonably minimum). As far as possible, the EA is requested to consolidate claims and submit a withdrawal application after its amount has exceeded this limit. Loan Service Payment ‘Arrangements are to be made for paying principal, as well as interest front-end fees, and ‘other charges on the due dates specified in the loan agreement. Required Action We suggest that the procedures contained in the enclosed publications be studied thor oughly by the officials responsible for administering the loan. Please tell us if we can clarify any of the attachments. To avoid delays in disbursement after the loan becomes cfiective, you should quickly(a) submit the withdrawal authorization letter together with the specimen signature(s}; (b) submit the withdrawal application for reimbursement of expenditures eligible for retroactive financing: and (©) submit the withdrawal application forthe initial deposit to the imprest account. Advice of Withdrawals 8. Advice of withdrawals and other loan disbursement information is available at the i Controller's web address http: / /iisadb.org. For password access, contact the Webmaster at lfis@adb.org. Pease also provide us the updated address, telephone number, and e- ‘mail address ofthe executing implementing agency(ies) concered. 9. Please circulate ths letter tothe project staf, including project accountants. 10. We look forward to your continued cooperation and a mutually beneficial relationship, | Sincerely yours, | Assistant Controller Disbursement Operations Division | Controller's Department co Name of EAs Address bce: Projects Officer Attachments 1 Ladin Agreement 2. Laon Disbursement Handbook 3. Procedures for Establishing and Operating the imprest AccountAttachment S ADB WITHDRAWAL APPLICATION FOR IMPREST FUND (Form ADB-IFP) Been sqsonmve FETT TY hans Pave ‘pel arene Loan Disbursement HandbookINSTRUCTIONS FOR PREPARING WITHDRAWAL APPLICATION OR IMPREST FUND ‘Gorm ADB) Submut witawal appar (W/A) ote Ban (os Rese Mision fisted in dupe ‘Nunber 0 /As conecusely, ot exceeding Sigs oF harnces For repentant of advan onda cane unl he amount ing withrnwm sat a 10000 etal ‘en the applic complied vent completes of spportng dacumentton an acura of as before pang the Authorané Repeal) iorsigaaur. Miakes and omisons result in eae payment ‘x: Ee be t/a Athos apt) tn ae ts pd | Eisai shew sob ater sy ‘iGituantlunieNanoe W Arcos ean one nego ‘SBE ee morn ange in apsicencon orc Ba Fr ela AT R09 4 GupalBkiagaman indent Be sproponebox he pe of W/A ki, writ Avn/ncete Pelee hen i stimate of Expendieres Sheet 1 1 Providell denis as euized inform ADSIFP-EES. Estimated expendi should nama be eed on he amount ‘lconsace amd snd tbe mused Estates xpendue ould not exceed heen man For expeninres isn 0 opener, the nn shoul be inked the proper anal bulge Prion Nosupportng docu ar reurd ForReoienshmens i 1, Inadcton 1 and show. fore sb he W/A, abit cota procurement documents othe Bank Projet Dion concerned emacs ceding 10010), 2 Where SOE nt allowed sumatalleveress payment mvs fading or work eta. The ‘apurements ar the ne fr etivement prea 5 Inllcaerstach nk sotenent rom he ani mang the gre Fund andthe bank recent of he pret and Acton Paves Nane and Adit: Ica fl name ae are of Pave fo ieiicanon of payment ‘NusandAddmca’Poex‘s Bent and zoo No Indo lame and acres ofthe pays tk which may ‘Beat baner/oineh desgaton Acourtrunbersimporant. Give SWIFT endel! Payer stank ica member af Sui Conercanden Ban Where payers be mace ts bn not cated inthe oars of the ny ob ald indice tulle and ates, Prove SWIFT coe! bank na meter of SWE 4. Sees Paement aera! Indete any paral soeal mance 0 references faint payment or ‘NameafRorer” Fin th name a appar nh Loan A fate): Puss appa only © Aono Represents) for sigma, Vesfyi he {Go Autorand repress ben ranged Loan Disbursement HandbookESTIMATE OF EXPENDITURE FOR IMPREST ACCOUNT (Form ADB-IFP-EES) ASIAN DEVELOPMENT BANK i ESTIMATE OF EXPENDITURE FOR IMPREST ACCOUNT. (Form ADB-FP-EES) 7 Tooled pence owes of ener aaa by ADS 1A epi Estimate of Expt She shal bee forex ete 2 etree peer fr exten ncn teh ceed in Caen of expend “he moun cin soak eed te coreponding anon the OREN Cara Alou Rane Borrower “Tahoraed Represenaive Loan Disoursement HandbookIMPREST ACCOUNT RECONCILIATION STATEMENT IMPREST ACCOUNT RECONCILIATION STATEMENT LOAN/COFINANCIER NUMBER: Agpinton Numbers i ‘ACCOUNT NUMBER wre ANG i Bank Accra 1. OUTSTANDING AMOUNT ADVANCED TO ‘THE IMPREST ACCOUNT NOT YET RECOVERED ‘Amount in imprest Account at of perbank eatement copy atached) 3. Ada: Amount of eigibie expenditures documented lame {natached apphcabon (No. > ws ‘Ade: Amounts aimed in previous applications nt yet ‘ceded a dat of bank aatement 5. Ad@: Tot expenditures withdrawn from imprest Account at rot yet lam for replenishment Gndeate deals) 6 TOTALADVANCE ACCOUNTED FOR “Explanation a any discrepancy berwomn totals speazng in nes 1 and 6above (eg ame snverest crete othe acount, Dank charge Date ‘Sigua: TT Tite ‘Loan Disbursement Handbook‘WITHDRAWAL APPLICATION FORM (Form ADB-DRP/RMP) soe: COOP Te AsamDelpment Bak “eet Daten: Den Payot | eb Pips 1D teobeent ‘Asen: Contr Deprient-Dabnenent Option Dison (DO) 1. teow te Lan Agen ted erm he At reap Bak (AD) ed he ‘Gemma "pe ry non DeLana —eemyne —iecatiotepat nee — ‘eestor for rent or banana specs CTO at eed menaced Some er) 2 Themed ei end palo 1 xen w/w be made tarpon ied i he Laan Aeneid he ‘Scaped avo evry wisinen nS Lns Atm nr Sed one ny ‘Shen ce or etre pps yo pray meng hv opens Stents on pod mss hh Ls Apes ta | thy het roc rac here ch _Seyutisorscwmer wae ore reac nen oped y mambo of ADB ‘Pisin nce Sma Set 4 pendinne Gaede fSommanf Epes SOE, a then ‘Scan have nen re cae son rte SOE Senn Sein wb ‘evn ene seas ne ADB repre pn fo + Bluvuneartwpyeeaton tern tang donut tne Lam Aen he Prt ‘memento the Gants Apeme 1 tS then peat pct armed cent ae of ch ends ‘iin cms aeons oer Nance items Baked te © Comapondet ns Payee stat ad se Coty woe rey ede mae ‘Sent tcp omy wher cee se Pld) 4: Spat amen tin Oe Ro 4S Thisappicenn const ium ening mune page Sema Set Reto haa apa ST eeiome Fathead grea)INSTRUCTIONS FOR PREPARING WITHDRAMAL APPLICATION FORDIRECT PAYMENT AND REDMBURSEMENT FORM ADE DRPIRNE (Genera Inetrctons 1. Smit withdrawal applications (W/A)w ADB ois Rasen Mission, instructed) in duplicate 2. repute separate W/A foreach cureny af payment fr ech payer. 3. Number ¥/As consecutively. not encoding dips or charac. 4. Consolidate hms und the amour being withdrawn iat eas $100.00 equivalent or an amount vised by ADB: 5. When complete, vey this applicain fo completeness of supporting documentation and aezoracy ‘of deals btore passing he Autos Reprsenatvels) ior sgutize, Mistakes and omisone resutindelaved payment. Withdrawal References 1. Dae: Enterhe date the W/Ais signed by Authored Represesvels) not the dat twas prepared, 2 _LoanNumber : Show ADB lan mumber clearly, 3. Applicaton Number: Number W/Asconscuely. the projec has more than ne Executing of [implementing Ageney (EA) She projec coordina should anage an alpha dentsention for exch EA. For example ADO to AOR for EA na, and BOD BIS for EA no. 2. 4. TypeotDicburamment Indicate he appropriate bx the type of W/A lain, wheter for Direct Payment or Resrinrsement Procedure Payment instructions 1. Raves Nome snd Adds: Indica fll tume end adres of Payee for identi of payment. 2 Nameand Ades of Paves Bank and Acct No: Indicate fullname and addres ofthe pavee's ‘bank, hich may ice banker /oanch Geigaton, Account number ie important. Give SWIET cade Payee'sbank is member of SWIFT. 3. Comepondent Bank: Where paymenisto be made banknote inthe county of he ‘Srey o be pint ul mame snd ares. Provide SWIFT code if the banks «member of ST, 4. Scat ParmentIemacon:Indatany parla, speci iractions or references to facie Pavment or denBcaton of payment 5 Name Romowee: Flinmame ait appensin the Loan Agree 6 Authorised Renresertvt): Pas this plain ony to Authrized Representatives) for Satur. Ventyf the it of Auhaize Represents) as bem changed. Loan Disbursement Handbookyoogpuey wowesingsig u807 1D Direct tayment (aon ons) ASIAN DEVELOPMENT BANK 'SUNMARY SHEET 1 Retntunsment fab irs) C0 tigation cabins) “Tana (wonepmbry wouasmaunayqusueg Datid 104) I3RHS XUVWINNS daYyoogpue} uewesingsiq ueo7 Touconmen st Ustoneeeeer 1D reed gat Aone D1 nentenenent Co Uae (mojeg PUE god’dOTSSA Jo SENUOD s0¥) (GOS) SAMALIGNADG 40 LINAWALVIS davPeete Opti eet ADB STATEMENT OF EXPENDITURES (SOE) (For Contracts Over US$100,000)‘yoorpuey wewesingsiq ue07 ASIAN DEVELOPMENT BANK, “STATEMENT OF EXPENDITURES SOP) (rect peed C1 Aepeinent D7 Reimbursement tution (9209 Supei=d0) : (20S) STUN.LIGNADG JO INSAALVLS advADB STATEMENT OF EXPENDITURES (SOE) (Free Format) | ASIAN DEVELOPMENT BANK STATEMENT OF EXPENDITURES (SOE) Free Format (For the period -__ [from] _ to ) Lome, Withdrawal Applicaton No Dae Summary She Nos «Dilation Replenish of ipo Advances (Cargory subcategory No EB einteenen i TOS 1 (A) Tot! Column 5) Percentage of ADB Facing ©) ADBFsancing ei tamby ceri ta the sbove amounts Ive bern ui or proper eectn of Poe cs ihn the tems and conidon ofthe Lan Agrees All decmenntonsebnring then expences hat beh ‘up inert) ad wilt ade vate pea eq ecw mio wa expends ch 2s ment perigee lows ad raining, reed by conta svat, For ther SOE cama, clame heding td es may Pe omit it he iceman of he pre Loan Disbursement HandocokYEARLY CONTRACT AWARDSICOMMITMENTS ANO DISBURSEMENT PROJECTIONS (§ Mltlon) PAINos 41 lene dy 1092 mse in October 1990 PROJECTIONS MADE IN: TA Vea mE FTE ,_ COTATI QUARTER ‘QUARTERS GuARTER TOTAL PROKECTED FOR THE ‘Ao, May. ne “hay, Rapa Seplor Geter, November Desabar YEAR - ‘itera ‘Dibursenen oe Diersenent ape commodo Tobe | OP Canmieser Tote [oP Cannes contact vate | soca Reed mado Tobe | OP aot Raed sino Resta fos ot ‘most ein | Contec Vat | Amount el tre Coto tobe cone! tote Contec 7 ad Convo” [ox] cMBCOMAEY IGP] conecVae [oq] 2 @CA! Tap] conar Vu! oa cause | creer? | ‘Commune continent Core ona )_ [OA] COMIN) SRL Commins cote ot aumqoesauVill REPORTING REQUIREMENTS, ‘A. Quarterly Progress Report (QPR) 56. The PMU will submit to ADB quarterly progress reports on the progress of the Project for the periods ending 31 March, 30 June, 30 September, and 31 December of each year, and submit them to ADB through the Treasury Department no later than 30, days after the end of the relevant period. The reports will be in a format acceptable to ADB and will include (i) information on the progress of project implementation, (ji) implementation issues encountered and measures adopted for their resolution, (ii) information on the status of compliance with loan covenants, and (iv) proposed program of activities to be undertaken during the next three months. The reports will also include information on operation and performance of PFis under the Project. The PMU will also submit to ADB (i) brief monthly The requirements and purpose of such reports are to reflect the implementation and results of each component A sample format of the quarteriy progress report as well as other suggested reporting formats are attached at the end of this Section (Attachment 11). The format of these reports will be finalized when the PMU is established. B. Audit Report 57. The financial reporting requirements for this Loan are stipulated in Section 4.06. of the Loan Agreement. Certified copies of audited accounts and financial statements {AFS) and the report of the auditors (including auditor's opinion on the use of loan proceeds and compliance with loan covenants as well as use of the imprest account/statement of expenditure (SOE) should be submitted to ADB not later than six months after the end of the fiscal year to which they relate. The first AFS to be submitted to the Bank should cover FY2002 and shall become due on 31 December 2002. A sample audit letter, which outines the Bank's auditing requirements, is attached at the ‘end of this Section (Attachment 12). 58. The Government, acting through Treasury. will (i) maintain separate accounts for and (i) ensure that accounts and reiated financial statements are audited in accordance with intemational accounting standards by auditors acceptable to ‘ADB. VCF will be audited on an annual basis. A reputable auditing company will audit the SBDF on an annual basis. Detailed quarterly reports of the financial position of the funds, with itemized income and disbursements should be attached to the QPR. C. Project Completion Report 59. After physical completion of the Project, but not iater than three months thereafter, or such later date as may be agreed for this purpose between the Borrower and the Bank, the Borrower/EA shall prepare and fumish to the Bank a project completion report (PCR) in such form and in such details as the Bank shall reasonably request, on the execution and initial operation of the Project, including its cost, the performance by the Borrower of its obligations under the Loan Agreement and the accomplishment of the purposes of the Loan, A suggested outline for the PCR is provided at the end of this section (Attachment 13)..Attachment 11 ‘SAMPLE FORMAT FOR PREPARATION OF PROGRESS REPORT For the Quarter Ending PROJECT PERFORMANCE REPORT ‘SUMMARY This part should contain a summarized version of the Project implementation status to serve as an Executive Summary. It should compare original and revised schedules and actual achievements/shortals in terms of physical and financial targets and accomplishments. It should also highlight likely variations in Project costs and implementation schedules. TECHNICAL This should provide information on significant physical activities which took place during the period together with an assessment of progress achieved and expected to be achieved in the next period. This should contain information at least on the following aspects: (physical works accomplished during the reporting period; (i) @ comparison of the actual progress at the end of the reporting period with that of the original forecast; (ii) changes in the original/revised plans and schedules or deviations therefrom, both actual or expected; (iv) other changes, modifications, deviations or events which affected physical progress during the period or which are likely to affect implementation in the next period; and (V) the expected date of completion of major components (physical elements) of the Project. Information should also be provided on measures taken or planned to correct the factors responsibie for delays during the period or which are likely to affect physical progress in the future, or any unusual occurrences affecting the progress of the Project components. Construction progress should be supported by bar charts. Useful illustrative photographs, with proper identification and dates should be used to reflect Project progress or expiain difficulties.FINANCIAL, Tris should identify actual and projected changes to cost estimates of both foreign exchange cost and local cost. ‘The annual financing plan for the Project and the achievements in financial terms during the period should be stated. The details should cover the following: (i) amount requested by the Executing Agency for allocation in the annual budget, (i) amount allocated under the annual budget, (ii) utilization during the period and year to date, and (jv) forecast of utlization during the remaining part of the year. MANAGEMENT AND OPERATIONS This part, supported by schedules or tables, should highlight the major types of activities undertaken during the period with accomplishments in related to expected achievements. Specifically, this part should focus on: () actual or prospective changes in the organization of the executing agency, its management, etc. (ii) status of project office staffing in terms of Project. Manager, engineers, design personnel and accountant. (ii) constitution and functioning of coordination committees, both at central and local levels, indicating number of meetings held and significant decisions taken, (iv) any developments affecting rates, charges, user fees, etc. (¥) status of