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This report aims to deepen the understanding of barriers to and incentives for the acceptance and use of electronic payments, from the perspective of micro, small and medium retailers (merchants). Developing and accelerating acceptance of electronic payments by these merchants is essential to expanding financial access. A basic transaction account for payments and deposits is considered an entry point to the formal financial system, and can act as a gateway for individuals to adopt other relevant financial services they need to smooth their consumption and manage income shocks. However, equipping individuals with only basic transaction accounts is not sufficient. The use case for payment services becomes increasingly effective as individuals gradually move to a cashless economy, where electronic payments are widely accepted for regular and frequent purchases. The report highlights important dimensions to consider in the efforts to expand electronic payments for merchants.

This paper studies the effects of differences in local administrative burdens in Italy in the years 2005–2007 preceding a major reform that sped up firm registration procedures. Combining regulatory data from a survey on Italian provinces before the reform (costs and time to start a business) with industry-level entry rates of limited liability firms, it explores the effects of regulatory barriers on the average of the annual entry rates across industries with different natural propensities to enter the market. The estimates of the cross-sectional analysis show that lengthier and, to some extent, more costly procedures reduced entry in sectors with naturally high entry