implementation of training programs and seminars. LOAN COVENANTS This part should indicate the status of compliance with covenants contained in the loan documents. It should indicate the projected or estimated date for compliance and record the actual date of compliance. The guidelines given above are for guidance only and should be adjusted to the nature of the Project and requirements for effective projectSTATUS OF SMALL BUSINESS LOAN GUARANTEES As of No: Current Quarter Previous Quarter ‘ST 000 No: ‘ST000 ‘A. Total Loan Guarantee Portfolio By Sector = manufacturing/construction = tourism/hospitalty + retail = transport - fisheries = agricultural - handoraft + other TOTAL B. Total New Loan Guarantees written . Total Loans in Current Repayment D- Actual Overdues - Principal -_ Interest TOTAL E. Age Distribution of Loan Arrears ~ less than six months = 6 to 12 months ~ 13 to 24 months = _more than 24 months TOTAL F. Total Guarantee Draw downs G. Ratios - CA 1 oa LSTATUS OF MICRO-FINANCE LOANS As of “Amount in ST tala ('000) Current Quarter Previous Quarter No: [ST "000 No! ‘ST 000 A Total Loans in Portfolio B. Total Loans in Portfolio by Employment Status of Applicant - Full time paid employment - Panttime paid employment - Self employed - Unemployed TOTAL C. Total Loans in Current Repayment D. Actual Overdues * ~ Principal ~ Interest TOTAL E. Age Distribution of Loan Arrears ~~ less than six monttis = 6 to 12 months - 1310.24 months = more than 24 months TOTAL F. Number of Participating Organisations in scheme G. Number & Value of Savings Component G. Ratios - CIA - DA = GIABENEFIT MONITORING AND EVALUATION - SUMMARY (Client Database) As of Participating Organisation, | Units Current Quarter Previous Quarter ‘A. Total Enterprises Currently Operating - Being implemented Satisfactory = Expetiencing Temporary Difficulty’ - Experiencing Major Difficulty” TOTAL B. Total Enterprises Currently Operating by Gender of Principle Sponsor male - female = couple TOTAL C. Total Enterprises Currently Operating & Number of Persons Directly Employed by Sector 5 = Formal sector (VAGST registered) = _ Informal Sector (not registered) TOTAL Enterprises Employees D. New Enterprises Established by industry sector & persons employed = manufacturing/construction = tourismihospitality = retail = transport - fisheries = agricultural - handcraft = other TOTAL E, Enterprises Closed/Ceased trading Enterprises Employees * “Businesses in Temporary Dificity" ae those who normally operate without problems, and have the capacity 0 meet all her current requirements on time, but who may be experiencing shot term setbacks which are expected to be resolved shorty, enabing them to meet al ther curent nancial obligations. ? “Businesses Experiencing Major Difficulty” are those which have long term problems such as unsuitable ‘equipment, unmarketable products, or depletion of funds by continued losses.CREDIT GUARANTEE APPRAISAL Chairperson, Guarantee Credit Committee Project Management Unit Dear Sir, Re: Credit Guarantee Scheme Please find attached our Appraisal Report forthe following loan to be guaranteed under the ‘Small Business Loans Guarantee Scheme: 1. BORROWER 4. Name 2. Address a. Residence b. Place of Business 3. Legal Structure of Borrower 4, Type of Industry 2 SPONSOR & COMPANY BACKGROUND, PROJECT DESCRIPTION AND PURPOSE OF LOAN 3. TERMS AND CONDITIONS OF THE LOAN Loan Amount Interest Rate Term Amount Guaranteed Security/Collateral Offered Special Conditions PROJECT COST & FINANCING PLAN oa hens PROJECT COST FINANCING PLANFINANCIAL EVALUATION PRE-FINANCING | POST FINANCING Total Sales — domestic - export Profit Before Tax (ST) Profit After Tax (ST) Long Term Debt Equity Ratio Debt Service Cover Ratio Return on Equily Financial Rate of Retum c 6 ECONOMIC EVALUATION Full Time, Part Time Number of Jobs Created -_ male = female Value Added ~ ST000 | APPRAISAL OF PROJECT CERTIFICATION Wve certify 1 ‘The project complies with all existing environmental laws and regulations in force in ‘Samoa, and that we are satisfied that there are no adverse environmental or social impacts from this project. ‘The project is in accordance with the Government's development plans and strategies. ‘The project is eligible for cover under the terms and conditions of the Guarantee scheme and any additional requirements of the Central Bank. We bave undertaken an assessment of the sponsor, and are satisfied that the sponsor has sufficient skils to manage the proposed project or expanded project, and that an agreement has been entered into with the sponsor for SBEC to provide regular monitoring and support of the enterprise. The financial projections, market analysis, financing pian and underlying assumptions to the projections are reasonable. * ‘Your approval of this application for cover is requested.Attachment 12 SAMPLE AUDIT LETTER a, ASIAN DEVELOPMENT BANK “4, PACIFIC DEPARTMENT PACIFIC OPERATIONS DIVISION Dear Sir/Madam Subject: Loan No. 1785-SAM: Small Business Development Project Financial Reporting and Auditing Requirements This letter is to ensure your timely compliance with the loan covenants and the quaity of financial information as required by ADB. ADB's Financial Reporting and Auditing of Projects-Financed by ADB (the Bookiet) is enclosed to guide you. ADB, by its Charter, is required to ensure that the proceeds of any loan made, guaranteed, or participated in by ADB are used for the purposes for which the loan was approved. ADB requires accurate and timely financial information from its Borrowers to be assured that expenditure was for the purposes stated in the loan agreement. For this particular loan, the requirements are stipulated in sections 4.06 and 4.07 of the Loan Agreement between ADB and the Independent State of Samoa. Copy of the Loan Agreement is enclosed for onward transmission by your office to your EA and the auditors, together with a copy ofthis letter. The following are the main requirements: ‘© ADB requires the EA to maintain separate project accounts and records exclusively for the Project to ensure that the loan funds were used only for the objectives set out in the Loan. The project accounts comprise the following: = Project Management Unit - Loan Guarantee Scheme + Small Business Development Fund - Pilot Microfinance Facutty - Equipment and Vehicie+ The first set of project accounts to be submitted to ADB covers the fiscal year ending June 2002. As stipulated in the Loan Agreement, they are to be submitted up to 6 months after the end of the fiscal year. For this loan, the deadline is by 31 December 2002. A sample report format with explanatory notes, is attached as Annex A. + The accounts and records for the project are to be consistently maintained by using sound accounting principles. Please stipulate that your extemal auditor is to express an opinion on whether the financial report has been prepared using intemational or local generally accepted accounting standards and whether they have been applied consistently ‘ADB prefers project accounts to use intemational accounting standards ‘prescribed by the Intemational Accounting Standards Committee. Please advise your extemal auditor to comment on the impact of any deviations, by The Treasury Department from international accounting standards. ‘+ Please ensure that your extemal auditor specifies in the Aucitor’s Report the appropriate auditing standards they used, and direct them to expand the scope of the paragraph in the Auditor's Report by disclosing the key audit procedures followed. Your extemal auditor is also to state whether the same audit procedures were followed for alll ‘supplementary financial statements submitted. » ADB wishes that auditors conform to the intemational auditing ‘standards issued by the Intemational Federation of Accountants. In cases where other auditing standards are used, request that your external auditor to indicate in the Auditor's Report the extent of any differences and their impact on the audit. . a ‘extemal auditor's opinion is also required on whether the proceeds of the ADB's loan have been utilized only for the project as stated in the Loan Agreement. = the financial information contains data specifically agreed upon between the Treasury Department and ADB to be included in the financial statements = the financial information complies with relevant regulations and statutory requirements; and = compliance ahs been met with all the financial covenants contained in the Loan of Project Agreements. ‘© The Auditor's Report is to clearly state the reasons for any opinions that are qualified, adverse, or disclaimers. 2 6 ADB Avenue, Mandaluyong Cay, 1401 Metro Manila, Philippines ° Postal Address 789, 0980 Mari, Philippines. Telephone Numbers: 632-4444 Qoca) (63-2) 711-3851 (international) Facsimile: (62-2) 696-2441; (63-2) 636-2445, (62-2) 631-7961 * Cable: ASIANBANK MANILA‘= Actions on deficiencies disclosed by the external aucitor in its report are to be resolved by the Treasury Department within a reasonable ‘time. The extemal auditor is to comment in the subsequent Auditor's Report on the adequacy of the corrective measures taken by the Treasury Department. Compiance with these ADB requirements will be monitored by missions and during normal project supervision, and followed up regularly with all concemed, including the extemal auditor. Sincerely yours, Peter King Director, Area B Pacific Department encka/s 3 {6 ADE Avenue, Mandaluyong Oly, 1401 Metro Manda, Piippines * Postal Adress 789, 0960 Mari, Philippines. Telechone Numbers: 62-4444 (local; (63-2) 711-3851 (international) Facsimile: (63-2) 636-2461; (6-2) 696-2445, (63-2) 631-7061 “Cable: ASIANBANK MANILAAttachment 13 Project Completion Report Template for Project, Multiproject, Sector, and Program Loans ASIAN DEVELOPMENT BANK PCR{CCC 00009 PROJECT {or PROGRAM} COMPLETION REPORT ON THE {PROJECT OR PROGRAM NAME} (Loan XXXX-CCCISF]) IN {or TO THE} {COUNTRY OR ENTITY NAME} {Month Year}CURRENCY EQUIVALENTS, {as of (Day Month Year}) Currency Unit - {Currency Name (Abbreviation)} At Appraisal At Project {or Program} Completion (Gate) (Gate) {Abbr} 1.00 X } Xf $1.00 {Abbr} fAbbr_} ABBREVIATIONS {AAA} ~ {spell out (capitalize only proper names)} (888) - {Spell out} {ccc} ~ {spell out} WEIGHTS AND MEASURES {symbol + (full name 1)) - — Pefintion 1} {symbol 2 (full name 2)} = {Definition 2} {symbol 3 (full name 3)} = Definition 3} GLOSSARY {Tem 1} - (Definition 1} {Tem 2} - {Definition 2} {Term 3} - {Definition 3} NOTE(S} (The fiscal year (FY) of (the Goverment and its agencies} ends on {day month}. FY before a calendar year denotes the year in which the fiscal year ends, e.g., ~FY2000 ends on {day month) 2000. {Note: If FYs are not referred to in the text, delete the entire note, change NOTES to NOTE, and remove the list numbering from the remaining item by pressing CTRL+Q or by placing the cursor at the beginning of the paragraph and pressing the backspace key.} (i) In this report, "$* refers to.US dollars. {Note: delete this sentence if a second $ currency is referred to in'the text, e.g., NZS. Then any reference to § must include the appropriate modifier, e.g.. USS, NZS.}CONTENTS {BASIC DATA} {MAP} PROJECT (OR PROGRAM} DESCRIPTION EVALUATION OF IMPLEMENTATION Project (or Program} Components Implementation Arrangements Project (or Program} Costs Project {or Program} Schedule Engagement of Consultants, and Procurement of Goods and Services Performance of Consultants, Contractors, and Suppliers, Conditions and Covenants Disbursements Environmental and Social Impacts Performance of the Borrower and the Executing Agency Performance of the Asian Development Bank EVALUATION OF INITIAL PERFORMANCE AND BENEFITS A. Financial Performance B. Economic Performance C. Attainment of Benefits Aer TOMmMoow> IV. THE TECHNICAL ASSISTANCE V. CONCLUSIONS AND RECOMMENDATIONS A. Conclusions B. Lessons Leamed C.— Recommendations {APPENDIXES} ‘To automatically update the Contents page (lace the cursor an tne Contents page, (@) press F9, end click on Update entire table. HAAR A A RRO OHBUNNNNNNSBASIC DATA ‘Loan Identification 2p Negpene Country Loan Number Project {F ‘agram Title Borrower Executing Agency Amount af Loan’ {Give SF joan in SDR} Project Completion Report Number oan Data ‘Appraisal ~ Date Started = Date Completed Loan Negotiations Date Stared Date Completed Date of Board Approval Date of Loan Agreement Date of Loan Effectiveness In Loan Agreement Actual = Number of Extensions Closing Date In Loan Agreement Actual Number of Extensions Terms of Loan = Interest Rate = Maturity (number of years) ~ Grace Period (number of years) Terms of Relending (if any) ~ Interest Rate = Maturity (number of years) ~ Grace Period (number of years) ~ Second-Step Borrower * Disbursements a _Dates Thitial Di Effective Date Original Closing Date ed OKb. Amount (6 Category Last Net or Original Revised Amount © Amount Amount —_Undisbursed Subloan Allocation _Allocation _Canceled __Available__ Disbursed ___Balance Total 10. Local Costs (Financed) = Amount (US Dollars) = Percent of Local Costs, = Percent of Total Cost €. Project {Program} Data 1. Project {Pogram} Cost (S Cost Appraisal Estimate Actual Foreign Exchange Cost Local Currency Cost Total 2. Financing Pian (S ‘Appraisal Estimate ‘Actual Cost Foreign Local Total _—Foreign Local _‘Total Implementation Costs Borrower-Financed ‘ADB-Financed (Other External Financing Total IDC Costs Borrower-Financed ADB-Financec Other External Financing Total ‘ADB = Asian Development Bank, IDC = interest during constuction.2.__ Cost Sreakdown by Project {Program} Component ($, ‘Appraisal Estimate Actual Cost Foreign Local __‘Total_—‘Foreign —Local__—_—‘Total Total 4, Project (F-ogram} Schedule item ‘Appraisal Estimate ‘Actual Date of Contract with Consultants Completion of Engineering Designs Civil Works Contract Date of Award Completion of Work Equipment and Supplies Dates First Procurement Last Procurement ‘Completion of Equipment installation ‘Start of Operations ‘Completion of Tests and Commissioning Beginning of Star-Up Other Milestones? “FTimare than one, show detes or each contact ‘Show key events not ised above, parcularly for projects with elements not involving construction or supply of materiais and equipment. Data on Asian Development Bank Missions. No. of. No. of ‘Specialization of Name of Mission® Date Perséns _Person-Days Members” Note: "Include identicaton, fac:-inding. preappraisal, aporaisal, project (program) Inception, review, special loan ‘administration. disbursement. project (program review mission. more than one of each type of mission, number ‘consecutively as Review Nission 1,2, etc. ° May use reierencs letters in table, e.g. a - engineer, b - financial analyst, c - counsel, d - economist, © - procurement consultent or specialist, f- contro afcer g- programs officer.| PROJECT {OR PROGRAM} DESCRIPTION (insert regon te:2., Number new paragraphs using the ParaNum facility on the Reports (one enter) before each head.’ Please read the footnotes.*} ), 3. (Directions ‘or text: PCRs can be briet—8 pages—or detailed—up to 15 pages. In a brief PCR, minimize historical and descriptive analyses, and when evaluating implementation only discuss matters where changes have occurred. Limit the appendixes included in either type of PCR to those considered essential to expiain the text} text, click on the (i), buttons on the Reports tooibar.} 4. {Under project (orogram) description include (i) objectives and components, and (i) the rationale for undertaking the project (program). Do not include a detailed exposition of the findings and analyses contained in the report and recommendation of the President (RRP), but refer to the relevant REP sections. Similarly, use the statement of objectives, description, and scope given in the RRP, and where possible, make cross-references to the RRP to avoid repetitive narratives. Discuss historical aspects of the project (program) in a brief tabular format} Ml, EVALUATION OF IMPLEMENTATION 5. {Deal with the following topics selectively. Discuss areas where the change during implementation was not significant in one short paragraph or make suitable cross-references to the RRP} A. Project {or Program} Components 6. __ {Discuss the components as anticipated during appraisal; give reasons for any major modifications mace during implementation; and indicate whether and to what extent such modifications hac an impact on cost, ime schedule, and expected benefits.) 7. {Insert additional levels of heads as required using the Reports toolbar.) 1. {Insert Level 3 Head} a {Insert Level 4 Head} i. {Insert Level 5 Head} i, {insert Level 5 Head) . iii, {Insert Level 5 Head} 1 (Begin your footnote txt hee. The font sizes Al 9 pont. A hanging indents setfor you in this template} ? {Begin your second iootncie here. Footnotes are numbered sequential throughout the main text. Do not place a line space between fotnates,}{inser Level 4 Head} a {Insert Level 3 Head} B. Implementation Arrangements 8 (Discuss ine imaiementation arrangements as designed at appraisal, and any major changes made necessary in these arrangements by changes in project (program) components.} C. Project {or Program} Costs 9. {Discuss costs and explain significant overruns or undemuns (in a tabular form, by year, currency, and mejor components and/or categories) and any major shifts between foreign and local cosis. State the reasons for cost changes and their ikely effects on the economic and financial rates of -etumn. In assessing actual costs, determine the relationship between different currencies on a basis consistent with that given in the RRP} D. Project {or Program} Schedule 10. {Expiain the cavses of significant delays in completing the projéct (program), referring to discussions in otner paragraphs (e.g.. those dealing with procurement or performance of contractors) that give reasons that could, or did, contribute to the delays.} E. Engagement of Consultants, and Procurement of Goods and Services 41. (Discuss arrangements for consultants, any deviations from agreed procedures, and the causes of disagreements between the borrower andior executing agency (EA) and the Asian Development Sank (ADB) on consultant selection, and state the manner in which differences were resolved, Describe any significant problems encountered with the packaging of contracts, preparation of tencer documents, and/or evaluation of bids. State how they were resolved.) F, Performance of Consultants, Contractors, and Suppliers 12, {if any of the consultants, contractors, or suppliers failed to perform in accordance with the terms of the contracts or in accordance with recognized performance standards, describe the nature of such failure and estimate its effect, if any, on the quality of the completed installation, the schedule, and/or costs. Do not mention the names of consulting or contracting firms. if necessary, for ciariy, their country of origin may be given.} G. Conditions and Covenants 13. {Explain the causes of any significant delays in meeting the conditions of effectiveness, with particular attention to procedural problems in the borrower's country that may similarly affect other projects (programs).} 14. {Indicate ‘he status of compliance with all general and special covenants. Where covenant compliance was delayed or breached, discuss the reasons and impact, and whether the covenant we 15. {Indicate # any covenant was modified, suspended, or waived altogether, and the justification for such actions, Where relevant, financial analysis of the EA and a comparison ofuncertaken ‘o check compliance with financial covenants. This section of the compliance of the borrower and EA with reporting requirements. tization Detween the borrower and EA and conversion of loan to financial ratios => should incluge a Any relevant ch equity should b: 16. (Assess sustainability.) msequences of noncompliance with any major covenants on H. Disbursements were not in accordance with the schedule made at appraisal, assess the circumstances of delays and the corrective actions taken by the borrower/EA and ADB. if imprest funds arz/or statement of expenditures is used, evaluate the impact (negative or positive) of these =rocedures cn implementation and the experience of the EA/ADB.} 1. Environmental and Social Impacts 18. (Provide = general assessment of the significant environmental and sociocultural impacts generate: curirg imoiementation, particularly with reference to issues considered at the time of appraisci. Evaluate the implementation effectiveness of any environmental control measures) J. Performance of the Borrower and the Executing Agency 19. (Summarize the performance of the borrower and EA in meeting the responsibilities assigned in the implementation plan, and discuss any weaknesses in performance that were observed. Indicate i the RRP's assessment of the EA's capabilities was reasonably accurate.) 20. {Assess the present institutional capabilities and development of the EA, including spectic strengtts anc weaknesses, and whether institutional developmentstrengthening measures envisezed at appraisal were adequate or successful} K. Performance of the Asian Development Bank 21. (Review A3B's part in implementation (e.g., approvals, disbursements, and monitoring) to determine whether any ADB failure to act promptly or disagreements with the borrower or EA on the terms of reference, bid documents, awards, or other matters, affected the implementation procedures, costs, or implementation schedule. Note ifthe effects are not significant or do not permit generalize corciusions, but in these cases, do not include an analysis or detailed discussion.) Mi), EVALUATION OF INITIAL PERFORMANCE AND BENEFITS. A. Financial Performance 22. {Conduc: financial evaluation, unless no meaningful data are available from the initial operation. If no fiancial analysis was completed, retain this head and explain why the analysis was not completes}B. Economic Performance 23. Where reevaluation } pessibie, conduct the economic reevaluation concurrently with the financial C. Attainment of Benefits 24. ibe the initial operation of the project (program) and attainment of the expected benefit: drawing upon the indicators in the logical framework wherever available.) IV, THE TECHNICAL ASSISTANCE 28. {Briefly e ‘echnical assistance (TA) attached to the loan but not evaluated in a Separate TA ccmpletion report (TCR) here, or as chapter Ill (with subsequent chapters renumbered). Ths broad TCR format, ie., objectives and scope, inputs, and evaluation of licwed, and the text should not exceed two pages in length. If a separate cite it in the text, or if necessary, include it as an appendix} V. CONCLUSIONS AND RECOMMENDATIONS be (in’one or two short paragraphs) whether the project (or program) was implemented as conczived, and if not, explain the difficuties encountered and remedial measures undertaken. Analyze the logical framework and benefit monitoring and evaluation, and provide an overall performance rating. Classify the project (program) as highly successful, Successful, less than successful, or unsuccessful using the definitions provided by the Operations Evaluation Office} B. Lessons Learned 27. {Summarize all major lessons feamed clearly and concisely, Use these to form the basis of various recommencations in the Recommendations section.} ©. Recommendations 28. _ {Include to types of recommendations: ()) project (program)-related; and (ji) general.) 1. Project (or Program) Related 29. {Always discuss the six items listed here in the PCR, and make recommendations where appropriate. Briety refer to actions that have been or are being taken on these issues.} Recommendations relating to the project (program) should include the following: @ ure Monitoring. Describe the aspects of operation (technical, financial, ecznomic, environmental, social, personnel, management, etc.) that currently ire monitoring and what monitoring tools are recommended (specified by the borrower/EA, missions, consultants, etc.), and recommend review intervals for the project (program). (i) Covsnants. Recommend ‘whether the covenants in the loan and project (prcgram) agreements should be maintained in theit existing form, indicating the cific period to maintain such covenants or whether any of them should be(i) ww) Ww) (wi) 2 30. {Include a: chowged or waived, indicating the specific covenants and the substance or ig 2f any change recommended. sr Action or Follow-Up. Indicate action that may be needed to complete pre 2ct_ (program) implementation (including action needed to complete rsemients and close the loan account), its initial operation, or the ferent of project (program) benefits. joncl Assistance. Indicate any additional assistance under new financing arrangements (TA or joan assistance) that may be required to substantially imsrove the project's (programs) performance. Timing of Preparation of the Project (Program) Performance Audit Report. Inc’zate the appropriate timing for preparation of the report. In exceptional cases (for example, where some works have stil be to be completed or where smental assistance may be proposed, or to allow some time for operations tle down, the audit report should not be undertaken before a certain date. = reasons for proposing such deferment. -tmine if the immediate development objectives were met} General ‘ecommendations that do not relate specifically to the project (program), but are generally app’ zable to ADB policies, procedures, and practices.)APPENDIXES Number Title Page Cited on (page. para.) {1} flnser Title of Appendix 1} ‘ Oe (2) {inser Title of Appendix 2} 6 8.8 {8} {insert Tile of Appendix 3} oe 8 (4) (insert “itl of Appendix 4} cy 8 {5) {Insert “itle of Appendix 5} @ 8.8 {6} _ {Insert Title of Appendix 6} a ), {7} {Insert Title of Appendix 7} cd £4, {8) {Insert Tile of Appendix 8} 6 68 {9} {Insert Title of Appendix 9} e 8 {10} {insert “tie of Appendix 10} 8 8 {11} {insert Title of Appendix 11} ad oF, {12} {Insert Title of Appendix 12} ca 8, SUPPLEMENTARY APPENDIXES {available on request) {A} __ {insert Title of Supplementary Appendix A} {B} {Insert Title of Supplementary Appendix B} {C} {Insert Title of Supplementary Appendix C}Appendix 1 page 1 PROJECT {OR PROGRAM} FRAMEWORK Desi ‘Summary _ Performance Indicators/Targets ‘Monitoring ‘Assumptions Goal | Mechanisms | and Risks | Purpose ‘Outputs ‘Activities inputs "To combleie the Fammeork, 56g by pening a copy of these insuuctons. 1 ‘The framework is developed a5 2 table. To inser rows or adjust column width follow the instructions included in Appendix 2. withthe Cost Estimates table 2. Ifyou require addtional pages for your framework, then complete the inputting of the framework until you have as many pages 2s you need. You will note that the headers wil aulomstically appear on each page of the framework. The centre! page numer does not need to be adjusted. The fush right page number may need to be adjusted ifit does not ccate “page 1” n the frst page of the appends, 3. To adjust the “sh right page number, compete the fotowing steps: (Place the cursor onthe first page ofthe framework. (i). Click the View menu, then choose Header and Footer. (i) Bo either of the folowing: Technique 1 (@) Click tne Tools menu, then choose Options. Ciick the View tab, click inthe box beside Field Codes, and sick the OK button. (©) You wi see the folowing code: {=(PAGE}3} where {PAGE} is the document page number and 3 isthe number sublacted from the document page number to make the formula field qual to 1. Change the number 3 to any number that will make the field equal to 1, ie. the ocument page number is 10, then insert 9 in the formula to produce page 1. {c) ‘Sick the Tools menu, then choose Options. Click the View tab, disable the Field Codes option, and click the OK button. Techaique 2 (a) “ighight the aopendix page number. to) at on the highighted appendix page number, then cick Toggle Field Codes. You will the foliowng code: (=(PAGE}3} where {PAGE} is the document page number and 3 is ‘ne number subtracted from the document page number to make the formula field equal to 1. Shange the number 3 to any aumber that wil make the feld equal to 4, i.e, if the document ‘age number's 10, then insert 9 in the formula to produce page 1. {c) “igniégnt the entre Feld, Pigh-dick onthe highlighted field then cick Toggle Field Codes. For assistance or demonstration of this framework, please call Ruby Razon, 4918, or any of the secretariat officers (editing).8 Appendix 2 page 1 {INSERT APPENDIX TITLE} To insert paragrar numbers, click the Appendix menu, then click the appropriate number of your appendix ar the first paragraph number will appear on your appendix page. For subsequent parac'29h aumbers, press Ct! Alt (appendix number). To insert additione appendixes, insert a section break by clicking the Insert menu, cick Break, then select Next page under Section Break. ‘To add the appencix and page number running head, () Place the cursor in the new appendix. (i) Clic: on View, select Header and Footer. Make sure you disable the "same as previous" button on the Header and Footer toolbar. (ii) Highiight and copy the appendix number and page number, i.e., Appendix 3, ac? 1, from an existing appendix to the new appendix. (iv) Edi the appendix.page number as described in step 3 of the instructions in the logical framework appendix. ‘To move an appendix, create a new appendix at the desired location. Highlight the text to be Moved (do not include section breaks). Click the Edit menu then choose Cut. Move the cursor to the new appenc’, then click the Edit menu and choose Paste.Appendix 3, page 1 STATUS OF COMPLIANCE WITH LOAN COVENANTS Covenant | | intoan | Agreement | Reference | | ‘Status of Compliance10 Appendix 4 {Insert APPENDIX TITLE or Table Title} {($000)} Foreign Local Total item. Exchange Currency Cost ‘A. {item 7) 1. {Component ~.7} a. (Subcom wnent A.1.a} i, (Point +.1.2.) 00 0.0 0.0 i, (Point 5.1.a.i) 0.9 0 00 b,_{Subcomp:nent A.1.b} 2, {Component +2} 0.0 0.0 0.0 3. {Component +3} a. {Subcomp>nent A.3.a} 0.0 0.0 0.0 b._{Subcomp nent A.3.b} 0.0 0.0 0.0 4. {Component = 4} 0.0 0.0 0.0 ‘Subtotal (A) 0.0 0.0 0 B. {item 2} 1. {Component 0.0 0.0 0.0 2. {Component ; a. {Subcompanent B.2.a} 0.0 0.0 0.0 b,_{Sudcompanent B.2.b} 0.0 0.0 0.0 3. {Component £.3} 0.0 0.0 0.0 ‘Subtotal (8) 00 0.0 0.0 C. {item 3) 4. {Component ©.1} 0.0 0.0 00 2. {Component ©.2} 00 0.0 0.0 Subtotal (C) 0.9 0.9 0.0 Total 0.0 0.0 0.9 Define symbols and abbre tons, eg. —= not avaliable} {Notes and footnotes, if am, are next.) Source: (Staff estimaies,} To complete the tale ~ @ Use 0 to inc:zate magnitude 0. (i) Increase the number of heads (A., B.) if funding will be provided from additional sources, (li) Use superset 2, b,c, etc. rather than numbers for footnotes; the footnote function cannot be used within tie teble (iv) To inser’ 2 Tab character in the table, press Ctrl+Tab. (W) To chafige 2 wiath of any column, hold the Shift key, point the mouse cursor on the right border of the column, and drag the mouse to the left or right. (vi) To move anzmoer to the next ine within @ cell, piace the cursor before the number then hold the Shift key ar~ press Enter. (vi). To insert en2w row, select a row, and click on Table—Insert Rows (the new row will be inserted above the cw selected); oF place the cursor at the end of the row (it should appear outside the last column} and then press Enter (the new row will be inserted below), (vii) To delete a r>w(s), select the entire row(s), cick on the Table menu, and click on Delete Rows.ASIAN DEVELOPMENT BANK (CHECKLIST FOR REVIEWING AUDITED PROJECT ACCOUNTSIAUDITED FINANCIAL STATEMENTS ‘SUBMITTED BY EAS/BORROWERS (To be completed by ADB staff) ‘A. Timeliness/Accounting and Auditing Standards 7] Was th aul open received wit he pened V TW] WR Remarks | 7 | covenamea?: Refer tote LN and tar | |__| vi’Se0: 28 ofie GPP | Z| Has the audior ndicaled tha Te audi was conducted in acordance with generaty accented aug sancards? Wh regard | revenue caring EAs/BoroWes, co. the francial statements inccate wheter generaly | accepted accounting pancbls were sppied? | (Refer tothe LX, and to Pat Vil Sec. 3.2 of | the georay ier B.___Opinion/Findings YIN Remarks 1 | Does the audit report include an opinion as | required by the Bank on the: ‘utilization of oan funds? ‘compliance with speciic covenants? se of morest funds? statement of expenditure procedures? Conformity with ADB's procurement guidelines? (Refer to the LA’, Sec. 7.01 and Annex 3 of the GPPFA") — In adattion, with regard to revenue earning EAs/Bortowers, does the audit report inciude {an opinion cavering al the applicable rancial statements. (Refer io the LA", and to Part Vill, Sec. 2.3 and 3.1 of the GPPFA) { 7] Sete tate TET toataede Ata en poets ent Seoslon Bears SAS | Seoetacs oad Sore | sf + fet erenton tins Cees olan” wlth ores «ems eens tra soot an Soe coy ors «St toad ase men Sonar) | J. Speen nts by a at See tae Deals} | attention. | + Bue song enor: Sunt rcenclactoe | 2 ware ts See | disse ea yar Spa fc debts, recelvables, unrecorded liabilities, | & | = Others (Refer to the LA”, and to Part Vill, Sec. 10. of the GPPFA") LA~ Loan Agreement CGPPFA ~ Guidetines for reparation and Presentation of Financial Analysisao See Sareea ae || mera oes sate | for weaknesses in the accounting system or | | ee mere es | =o ee eae nee eee ane aer| Sere ies | pre hp eee GPPFA‘) 7 A oe | previous years been resolved satisfactoriy by the EA? (Please ist separately ll outstancing audit fnéingsirecommendations as of the end Of the previous year, and indicate on each finding whether or not it has been resolved by | the EA during the current review periog.) | Conclusion and Further Action (ifany) I Indicate conclusion reached by reviewer. Tndicals ary folow-up action nesded (immediately or during next mission) repared Endorsed by: Approved yy Note: In case of revenue-eaming EA's, the Project Office will continue to make use of the financial statement in the manner currently used which may include computation of ratios, such as: debt to equity ratio; collection ratios: term lending infection ratios. “The above questionnaire is meantb serve asa guide for he projet visions. They may modi suitably for their specic needs. LA -Loan Ageement (GPPFA ~ Goidetines fr Preparation and Presentation of Financial Analysis,AUDIT COMPLETION CHECKLIST (To be completed by Extemal Auditor of Non-Revenue and Revenue Eaming EA/Borrower ‘and returned with the auditor's report) CHECKLIST OF ITEMS TO BE REPORTED TO ADB A.___Accounting/Auditing Standards [ T [YES NO WAT Ref. [Ta Was the ack conaiced W actorianee wit generaly wczeied | auciing standards? For revenue earing EASBorowers, co the | | financial satements incicate wheter generaly accepted accounting | | prnapes wom sped on 6 bes costo with at of fe | | rocading eet B.___ Opinion/Findings [2] Does your auait report include an opinion as required by the Sank | on the: ‘= utllzaon of oan funds? compliance with specific covenants? use of imprest funds? ‘statement of expenditure procedures? conformity with ADB's procurement guidetines? (Splting of ‘payments to avoid ADB approval thresholds) In addition, for revenue eaming EAs/Borowers, does your audit Feport indude an opinion covering all the applicable financial statements? ‘3 | Ave significant findings inciuded in detail such as * uilizaton of loan proceeds (eg. diversion of ADB funds, utlizaton for aspects where counterpart funds should have been used, et.) ‘+ project implementation (delays, bottlenecks, procedural lapses: in procurement tothe extent comes to your attention) ‘+ statement of expenditures [also refer to Section WAS(b) ofthis checklist, “+ imprest fund [also refer to Secions UAT(b) and AS(c) ofthis checkist. ‘© agreed upon matters by the Bank and Borrower that require ‘special aut attention. + for revenue eaming —_ENBorrower, significant increasesidecreases in balances in financial statements between pastipresent fiscal year, significant bad debis, ‘unrecorded liabiies, etc. + others 4. | Did your aud exmine he efeney of ste of reral conto | if s0, does your audit report disdose any material deficiencies or weaknesses inthe accounting sytem of overall system of intemal | eons(CHECKLIST OF AUDIT PROCEDURES THAT WERE PERFORMED A ADB Project Funds 1.___Ubiization of ADB funds, ‘Ware ADE funds ofitzed tr the purpose as indicated ih the Toan ‘agreement? YES TNO THA Were ADB funds, meudng wihtravals Wom imprest account, used against aspects meant tobe funded out of counterpart funds? 2 Bank Account TL YES [NO Where applicable, were funds received fom diferent sources Kept in diferent cash books and bank accounts (eg. ADB fund kept Separately from counterar funds) Was reconciliation of balances per cash book and per bank account Performed regulary, including the imprest account? Was bank balance independenty checked by the auctor? Ts the Dank account maintained the name ofthe insiiuion and nat in a personal name? Is separate bank account maintained in the name of any offcials in additon to the above? If so, has any ‘withdrawal been made for credit to the above account? Were checks Kept in sequential order and were any missing checks reported to the Project ManagerDirector? Was action taken on stale checks? 3.___ Procurement YES_[ NO [NA ] Was Iiomatonal Competiive Biddingliniemational Shopping/Local Competitive Bidding/Direct Purchase or Single TenderfLimited “Tendering or Repeat OrderForce Account folowed as per ADB's guidelines? : Was approval oblained rom ADE for various procurement, whenever required? Was contrect split i avoid prior approval fom ADB? Th regard supplementary coniracis), was price allowed signfcanty higher than that in the orginalmain contract? Hf} * Payments authorized by EA/Borrower. YES_[ NO. WA Were expenditures preparedsigned by Project Accountant and ‘authorized by Project Manager/Director or the designated staf”? Indicate any finding based on review of propriety of exenditure ‘Where applicable, were payments Clamed in running bil reconcied 1 the measurement 500k? ‘Where applicable, was there any monitoring mechanism for ensuring the full recovery of mabllzation advance? S.__ Withdrawal Apaication TYES [NO [NA Were withcrawal applications submited in anticipation oF expenditure? in case of dams under SOE, were amounis spit 10 avoid ‘submission of supporting documents. i { Was request for imprest account (replenishmentfrst request) submited when the need for funds would aise much later? Ea8. _ BORROWER'S FINANCIAL STATEMENTS {This section to be completed by External Aucitor of Revenue Eaming EA/Borrower only) 1.___Batance Sheet - Fixed Assets T YES NO. Wa Ware the calegonzalion and analysis of asses epreseniaive ofthe enitys interest and activites, 2.9. = Land? + Buildings? + Equipment, machinery? |n_veweme [ Ras Bien emer Son | Was there 2 schedule attached of gross ted assets, ‘accumulated depreciation provision and net fixed assets: + Inoperation? + Notin operation? Was there a schedule attached for changes in asset holdings in year, conceming + Sales? + Revaluations, and basis for it? ‘= _Changes in depreciation provision? ‘Was accumulated depreciation shown wih depredalion Fates and basis of calculation in supporting schedules? Ware disclosures made of assets + Leased out? + Pledged? Th cases of revaluation Of fred assets andlor restaloments oF foreign long-term debt, was suficient information provided to reconstruct both sides ofthe revaluation entries? 2. Balance Sheet - Current Assets YES NO, Was the ial of current assols revealed? ‘Was there an adequate analysis of curentassels, eg. Prepaid expenses? Deposiors on contracts? Receivables? Inventories? Marketable secures? ‘Short-tean bank deposits? Cash - at banks? Cash-in hand? Were receivables adequately analyzed, aged and Classiied between key classes of debtors? ‘+ Where practical, were accounts receivable confirmed and appropriate folow-up steps taken, including second requests ‘and aitemative procedures. ‘+ Ifa signifcant number and amount of accounts receivable were ‘ot confimed, were other appropriate auditing procedures performed.| Did marketable secures exclude medumvong-enm investments? TS TS TB SAE BT FT esd nr ton? ] | Were pyc ees GNGT wo BOO Wie TOT rawr oc? | were me py inventany is kon ata dte otter tan he | Dane ahs Gt ear craven soeactans Detcan emo eae de Danch et ae Were there adequate tests of (a) clerical accuracy ofthe inventory; (0) costing methods and substantiation of costs used in pricing all elements ofthe inventory; and (c) purchase cut-off (goods in tansit at the balance sheet date are recorded in the proper accounting Perio) Were analyical procedures used to test the overall valuation of Inventories? Wes there a suitable analysis among: + Manufactures’ product for sale? ‘+ Materials “and goods for incorporation in manufacturing progress? *+ Materials and goods for maintenance? | + Worcin-progress? Indicate the basis of valuation? 3.___ Balance Sheet - investments and Other Assets WA ‘Were investments detaled in supporing schedules, with basis ‘of valuaton, revaluation, losses and yields? Ware defered charges and preoperaing expenses shown with ‘amortization rates and accumulated amortization, where aporooviate? ‘Were good or intangibles shown with valuation basis? 4.___Balance Sheet -Equity WA Was there a adequate anaivas of equ. 63 T ‘Authorized capita? Paidicopital? ‘Share premiums? ‘Shares outstanding? Government or other pubic authority contibutions? ‘Surpluses from ‘Appropriate earings? UUnappropriated earings? evaluations? [Ra BSEE SaEne oT sans aH?5,___Balance Sheet - Long Term Debt | Were Guten Waturties exuded and shown as catent lapiities? Were all amounts Gue and payable Sut sol repad Ww lenders disclosed? % | Was there a comprenensive schedule of long-term debt, | showing, among other things, for each outstanding loan: | + original amount bomowed? Interest rate, grace and repayment period and other relevant terms, (e.g, secuted debt)? ‘+ Currency in which debt i repayable and conversion rates, if applicable, at date of borrowing and current? + Gross amount outstanding and curent currency conversion, if applicable. ‘+ Longeterm debt transactions in year? = Curent matures? + Maturities due and pavable, but not maid? s.__ Balance Sheet_- Current Liabilities YES [NO “a | Was Total of current labilbes shown and sutably analyzed, eg. ‘Current matures of long-term debt? Short-term borrowings? ‘Consumer deposis? Taxes due? ‘Accounts payable? ‘manufacturing or process? maintenance? 1+ _Acerved and other tables? 7.__Balance Sheet - Other Liabilities Yes [Ne WA =| Were relevant other (abilies adequately descibed and analyzed, inciuding such matters as: ‘+ Pensions and other Employee Benefits? + Deferred Taxation? Were the analysis of the foregoing and the format of the balance sheet items in accordance wit sound accounting practices? Were contingent liaifies and pledges disciosed?” ale Were reserve funds (eg. pension funds), adequately classifed, explained and legally utlized and provide for? Were any suspense accounts fully explained? i. ] Was there an adequate desenpton of verification procedures for fixed and movable asseis and inventories? ‘Was a statement of adequacy of insurance required?” id the auditor perform an adequate search for unrecorded labios?8.___income Statement 1 Yee The TNA [27 Bathe conamcion of te Tevenus, expenditure and other ev, | tems of tis statement anc supporing data provse satisfactory i | i | financial evidence of the resulls of actviies conducted by the | | entty? Lo ! o[big the Saterent prove Saisical Gata on sas oF omer) | periommance: ; 4] i i + Manufacturing cots? i | Sales costs? | | 2 Operating costs? | + Maintenance costs? | + Administration costs? | + Deprecation? | + Nonoperting income (analyzed)? {Amortzaton of Geferred charges, ote? | I { @ ‘Were unusual items clearly shown, €.9.. | | + exchange gins orosses? | | 1 Proftortsses onsale of assets? | | + Profits or losses fom adjustments made to reflect | 1 changing prices andor inion? | | Did fhe watement indude any Wem rWaing to otter Tacal 1 years (eg: ror-year adjustments). and ar these separated | ‘fom the report year? | e ‘Was the net income relating to the fiscal year’s operations 1 clearly demonstrated before inclusion of other items, as in (c) or (€) above? | 7] Was the alocaion of Net income Geary demonstrated? | | Bid he autor considera) the enkiys revenue recognition powcy, and (b) unusual ransacéons 9. Statement of Sources and Applleations or Funds [yes"[ NOT WA a | Bi the satoment provide & Gear Gescipion of the Tow of funes? [Bid he wansacons shown te back Be Income Statomert and "Balonce Sheet, with appropriate reconciiatons necessary? ‘Approved by: External Audiior22 1X. PROJECT MONITORING AND EVALUATION ‘A. Project Performance Monitoring 60. The PMU will establish, within six months of loan ‘effectiveness, @ project monitoring and evaluation system based on benchmarks and indicators given in the project framework. Prior to completion of the Project, the accumulated database relating to benchmarks and indicators will be transferred to DTCI as part of its MSE policy function, 61. _ A comprehensive review of the Project will be carried out by the Government and the ADB at the end of the second year of project implementation or at a mutually agreed time. The midterm review will evaluate project progress, benefit monitoring and evaluation, and implementation arrangements. it will identify weaknesses, if any, in the Project design and its implementation, and will recommend remedial measures if required. 62. During Bank review missions, achievement of scheduled targets will be assessed23 LOAN AGREEMENTI/COVENANTS A. Loan Agreement/Covenants 63. The Government has given specific assurances that have been incorporated in the loan agreement. A copy of the loan agreement is provided under this section (Attachment 14). The table format on compliance with loan covenants is attached at the ‘end of this Section (Attachment 15) and should form part of the quarterly progress report to be submitted by the PMU.Attachment 14 LOAN NUMBER 1785 SAM (SF) LOAN AGREEMENT (Gpecial Operations) (Small Business Development Project) between INDEPENDENT STATE OF SAMOA and ASIAN DEVELOPMENT BANK DATED 6 MARCH 2001 LAS:SAM 33167LOAN AGREEMENT (Special Operations) LOAN AGREEMENT dated § March 2001 between the INDEPENDENT STATE OF SAMOA (hereinafter called the Scrrower) anc the ASIAN DEVELOPMENT SANK (hereinafter called the Bank). WHEREAS (A) _the Borrower has applied to the Bank for a loan for the purposes of the Project described in Schedule 1 to this Loan Agreement, (®) the Govemment of the Borrower (hereinafter called the Government) hhas also appiied to the Bank for advisory technical assistance for Capacity Building of Financial and Business Advisory Intermediaries, and the Bank has agreed to provide 3 technical assistance grant to the Govemment for this purpose in an aggregate amount ‘equivalent to five hundred thousand dollars ($500,000); and (C)__ the Bank has agreed to make a joan tb the Borrower from the Bank's ‘Special Funds resources upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto agree as follows: ARTICLE| Loan Regulations; Definitions Section 1.01. All the provisions of the Special Operations Loan Regulations of the Bank, dated 7 December 1982, are hereby made applicable to this Loan Agreement with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said Special Operations Loan Regulations 2s ‘so modified being hereinafter called the Loan Regulations): (@) Section 2.01(17) is deleted and the following is substituted therefor: 17. The tefm “dollar” or “dollars” or the sign "S" means dollar or dollars in the currency of the United States of America. (b) Section 2.01(27) is deleted and the following is substituted therefor 27. The term “interest charge” means a charge made on the Loan pursuant to Section 3.02, and includes a portion to cover administrative expenses and a portion that does not. (c) The term “service charge” wherever it appears in the Loan Regulations shall be substituted by the term “interest charge”.(@) Section 4.05 is deleted anc Sections 4.28, renumbered as Section 4.05, 4.06 and 4.07, respectively. {e) _ Section 5.02 is deleted and Secions 5.03, 5.04, are renumbered as Sections 5.02, 5.03, 5.04, 5.05 and 5.06, respectively () The renumbered Section 5.02 is deleted and the following is substituted therefor: Application for Withdrawal. When the Sorrower shall desire to withdraw any amount ftom the Loan Account, the Borrower shall deliver to the Bank an application in such form and containing such statements and agreements, as the Bank shail reasonably request. Except as the Sank and the Borrower shall otherwise agree, applications for withdrawal, with the necessary documentation as hereinafter in this Article provided, shall be made promptly in relation to expenditures for the Project, (g) Section 8.03 is deleted and the following is substituted therefor. Cancellation by the Bank. If () the right of the Borrower to make withdrawals from the Loan Account shall have been suspended with respect to any amount of the Loan for a continuous period of thiny (30) days, or (i) at any time the 2ank determines, after consuttation with the Borrower, that any amount of the Loan will not be required for the purposes of the Project, or (i) at any ime the Bank determines, with respect to ‘any contract to be financed out of the proceeds of the Loan, that comupt of fraudulent practices were engaged in by representatives of the Borrower or of a beneficiary of the Loan during the procurementiconsuttant selection or the execution of such contract, without the Borrower having taken timely and appropriate action satisfactory to the Bank to remedy the situation, or (jv) at any time, the Bank determines that the procurement of any contract tobe financed out of the proceeds of the Loan is inconsistent with the procedures set forth or referred to in the Loan Agreement, or (v) by the date specified in the Loan Agreement as the closing date for withdrawals an amount of the Loan shall remain unwithdrawn from the Loan Account, the Bank may by notice to the Borrower and the Guarantor, f any, terminate the right of the Borrower to make withdrawals with respect to such amount or contract. Upon the - Giving of such notice, the amount of the Loan or the relevant portion thereof shail be cancelled. (fh) Secticn 8.04 is deleted and Sections 8.05, 8.06 and 8.07 are renumbered as Sections 8.04, 8.05 and 8.06, respectivelyee meanings: ‘Section 1.02. Wherever used in this Loan Agreement, unless the context otherwise requires, the several terms defined in the Loan Regulations have the respective meanings therein set forth, and the following additional terms have the following a) o © © @ o @ o) # o (m) ) ©) "CBS" means the Ceniral Sank of Samoa; “DBS” means the Development Sank of Samoa, established uncer the provisions of the Development Sank Act of 1874 of the Borrower, as ‘amended from time to time; “DICT means the Department of Trade, Commerce and Industry of the Borrower, and includes any successor thereto; “mrprest account’ means the bank account to be established at CBS by the Borrower to receive advance disbursements of the Loan, said ‘account being more particularly described in paragraph 7 of Schedule 3 to this Loan Agreement, “PMU" means the Project Management Unit, being more particularly described in paragraph 3 of Schedule 6 to this Loan Agreement -"Project Executing Agency" for the purposes of, and within the meaning of, the Loan Regulations means TD which is responsible for the carrying out of the Project, “PSC" means the Project Steering Committee, being more particularly described in paragraph 2 of Schedule 6 to this Loan Agreement, “SBDF means the Small Business Development Fund to be established under Part B of the Project *SBEC™ means the Small Business Development Centre established pursuant to a memorandum of understanding dated 6 July 1994 between the Govemments of New Zealand and Samoa and an associated charitable trust created shortly thereafter under the name “Wester Samoa Small Business Enterprise Development Trust; “SBLGS" means the Small Business Loans Guarantee Scheme to be supported and expanded under Part A of the Project: “SCC means the Samoa Chamber of Commerce and Industry; ‘"SMEA" means the Samoa Manufacturers’ and Exporters’ Association; "TD" means the Treasury Department of the Borrower, and includes any successor thereto; “UNDP* means the United Nations Development Programme; and "WIBF" means Women in Business Foundation Incorporated.ARTICLE il The Loan Section 2.01 ‘The Bank agrees to lend to the Sorrower from the Bank's Special Funds resources an amount in various currencies equivaient to Swe million six hundred and ninety-seven thousand Special Drawing Rights (SOR 2,887,900). ‘Section 2.02. (2) The Borower shail pay to the Bank an interest charge at the rate of one percent (1%) per annum during the grace period, and one and one- hhaif percent (1.5%) per annum thereafter, on the amount of the Loan withdrawn from the ‘Loan Account and outstanding from ime to time. (b) The term “grace period” as used in paragraph (a) of this Section means the period prior to payment of the first principal amount of the Loan on the payment date in accordance with the amortization scheduie set forth in Schedule 2 to this Loan Agreement. Section 2.03. The interest charge and any other charge on the Loan shall be payable semiannually on 15 May and 18 November in each year. Section 2.04, (2) Subject to the provisions of paragraphs (b) and (@) below, the Borrower shall repay the principal amount of the Loan withdrawn from the ‘Loan Account in accordance with the amortization schedule set forth in Schedule 2 to this Loan Agreement. (b) if the Bank shall determine, after due consideration by its Board of Directors, that () the Borrower's gross national product per capita (per capita GNP) has exceeded the Bank's per capita GNP operational cutoff in respect of the Bank's Special Funds resources for five consecutive years and (ji) the Borrower has achieved the capacity to borrow from the Bank's ordinary capital resources, the Bank may, by notice to the Borrower, modify the terms of repayment of the Loan by increasing by 100 percent the amount of each maturity due thereafter until the principal amount of the Loan shall have been fully repaid. However, at the request of the Borrower, the Bank may, in lieu of so increasing any such maturity amounts, charge interest, at an annual rate to be agreed between the Borrower and the Bank, on the principal amount of the Loan withdrawn and outstanding from ‘time to time in such a manner and fo such extent 2s to yield the same grant element as ‘would be obtained under the above-siated increase of maturity amounts. (©) iat any time after a modification of the’ lending terms pursuant to the provisions of paragraph (b) above, the Bank shall, ater due consideration by its Board of Direciors, determine that the Borrower's economic condition has deteriorated significantly, the Bank may, at the request of the Borrower, restore the original lending terms with respect to the remaining amount of the Loan withdrawn and outstanding,ARTICLE il Use of Proceeds of the Loan Section 3.01 ‘The Borrower shall cause the proceeds of the Loan tc be appiied to the financing of expenditures on the Project in accordance with the provisions of this Loan Agreement. Section 3.02. ‘The goods and services and other items of expenciture to be financed out of the proceeds of the Loan and the allocation of amounts of the Loan ‘among different categories of such goods and services and other items of expenditure shall be in accordance with the provisions of Schedule 3 to this Loan Agreement, as such ‘Schedule may be amended from time to time by agreement between the Borrower and the Bank, Section 3.03. Except as the Bank may otherwise agree, all goods and services to be financed cut of the proceeds of the Loan shall be procured in accordance with the provisions of Schedule 4 and Schedule 5 to this Loan Agreement The Bank may refuse to finance a contract where goods or services have not been procured under procedures ‘substantially in accordance with those agreed between the Borrower and the Bank or where the terms and conditions of the contract are not satisfactory to the Bank, Section 3.04. Except as the Bank may otherwise agree, the Borrower shall cause all goods and services financed out cf the proceeds of the Loan to be used exclusively in the camying out of the Project. Section 3.05. ‘Withdrawals from the Loan Account in respect of goods and services shall be made only on account of expenditures relating to (@) goods which are produced in and supplied from and services which are supplied from such member countties of the Bank as shall have been specified by the Sank from time to time as eligible sources for procurement, and (©) goods and services which meet such other eligibility requirements as shall have been specified by the Sank from time to time. . Section 3.06. ‘The closing date for withdrawals from the Loan Account for the purposes of Section 8.03 of the Loan Regulations shall be 31 August 2006 or such other date as may from time to time be agreed between the Borrower and the Bank.ARTICLE IV Particular Covenants Section 4.91) (2) The Borrower shall cause the Project to be cartied out with cue diligence and efficiency and in conformity with sound acministrative, financial, environmental and small business practices. (0) __ Inthe carying out of the Project, the Borrower shall perform, or cause to be performed, all obligations set forth in Schedule 6 fo this Loan Agreement. Section 4.02. The Borrower shall make available, promptly as needed, the funds, facilities, services and other resources which are required, in addition to the proceeds of the Loan, for the camying out of the Project Section 4.03. (2) _ Inthe camying out of the Project, the Borrower ‘shall cause competent and qualified consultants. acceptabie to the Borrower and the Bank, to be employed to an extent and upon terms and conditions satisiaciory to the Borrower and. the Bank. (0) The Borrower shall cause the Project to be carried out in accordance with plans and work-schedules acceptable to the Borrower and the Bank. The Borrower shall fumish, or cause to be furnished, to the Bank, promptly after their preparation, such plans ‘and work schedules, and any material modifications subsequently made therein, in such detail as the Bank shall reasonably request. Section 4.04. The Borower shall ensure that the activities of its departments and agencies with respect to the carrying out of the Project are conducted and coordinated in accordance with sound administrative policies and procedures. Section 4.05, (@ The Borrower shall_make arrangements satisfactory to the Bank for insurance of the vehicles, computer equipment and other office ‘equipment acquired out of the proceeds of the Loan to such extent and against such risks and in such amounts 2s shall be consistent with sound practice, (b) Without limiting the generality of the foregoing, the Borrower undertakes to insure, or cause to be insured, the goods to be imported for the Project and to be financed out of the proceeds of the Loan.against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usabie to replace or repair such goods. . ‘Section 4.06, (@) The Borrower shall maintain, or cause to be Inaintained, records and accounts adequate to identify the goods and services and other items of expenciture financed out of the proceeds of the Loan, to cisciose the use thereof in ‘the Project to record the progress ofthe Project (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, the operations and financial condition of the agencies of the Borower responsible for the carrying out of the Project, or any part thereof.(0)__Th2 Somower shall () maintain, or cause to be maintained, separate ‘accounts for the Projec: (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent aucitors whose qualifications, experience and terms of reference are acceptable to the Bank; (il) fumish to the Sank, as.soon as available but in any event not later than six (©) months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (inciuding the auditors’ opinion on the use of the Loan proceeds and compliance with the covenants of this Loan Agreement as well 2s on the use of the procedures for imprest account/statement of expenditures), alin the English language; and (Wv) furish to the Bank such other information ‘conceming such accounts and financial statements and the audit thereof as the Bank shall from time to time reasonably request. (©) The Borrower shail enable the Bank upon the Bank's request, to discuss the Sorrower's financial statements for the Project and its financial affairs related to the Project from time to time with the Borrower's aucitors, and shall authorize and require any representative of such auditors to participate in any such discussions requested by the Bank, provided that any ‘such discussion shall be conducted oniy in the presence of an authorized officer of the Sorrower unless the Borrower shall otherwise agre Section 4.07. (@)__ The Borower shall fumish, or cause to be fumished, to the Bank al! such reports and information 2s the Bank shall reasonably request ‘conceming () the Loan, and the expenditure of the proceeds and maintenance of the service thereof; (jf) the goods’ and services and other items of expenditure financed out of the proceeds of the Loan; (fi) the Project (jv) the administration, operations and financial ‘condition of the agencies of the Borrower responsible for the carrying out of the Project, or ‘any part thereof, (v) financial and economic conditions in the territory of the Borrower and the intemational balance-of-payments position of the Borrower, and (vi) any other matters relating to the purposes of the Loan. (b) Without limiting the generality of the foregoing, the Borrower shall fumish, or cause to be furnished, to the Sank quarterly reports on the carrying out of the Project. Such reports shall be submitted in such form and in such detail and within such a period as the Bank shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the quarter under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expacted progress during the following quarter. (©). Promptly after completion of the Project, but in any event not later than three (3) months thereafter or such later date as may be agreed for this purpose between the Borrower and the Bank, the Sorrower shall prepare and fumish to the Bank a report, in such form and in such detail as the Sank shall reasonably request, on the execution and intial ‘operation of the Project, ‘nciuding its cost, the perfoniance by the Borrower of its obligations under this Lean Agreement and the accomplishment of the purposes of the Loan. Section 4.08. The Borrower shall enable the Bank's representatives to inspect the Project, the goods financed out of the proceeds of the Loan, and any relevant Tecords and documents.‘Section 4.09, The Borrower shall ensure that any scheme, fund or facility funded or assisted under the Project is operated and maintained in accordance with sound administrative, financial, environmental, and business practices. Section 4.10. (@)__Itis the mutual intention of the Borrower and the Bank that no other exterial debt owed a creditor other than the Bank shall have any priority over the Loan by way of a lien on the assets of the Borrower. To that end, the Borrower undertakes (7) that, except as the Bank may otherwise agree, # any lien shall be created on any assets of the Borrower as security for any extemal debt, such lien will nso facto equally and ratably secure the payment of the principal of, and interest charge and any other charge fon, the Loan; and (i) that the Borrower, in creating or permitting the creation of any such lien, will make express provision to that effect. () The provisions of paragraph (a) ofthis Section shall not apply to () any lien created on property, at the time of purchase therecf, solely as security for payment of the purchase price of such property; or (i) any lien arising in the ordinary course of banking transactions and securing @ debt maturing not more than one year after its date. (©) The term “assets of the Borrower” as used in paragraph (a) of this Section includes assets of CBS and any other institution performing the functions of a central bank for the Borrower. ARTICLE V Effectiveness ‘Section 5.01. A date ninety (90) days after the date of this Loan ‘Agreement is specified for the effectiveness of the Loan Agreement for the purposes of Section 8.04 of the Loan Regulations. ARTICLE VI Miscellaneous - Section 6.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.02 of the Loan Regulations. * Section 6.02, ‘The following addresses are specified for the purposes of Section 11.01 of the Loan Regulations: For the Borrower Treasury Department Private Bag Apia, SamoaTelex Number: 233 TREASURY SX Facsimile Numbers: (625) 21312 (685) 24778 For the Bank Asian Development Sank P.O. Box 788 (080 Manila, Philippines Cable Address: ASIANBANK MANILA Telex Numbers: 28086 ADB PH (RCA) 42205 ADB PM (T7) 62567 ADB PN (ETP) Facsimile Numbers: (632) 636-2444 (632) 836-2441. IN WITNESS WHEREOF the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and to be delivered at the principal office of the Bank, as of the day and year first above written. STATE OF SAMOA ‘TUILAEPA SAILELE MALIELEGAO! Prime Minister “Cb £ aA Ladle Chro. Laide Chiro ‘CHINOt 70 SCHEDULE 1 Description of the Project 1 The Project is designed to generate additional income and employment opportunities through enterprise development, with an emphasis on enterprises in the rural sector. The specific objective of the Project is the expansion of the micro- and small enterprise sector through: () improving micro- and small enterprises’ access to credit, and (i) improving micro- and small enterprises’ access to business training and advisory services. 2 ‘The Project is divided into the following Parts: Part A - Small Susiness Loans Guarantee Scheme ‘Support for the expansion of the SBEC’s small business loans guarantee ‘scheme utilizing the existing management framework provided through the ‘SBEC. Part 3 - Small Business Develooment Fund ‘Support for the establishment of a small business development fund at CBS to purchase business advisory and training services from approved business development service providers. art C — Pilot Microfinance Faciitv ‘Support for the launching of a pilot microfinance facilty to be established at CBS and channeled by CBS to DBS directly, and subsequently through DBS to approved paricipating organizations. Part D- Policy and L euistative Environment ‘Support for measures to strengthen aspects of the policy and legislative ‘environment that impact on access to credit by the micro- and small enterprise sector, including through the promotion of the establishment of a credit reference facility Part £ — Venture Capital Fund ‘Support for the establishment of a Samoa venture capital fund aimed at 2 providing capital to micro- and small enterprises. 3. ‘The Project wil also include () the provision of consulting services, in particular to staff the PMU and assist the PMU with its reporting and auditing responsibilities under the Project, and (i) the provision of vehicles, computer equipment, and other office ‘equipment to assist the PMU and the Project implementing agencies in implementing and ‘monitoring the Project 4 ‘The Projects expected to be completed by 28 February 2006." SCHEDULE 2 Amortization Schedule (Small Business Development Project} Date Payment ue Payment of Princival (expressed in Special Drawing Rights)” 415 November 2008 SDR 56,187 415 May 2009 56,187 45 November 2008 : 56,187 15 May 2010 45 November 2010 15 May 2011 15 November 2011 18 May 2012 45 November 2012 15 May 2073 15 November 2013 > 15 May 2074 45 November 2014 56.187 15 May 2015, 56,187 45 November 2015 56,187 15 May 2016 56,187 415 November 2016 56.187 45 May 2017 56,187 45 November 2017 56,187 15 May 2018 56,187 45 November 2018 : 56,187 45 May 2019 56,187 15 November 2018 56,187 45 May 2020 56,187 45 November 2020 56,187 15 May 2021 56,187 15 November 2021 56,187 415 May 2022 56,187 45 November 2022 58,187 + The figures in this column represent SDR equivalents determined as of the respective dates of withdrawal. The arrangements for payment of each maturity are subject to the provisions of Sections 3.04 and:4.03 ofthe Loan Regulations.415 May 2023 415 November 2023, 45 May 2024 15 November 2024 15 May 2025 15 November 2025 45 May 2028 15 November 2025 45 May 2027 45 November 2027 45 May 2028 45 November 2028 45 May 2029 15 November 2029 15 May 2030 45 November 2030 45 May 2031 15 November 2031 15 May 2082 12 (expressed in Special Drawing Rights)" SOR 56,187 56,187 56,187 56,187 56,187 56,187 56,187 56,187 56,187 56,187 187 56,187 56,187 56,187 36,187 56.214 Total SOR ~ 2.697.000 * The figures in this column represent SDR equivalents determined as of the respective dates of withdrawal. The arrangements for payment of each maturity are subject to the provisions of Sections 3.04 and 4.03 of the Loan Regulations.SCHEDULE 3 Allocation and Withdrawal of Loan Proceeds General 1 ‘The table attached to this Schedule sets forth the Categories of goods, services and other items to be financed out of the proceeds of the Loan and the allocation of ‘amounts of the Loan to each such Category (hereinafter called the Table). (Reference to “Category” or “Categories” in this Schedule is to a Category or Categories of the Table and reference to “Subcategory’ or “Subcategories” in this Schedule is to a Subcategory or ‘Subcategories of a Category.) Taxes 2 No withdrawals from the Loan Account shall be made in respect of any local taxes. Percentages of Sank Financing 3. Except a5 the Sank may otherwise agree, the items of the Categories and ‘Subcategories listed’ in the Table shall be financed out of the proceeds of the Loan on the basis of the percentages set forth in the Table. 4, Any contract awarded to a local supplier after effective intemational ‘competitive bidding or international shopping pursuant to the relevant provisions of Schedule 4 to this Loan Agreement shall be financed out of the proceeds of the Loan on the following basis: (2) where the goods procured from a local supplier are manufactured locally, 100 percent of the ex-factory price of the goods supplied (exclusive of any taxes); and (©) Where the goods procured from a local supplier have been entirely imported, 100 percent of the foreign-currency component of the contract price. Interest Charoe 5. ‘The amount allocated to Category 6 is for financing the interest charge on the Loan during the implementation period of the Project. The Bank shall be entitled to withdraw from the Loan Account and pay to itself, on behaff of the Borrower, the amounts required to ‘meet payments, when due, of such interest charge. Reallocation 6. Notwithstanding the allocation of Loan proceeds and the withdrawal percentages set forth in the Table,4 Sched (a) if the amount of the Loan allocated to any Category appears to be insufficient to finance all agreed expenditures in that Category, the Bank may, by notice to the Borrower, (i) reallocate to such Category, to the extent required to meet the estimated shortfall, amounts of the Loan which have been allocated to another Category but, in the opinion of the Bank, are not needed to mest other expenditures, and (i) if such reallocation cannot fully meet the estimated shortfall, rectuce the withdrawal percentage applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made; and (©) if the amount of the Loan then allocated to any Category appears to exceed all agreed expenditures in that Category, the Sank may, by notice to the Sorrower, reallocate such excess amount to any other Category. Imprest Account; Statement of Expenditures 7, (a) Exceptas the Bank may otherwise agree, the Sorrower shall establish, immediately after the Effective Date, an imprest account at CBS. The imprest account shall be established, managed, replenished and liquidated in accorcance with () the Bank's "Loan Disbursement Handbook" dated June 1896, as amended from time to time; (i) the arrangements described in subparagraph (c) below, and (ii) further detailed arrangements to be agreed upon between the Borrower and the Sank. The initial amount to be deposited into ‘the imprest account shall not exceed the equivalent of $250,000 () _ The statement of expenditures (SOE) procedure may be used for reimbursement of eligibie expenditures under the Project and to liquidate/replenish advances provided into the imprest account, in accordance with the Bank’s "Loan Disbursement Handbook" dated June 1858, as amended from time to time, and detailed arrangements agreed upon between the Borrower and the Bank. Any individual payment to be reimbursed. OF liquidated/repienished under the SOE procedure shall not exceed the equivalent of $60,000. {@) _Atthe same time as the Borower estabiishes the imprest account at CBS, the Borrower through TD shall cause four separate imprest fund subsidiary ledgers to ‘be opened. These subsidiary ledgers shall cover () Part A ~ the SBLGS; (i) Part 8 ~ the ‘SBDF; (il) Part C — the pilot microfinance facility, and (W) the establishment and operations of the PMU, respectively. Such subsidiary ledgers shall be used exclusively to record funds coursed from the imprest account for these separate purposes, and shall be reconciled on a monthly basis. Conditions of Withdrawals from Loan Account 8 (2) Notwithstanding any other provision of this Loan Agreement, no ‘withdrawals shall be made from the Loan Account under Parts A, B, C or D of the Project, until the following conditions have been satisfied with regard to the relevant Part0 @ ™ PartA-S8LGS (A) The Borrower shall have caused CBS to enter into 3 memorandum of agreement with the SBEC, in form and content satisfactory to the Bank, regarding the operation and management of the expanded SBLGS; and (8) The SBEC shall have entered into a memorandum of Understanding (MOU) with a minimum of two Participating financial institutions setting forth the terms. and conditions that will regulate the relationship between the SBEC and the relevant institutions, said MOU to be in form and content satisfactory to the Sank. Part 8-SBDF (C) The Borrower shail have caused TD, acting through the PMU working in conjunction with the PSC sub-committee referred to in paragraph 5 of Schedule 6:1o this Loan Agreement, to enter into a memorandum of agreement, in form and content satisfactory to the Bank, with each accredited participating organization (the first of which are expected to be the SBEC and WIBF) regarding the Utiization of the SBDF by the participating organization in question. Part C~ Pilot Microfinance Facility (©) The Borrower shall have caused TD and CBS to enter into a memorandum of agreement with DBS, in form and content satisfactory to the Bank, regarding the initial operation and management of the proposed pilot microfinance facility. Part D Law and Policy Reform (©) The Borrower shall have caused TD, after consultation with the Department of Justice, the Office of the Attomey General, and DTCI, to submit a memorandum to the Bank outining, in a manner satisfactory to the Bank, how the consuitancy services proposed under Part D of the Project for, inter alia, reforming the chattels registries are to be uflized| 16 Schedule 3 (©) Notwithstanding any other provision of this Loan Agreement, no withdrawals shall be made from the Loan Account for utlization by DBS, the SBEC or WIBF Until the relevant staff in DBS, the SBEC and WIBF have completed the training programs proposed under the Project for accredited institutions. Similarly, no other prospective participating organization shall be dectared eligible to utlize the proceeds of the Loan until ‘adequate training has been provided for its staf.Attachment to Schedule 3 TABLE (Small Business Development Project) ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS: | CATEGORY | PERCENTAGE OF BANK FINANCING. | Anouniaiaese {SOR Basis for Withdrawal Number Item I category Subeategory | Percentage |_ fom the Loan Account 1 Iran curence serene _| a ee { ‘Small Business | | 2 [Development Fund 80 | percent ot tla menace Pot Mirofinance | 3_|Facity 29 | pecan ott! exoenteret 4 Ieonimans | _ sono Pe 14 |pw once ee ee ‘Others (MIS Expert, Auditors, 1 | 45 _ | Smal Business Sens) 247,900; 100 _ | pecan trign emencinre™ 5 __| Equipment & Vehicies 72,000 400 [wie of focal expendinzet | 6 | interest Charge. 7__| Unallocated Total 0,000 314,000, 7,000 Eo lacrsmrmae | ] | + exclusive ofloca axes18 SCHEDULE 4 Procurement 1 Except as the Sank may otherwise agree, the procedures referred to in the following paragrapns of this Schedule shall apply in the procurement of goods and services to be financed out of the proceeds of the Loan. In this Schedule, the term “goods” includes ‘equipment and materials; the term “services” does not include consulting services. iz Procurement of goods and services shall be subject to the provisions of the “Guidelines for Procurement under Asian Development Bank Loans” dated February 1999, (hereinafter called the Guidelines for Procurement), as amended from time to time, which have been furnished to the Sorower. 3. Procurement of goods and services shall be made without any restriction against, or preference for, any particular supplier or contractor or any particular class of suppliers or contractors. 4. (@ Each supply contract for goods or services (other than minor items, which are referred to in paragraph 5 below) shall be awarded on the basis of international shopping 2s described in Chapter Ill of the Guidelines for Procurement, (b) ach draft invitation to bid and related bid document shall be submitted to the Bank for approval before they are issued (©) Notwithstanding paragraph 3.03(0) of the Guidelines for Procurement, any award of contract shail be subject to prior Bank approval. 5 Contracts for the supply of certain minor items which are available from a fimited number of qualified local suppliers, and estimated to cost, in the aggregate, the ‘equivalent of $94,000 or less, may be procured on the basis of quotations obtained from such suppliers. "Prior to such procurement, a list of individual items to be procured, an ‘estimate of their cost, an indication of potential sources of supply and any related documents, shall be submitted to the Bank for approval. 6. (a) The Borrower shall ensure that all Bank-inanced goods and services procured (including without imitation all computer hardware, software and systems, whether ‘Separately procured or incorporated within other goods and services procured) do not violate ‘infringe any industial property or intellectual property right or claim of any third party. (0) The Borower shall ensure that all Bankfinanced contracts for the procurement of goods and services contain appropriate representations, warranties and, i ‘appropriate, indemnities from the contractor or supplier with respect to the matters referred to in subparagraph (a) of this paragraph.19 SCHEDULE Consultants 1 ‘The services of consultants (both intematicnally and locally recruited) shall be utilized in the carrying out of the Project. The consultants shall assis: the Project Executing ‘Agency in the management and oversight of the Project 2 The consultants shall have expertise in () project management (i) management information systems, (i) auditing; (iv) small business development, and (v) ‘commerciacompany law. The terms of reference of the consultants shall be as determined by agreement between the Sank and the Zorrower. 3. ‘The selection, engagement and services of the consultants shall be subject to the provisions of this Schedule and the provisions of the “Guidelines on the Use of Consultants by Asian Development Bank and Its Borowers" dated October 1998, as ‘amended from time to time, which have been furnished to the Borrower. 4 ‘The consultants shall be selected and engaged by the Project Executing ‘Agency in accordance with the following procedures: (@) ~ As soon as the biodata received have been evaluated but before negotiations are started with each individual selected for negotiations, the Bank shall be furnished with the relevant shortlist of candidates for each position with () the candidates’ biodata; (i) an evaluation report and ranking of the candidates; and (fi) a request for Bank approval for the Borrower to enter into negotiations with the first-ranked candidate. (0) Alter the conclusion of negotiations but before the signing of each contract, the contract as negotiated shall be furnished to the Bank for approval. (©) Prompt after each contracts signed, the Bank shall be furnished with a copy ofthe signed contract (® tf any substantial amendment to any contract is proposed after its execution, the proposed changes shall be submitted to the Bank for prior approval20 SCHEDULE § Project impiementation and Other Matters L. GENERAL PROJECT IMPLEMENTATION ARRANGEMENTS A. Project Executing Agency 4. TD inits capacity as Project Executing Agency shall have overall responsibility for the camying out of all Parts of the Project B.. . Project Steerina Committee 2 (@) _ TD, promptly after the Effective Date, shall constitute a Project Steering Committee (PSC). The Financial Secretary or the Financial Secretary's nominee shall act as chairperson of the PSC. The PSC’s foundation members shall be the members of the advisory group set up during the formulation of the Project, and shall comprise representatives from TD, DTCI, CBS, DBS, the SBEC, WIBF, SCCi, SMEA, and the three commercial banks curently operating in Samoa viz ANZ Sank (Samoa) Lid., Pacific Commercial Bank Lid., and National Sank of Samoa. The PSC shall meet at least once ‘every three months and shall be responsible for the overall drecion of the Project and for providing guidance to the Project Management Unit (PMU), particularly regarding Coordination of activities between the various Project implementing agencies. (b) TD shall provide written notice to the Sank of the full composition of the PSC within 30 days of the Effective Date. C. Project Management Unit 3. (a) __TD, promptly after the Effective Date, shall establish 2 Project Management Unit (PMU) to be responsible for day-to-day execution of the Project and for coordinating the inputs of the various implementing agencies. The PMU shall also provide secretariat functions for the PSC and any sub-committees estabiished by the PSC. (b) TD shall use its best endeavors to ensure that the PMU manager, to be engaged in accordance with the provisions of Schedule 5 to this Loan Agreement, is in place within one month of the Effective Date. IL SPECIFIC PROJECT IMPLEMENTATION ARRANGEMENTS PART 4. (@)_ In accordance with the memorandum of agreement between CES and the ‘SBEC referred to in paragraph 8(2)()(A) of Schedule 3 to this Agreement, the SBEC shall be the implementing agency for the expanded SBLGS to be developed under Part A. Eligible participating organizations under Part A shall be the three commercial banks currently ‘operating in the Borowar (ANZ Bank (Samoa) Ltd., Pacific Commercial Bank Ltd., and National Bank of Samoa), and DBS (hereinafter “the participating financial institutions").Schedule (o) Promptly after the Eifective Date, the SEEC snail enter imo the memoranda of understanding with the participating financial institutions ceferad to in paragraph 8(a)()(@) of ‘Schedule 3 to this Loan Agreement. PART 8 — Small Business Develooment Fund 5. Promptly after the Effective Date, the PSC shall establish a three-member sub- committee comprising representatives of TD, DTCI and DBS for overseeing the SDF established under Part 8 of the Project. The sub-committee shall comprise three members from within the PSC with no potential confict of interest regarding the operation of the SEDF. 6 It shall be the responsiblity of the PSC sub-committee to oversee the awarding of ‘annual contracts to training organizations for the provision of training, business advice and mentoring, appropriately justified in relation to needs and demand and provided to 2 recognized standard, to be funded through the SDF. Only submissions from accredited or certified providers shall be accepted for consideration, with accreditation or certification to be handled initially through the SBE. Contracts shall be approved on a competitive bid basis. 7. The following incicative benchmarks shall be used to determine accreditation: () proven track record of professional competency in the delivery of entrepreneurial training or Support (i) professional or academic qualifications of staff. and (ji) ability or willingness to bear 10 percent of the delivery cost either throuch the participating organization's own resources, or by a levy on the cient base. The first candidates to be considered for accreditation shall be the SBEC itsetf, and WIBF. 8 The PSC sub-committee and the PMU shall cause the SBEC and WIBF to submit fully costed medium-term workpians within three months of the Effective Date, detailing the proposed expanded range of services to be provided, with a full breakdown of the costs, performance measures and verifiable indicators associated with the delivery of those ‘services. Costs shall be broken down into direct and indirect costs, with details of assets to be purchased, and any proposal for part-charging the client base. PART C.— Biot Microfinance Facitv 9. __ DBS shall be the implementing agency for the on-iending under the pilot microfinance facility. WIBF shall be the intial participating organization. Criteria for selecting further participating organizations shall be as agreed between the Sorrower and the Bank. 40. The microfinance fecity shall be administered as a revolving fund under terms and ‘conditions laid down in the memorandum of agreement between CBS and DBS referred to in paragraph 8(a)(ji)(D) of Schedule 3 to this Loan Agreement. 41. The Borrower shall cause DBS to provide appraisal support training to any participating organization that becomes involved in the microfinance facility.Schedule § Pal 42. Implementation of Part of the Project shall be primarily enacted through TD with support rom DTC, the Department of Justice and the Office of the Attomey General 43. The implementing agency for thé upgrading of the chattels registries shall be the Department of Justice. 14. The implementing agency for the new credit reference facility is expected to be an independent agency to be estabished by interested commercial banks; in that event the Borrower shall use is best efforts to faiitate the establishment of such a credit reference facility within the private sector by the commencement of year three of the Project. MI FINANCIAL MATTERS 45. Without limiting the generality of Section 4.02 of this Loan Agreement, the Borrower shall provide adequate budcet, starting with the 2001 budget, for the Borrower's contribution to the Project. 46. The Borrowei, either through securing the extension of existing outside support for the current operational costs of the SBEC er through securing altemative financial backing acceptable to the Bank, shall ensure adequate funding for the SBEC’s operations throughout the life of the Project, IV. SPECIFIC LEGAL REFORMS 17, The Borrower shall ensure all necessary support is given to the Govemment’s ‘ongoing efforts to improve the legal and reguiatory environment for the corporate sector. In particular: Company Law Reform () The Borrower shall, by no later than 31 December 2000, cause a draft Bill to replace the existing Companies Act 1955 to be submitted to Cabinet, such Bill to incorporate the recommendations for reform outlined in the UNDP- ‘commissioned report Legal and Regulatory Reform for the Corporate Sector, dated October 1999, with a view to having said draft Bill enacted by no later than 30 June 2001. + Land Law Reform () The Borrower shall, by no later than 30 June 2001, constitute 2 Working Group charged with responsibility for formulating a ‘pilot scheme aimed at freeing up customary land for commercial activities in a designated area or areas. The Working Group shall be chaired by the Secretary of the Department of Land, Surveys and Environment or hisher nominee and include representatives of TD, the Department of Lands and Titles, the Office of the Attomey General, DTCI, the Intemal Affairs Department, and thoseSchedule 5 members of the legal profession practising in the private sector (the representative of the latter to be nominated by the President of the Law Society) (il) Promptly upon establishment of the proposed Law Commission, the Borrower shall cause said Law Commission to undertake a comprehensive review of the law relating to land, including but not necessarily limited to the various legal impediments preventing the movement of land, particularly customary land, to higher vale economic uses identified in the ‘aforementioned 1999 UNDP-commissioned report. Upon completion of the review, the Borrower shall ensure that the Law Commission's findings and recommendations are widely disseminated on a nationwide basis, particularly at vilage level, with a view to having any legisiative changes recommended by the review enacted at an early date. securities over Personal Pr (jv) The Borrower shal, by no later than 31 December 2001, cause a new system of registration in respect of motor vehicles to be introduced whereby security interests in relation to motor vehicles shall thenceforth be registered ‘ona computerised register. The law relating to secured transactions generally shall also be overhauled prior to this dete V. OTHER MATTERS A. Environmental Compliance 48 Environmental monitoring shall be under the guidance of the PMU. On behaff of the Project Executing Agency, the PMU shall ensure that the various Project implementing agencies and participating organizations and participating financial institutions comply with all applicable environmental laws and regulations in connection with all Project-related activities funded or guaranteed out of the proceeds of the Loan. B. _ . Project Performance Monitoring 18. ‘TD, through the PMU and within six months of the Effective Date, shall establish a project monitoring and evaluation system, based on benchmarks and indicators ip be agreed with the Bank. The PMU shall ensure that, prior to completion of the Project, the ‘accumulated databases relating to these benchmarks and indicators are transferred to DTC! to assist DTC! with its proposed micro- and small enterprise ‘function. C. Midterm Review 20.° The Borrower together with the Bank shall camry out a comprehensive midterm review of the Project at the end of the second year of the Project. The review shall assess the progress and achievements of thé Project against is objectives, identify difficuties, i any, being encountered, and recommend remedial actions # required.Attachment 15 Loan No. 1785-SAM(SF): Small Business Development Project Compliance with Loan Covenants As of February 2002 Reference LA, Section 4.06 (b) ‘Covenant The Borrower shall (i) maintain, or cause to be maintained, separate accounts for the Project: (i) have such accounts and related financial statements audited annually, in accordance | with appropriate auditing standards consistently applied, by independent auditors | whose qualifications, experience and terms of reference are acceptable to the Bank; (ii) furnish to the Bank, as soon as available but in any event not later than six (6) months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors’ opinion on the use of the Loan proceeds and compliance with the covenants of this Loan Agreement as well as on the use of the! procedures for imprest accountistatement of | expenditures), alin the English language; and (iv) fumish to the Bank such other information conceming such accounts and financial statements and the audit thereof as the Bank shall from time to time reasonably request. [Status of Compliance TA, Section 4.07 () Without limiting the generality of the foregoing, the Borrower shall fumish, or cause to be furnished, to the Bank quarterly reports on the | ;ng out of the Project. Such reports shall be submitted in such form and in such detail and within such a period as the Bank shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the quarter under review, ‘steps taken or proposed to be taken to remedy these problems, and proposed program of activities. and expected progress during the following quarter. LA, Section 4.07 (©) Promptly after compietion of the Project, ut in any event not later than three (3) months thereafter or such later date as may be agreed for this purpose between the Borrower and the Bank, the Borrower shall prepare and furnish to the Bank a report, in such form and in such detaii_as the Bank shall reasonably reauest, ie[Reference ‘Covenant 7 on the execution and initial operation of the Project. including its cost, the performance by the Borrower of its obligations under this Loan | ‘Agreement and the accomplishment of the purposes of the Loan. ‘Status of Compliance LA, Schedule 6, Para. 2(a) | Project Steering Committee | TD, promptly after the Effective Date, shall | constitute a Project Steering Committee | (PSC). The Financial Secretary or the Financial Secretary's nominee shall act as chairperson of the PSC. The PSC's| foundation members shall be the members of | the advisory group set up during the | formulation. of the Project, and shall comprise | representatives from TD, DTCI, CBS, DBS, | the SBEC, WIBF, SCI, SMEA, and the three | commercial banks currently operating in| Samoa viz. ANZ Bank (Samoa) Lte., Pactic | Commercial Bank Ltc., and National Bank of ‘Samoa. The PSC shall meet at least once | every three months and shall be responsible for the overall direction of the Project and for providing guidance to the Project Management Unit (PMU), particularly regarding coordination of activiies between the various Project implementing agencies. ~ TA, Schedule 6, Para. 2 (b) TD shall provide written notice to the Bank of the full composition of the PSC within 30 days of the Effective Date. TA, Schedule 6, Para. 3 (a) Project Management Unit TD, promptly after the Effective Date, shall establish a Project Management Unit (PMU) to be responsibie for day-o-day execution of the Project and for coordinating the inputs of the | various implementing agencies. The PMU | shall also provide secretariat functions for the | PSC and any sub-committees established by the PSC. | gh” LA, Schedule 6, Para. 3 (b) TD shail use iis best endeavors to ensure that the PMU manager, to be engaged in accordance with the provisions of Schedule 5 to this Loan Agreement, is in place within one month of the Effective Date.Reference Covenant ‘Status of Compliance: T LA Schedule 6, _ PART A— Small Business Loan Guarantee Para. 4 (a) Scheme In accordance with the “memorandum of agreement between CBS and the SBEC referred to in paragraph 8(a)()(A) of Schedule 3 to this Agreement, the SBEC shall be the implementing agency for the expanded SBLGS to be developed under Part A. Eligible Participating organizations under Part A shall be the three commercial banks currently operating in the Borrower (ANZ Bank (Samoa) | Lid., Pacific Commercial Bank Ltd., and National Bank of Samoa), and DBS (hereinafter “the participating financial institutions”). | | | | | [TA Schedule 6, Prompliy ater the Effective Date, the SBEC | Para. 4 (b) shall enter into the memoranda of j understanding with the participating financial | { } institutions referred to in paragraph 8(a)()(B) of Schedule 3 to this Loan Agreement | TA, Schedule6, PART B — Small Business Development Para. 5 Fund Promptly after the Effective Date, the vse| shall establish a three-member sub-committee | comprising representatives of TD, DTC! and | DBS for overseeing the SBDF established | e under Part B of the Project. The sub- committee shall comprise three members from within the PSC with no potential confict of interest regarding the operation of the SBDF. LA, Schedule 6, it shall be the responsibly of the PSC sub- Para.6 committee to oversee the awarding of annual contracts to training organizations for the provision of training, business advice and ‘mentoring, appropriately justified in relation to : needs and demand and provided to a recognized standard, to be funded through the 'SBDF. Only submissions from accredited or certified providers shall be accepted for consideration, with accreditation or certification to be handled initially through the SBEC. Contracts shall be approved on a competitive bid basis.[Reference LA, Schedule 6, Para. 7 ‘Covenant T The following indicative benchmarks shail be used to determine accreditation: (i) proven | track record of professional competency in the | delivery of entrepreneurial training or support; | (i) professional or academic quaifications of | staff, and (ii) ability or willingness to bear 10 | Percent of the delivery cost either through the | participating organization's own resources, or by a levy on the cient base. The first candidates to be considered for accreditation shall be the SBEC itself, and WIBF. ‘Status of Compliance ge” LA, Schedule 6, Para. 8 The PSC sub-committee and the PMU shall cause the SBEC and WIBF to submit fully costed medium-term workpians within three months of the Effective Date, detaiing the proposed expanded range of services to be provided, with a full breakdown of the costs, performance measures and verifiable indicators associated withthe delivery of those services. Costs shall be broken down into direct and indirect costs, with details of assets to be purchased, and any proposal for part- charging the client base. LA, Schedule 6, Para. 9 PART C — Pilot ficrofinance Facility DBS shall be the implementing agency for the on-lending under the pilot microfinance facility. WIBF shall be the initial participating organization. Criteria for selecting further participating organizations shall be as agreed between the Borrower and the Bank. LA, Schedule 6, Para. 10 “The microfinance faciity shall be administered asa revolving fund under terms and ‘conditions taid down in the memorandum of | agreement between CBS and DBS referred to in paragraph 8(aY(i(D) of Schedule 3 to this Loan Agreement, ov LA, Schedule 6, Para. 11 The Borrower shall cause DBS to provide appraisal support training to any participating organization that becomes involved in the microfinance facilty oe TA, Schedule 6, Para. 12 PART D — Policy and Legislative Reform Impiementation of Part D of the Project shall[Reference LA, Schedule 6, Para. 13, Covenant I be primariy enacted through TO with support | from DTCI, the Department of Justice and the | Office of the Attomey General. The implementing agency for the upgrading of | the chattels registries shall be the Department of Justice. Status of Compliance | pen LA, Schedule 6, Para. 14 | The implementing agency for the new credit reference facility is expected to be an independent agency to be established by interested commercial banks; in that event the Borrower shall use its best efforts to facilitate the establishment of such a credit reference facility within the private sector by the commencement of year three of the Project. yy | LA, Schedule 6, Para. 15 Without limiting the generality of Section 4.02 of this Loan Agreement, the Borrower shall | provide adequate budget, starting with the 2001 budget, for the Borrower's contribution to the Project. LA, Schedule 6, Para. 16 The Borrower, either through securing the extension of existing outside support for the current operational costs of the SBEC or through securing altemative financial backing acceptable to the Bank, shall ensure adequate funding for the SBEC’s operations throughout the life of the Project. LA, Schedule 6, Para. 17 (i) ‘Company Law Reform ‘The Borrower shall, by no later than 31 December 2000, cause a draft Bill to replace the existing Companies Act 1965 to be submitted to Cabinet, such Bill to incorporate the recommendations for reform outlined in the UNDP-commissioned report Legal and Regulatory Reform for the Corporate Sector, dated October 1999, with a view to having said draft Bil enacted by no later than 30 June 2001. i) Land Law Reform ‘The Borrower shall, by no later than 30 June 2001, constitute a Working Group charged[Reference i Covenant 7 wih responsibilty for formulating @ pilot scheme aimed at freeing up customary ‘and for commercial activities in a designated area or areas, The Working Group shail be chaired by the Secretary of the Department of Land, Suneys and Environment or his/her nominee | and include representatives of 7D, the | Department of Lands and Titles, the Office of | the Attomey General, DTCI, the intemal Affairs Department, and those members of the legal profession practising in the private sector (the representative of the latter to be nominated by the President of the Law Society). Status of Compliance () Promptly upon establishment of the proposed Law Commission, the Borrower shall cause said Law Commission to undertake a comprehensive review of the law relating to land, including but not necessarily limited to the various legal impediments preventing the ‘movement of land, particularly customary land, to higher value economic uses identified in the aforementioned 1988 UNDP-commissioned report. Upon completion of the review, the Borrower shall ensure that the Law Commission's findings and recommendations are widely disseminated on a nationwide basis, particularly at village level, with a view to ‘having any legislative changes recommended by the review enacted at an early date. (iv) ‘Securities over Personal Property The Borrower shall, by no later than 31 December 2001, cause a new system of registration in respect of motor vehicles to be introduced whereby security interests in | relation to motor vehicles shall thenceforth be | registered on a computerised register. The | law relating to secured transactions generally | shall also be overhauled prior to this date, | LA, Schedule 6, Para. 18 Environmental Compliance Environmental monitoring shall be under the guidance of the PMU. On behalf of the Project Executing Agency, the PMU shall ensure that weReference TA, Schedule 6, Para. 19 Covenant 7 the various Project implementing agencies and participating organizations. and Participating financial institutions comply with | all applicable environmental laws and regulations in connection with all Project. | related activiies funded or guaranteed out of | the proceeds of the Loan. | Project Performance Monitoring TD, through the PMU and within six months of the’ Effective Date, shall establish 2 project monitoring and evaluation system, based on benchmarks and indicators to be agreed with the Bank. The PMU shall ensure that, prior to completion of the Project, the accumulated databases relating to these benchmarks and indicators are transferred to DTC! to assist DTCI with its proposed micro- and small enterprise policy function. Status of Compliance ye’ TA, Schedule 6, Para. 20 Midterm Review The Borrower together with the Bank shall | carry out a comprehensive midterm review of ‘the Project at the end of the second year of the Project. The review shall assess the Progress and achievements of the Project against its objectives, identify difficulties, if any, being encountered, and recommend remedial actions if required.24 XI, IMPLEMENTATION OF ACCOMPANYING TECHNICAL ASSISTANCE 64, ADB will provide TA for Capacity Building of Financial and Business Advisory Intermediaries. The TA will provide assistance to support (i) policy and legislative reviews; (i) institutional strengthening of SBEC, DBS, and WIBF and other participating institutions; and (ii) the setting up an upgraded chattels registry and a new credit reference scheme. Consultants will be recruited in accordance with ADB's Guidelines ‘on the Use of Consuttants. 65. The TA is estimated to cost $589,000 equivalent, of which $365,600 is the foreign exchange cost and $223,400 equivalent is the local currency cost ADB will provide $365,600 to finance foreign exchange costs, and $134,400 equivalent for local currency costs. The TA will be financed on a grant basis from the ADB-funded TA program, and will cover consulting services, training, and equipment. The remaining local currency costs will be met by the Government, through the provision of office space and faciities, and counterpart staff. The detailed cost estimates and terms of reference are provided in Attachment 16.Attachment 16 TECHNICAL ASSISTANCE FOR CAPACITY BUILDING OF FINANCIAL AND BUSINESS ADVISORY INTERMEDIARIES A. Objectives and Scope 1. The objectives of the technical assistance (TA) are to assist the Government in strengthening the financial and business advisory intermediaries involved in implementation of the Small Business Development Project (the Project), particularly the Small Business Enterprise Centre (SBEC), the Development Bank of Samoa (DBS), and the Women in Business Foundation (WIBF); and to assist the Government with ongoing efforts to improve the egal and regulatory environment for the corporate sector generally, in particular those areas that impact the micro- and smail enterprise (MSE) sector. B. Implementation Arrangements 2, The Treasury Department (TD) will be the Executing Agency for the TA. 7D will coordinate with the relevant Govemment agencies in the implementation of the relevant ‘components, more specifically with DBS, SBEC, WIBF, the Department of Trade, Commerce and Industry (DTCI), the Department of Justice, and the Office of the Attomey General 3. Both intemational and domestic consultants wil be engaged for the TA through one or more intemational firms. -The team will include the following international consultants (11 person-months): (i) legal specialist(s) in commercial/company law, (i) a microfinance specialist; ‘a nongovernment organization (NGO) and govemance specialist; and (iv) a credit reference facility specialist. The following local experts (10 person-months) will be engaged: (i) customary land speciaiist(s); (i) a litigation specialist (debt recovery); and (i) a guarantee scheme specialist. The team of consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consuttants. The consuttants will report to TD and the manager of the Project management unit (PMU), 4, The TA includes funds for office equipment, which will be procured by the consultants in accordance with ADB's Guidelines for Procurement. The consultants will be responsible for the conduct of various training workshops. 5. The TA will be implemented over the period of the Project, which is due to commence in February 2001 and be compieted by the end of 2005. Each of the consultants will submit inception reports within two weeks of commencing their services, draft final reports two weeks before the end: of their services, and final reports incorporating the comments of TD, the relevant implementing agencies, and ADB. Consolidated progress, draft final, and final reports will be submitted by the team leader (expected to be one of the commercial/company law specialists) at the conclusion of the TA to TD ard ADB. TD will disseminate the reports to the relevant agencies. C. Tentative Terms of Reference for Consultants 4. International Experts a. Commercial and Company Law Specialist(s) 6. The consultant(s) wil have a law degree snd experience in one ar more of the following: () secured transactions, (i) land law (particulars, as it may apply to customary land), (ii) creditreference facities, and (iv) joan guarantee schemes. The assignment is to be undertaken under the joint supervision of the attorney general, the Secretary for justice, and the financial secretary. To the extent possibie, the assistance will be carned out in consultation with the New Zealand Overseas Development Assistance (NZODA) financed insttutional strengthening team currently ‘working at the Department of Justice. The consu'“2nt(s) will also liaise with the law commission once it is established. In particular, the consultant(s) will undertake the following: () Secured Transactions. The consultant will (a) review the current chattels registries and identify areas in which they can be upgraded to factitate their better use by financial institutions; (b) review the operations of tne motor vehicle registry maintained by the Police Department to detzrmine how it might be linked and integrated into the registries (one fcr cc7ipany-owned chattels, one for personal chattels) currently maintained oy the Department of Justice, taking into account the work being undertaken in this area under any other aid- assisted projects, including the ongoing World Bank-financed Infrastructure Asset Management Project; and (c) review the existing legisiation in this area, and recommend any legislative andlor administrative amendments that may be required; (i) Land Law. The consultant will (@) help the local customary land specialist(s) examine options for the improvement of the economic use of customary land, as required; and (©) provide support, as required, to the working group to be established under the Project to formulate a pilot scheme aimed at freeing up customary land; (ii) Credit Reference Facility. The consuitant will (@) as and if required, provide ass'stance to the credit reference specialist in reviewing the legal environment for the establishment of a credit reference facility in Samoa; and (>) if needed, assist the Cifice of the Attomey General in drafting appropriate legislation; (iv) _ Guarantee Scheme. The consultznt wil, as may be required, advise TD, SBEC, and CBS in any matter arising nnection with the small business loan {uarantee scheme being funded ur==" the Project. 7. Areport will be submitted at the end of the consultancy to TD, the Office of the Attomey General, and the Deparment of Justice, with a copy to the manager, PMU.b, Microfinance Specialist 8. The consultant will have practical experience in the management of microcredit ‘schemes, and in adcition have training and commurication skills. The consultant should have a good understanding of the operation and functions of nongovernment organizations (NGOs) ‘operating at grassroots level and be gender sensitive. In particular, the consuitant will undertake the following tasks: () Review previous systems for the management of the earlier microfinance schemes run by DBS and prezare 2n operations manual to assist staff of all participating organizations (starting with DBS) in appraising, accounting, monitoring, and reporting under the microfinance pilot scheme being funded under the Project. (i) Provide training of trainers in microfinance project appraisal. (ii) Provide advisory services to poten‘! qualified participating organizations on steps to strengthen the organization and management of their entrepreneurial, savings, and lending activities, sc that tney might qualify as participating organizations. 9. A report will be submitted at the end of th consultancy to TD, with copies to DBS, WIBF, and the manager, PMU NGO and Governance Specialist 40. The consuitant will be an NGO expert, with substantial NGO govemance experience. ‘The consultant should be gender sensitive anc familiar with issues related to poverty reduction through NGOs. In particular, the specialist is ex ect2c to undertake the following tasks: () Analyze the management and governance strengths and weaknesses of WIBF, with a view to making WIBF eligible :> become a participating organization under the microfinance pilot scheme, anc therefore eligible to draw on the Small Business Development Fund (S3DF) being set up under the Project. (i) Review WIBF's board composition and linkages with extemal stakeholders, and recommend changes that would sirencthen the board. (ii) Assist WIBF in formulating 2 mansgement improvement strategy that would institutionalize board functions, strengthen management, and address risks and constraints. (iv) Help WIBF review and revise job descriptions, roles, and responsibilities, incorporating performance me=ures intc all positions. 11. Areport will be submitted at the end of t the manager, PMU. 1¢ consultancy to WIBF, with copies to TD and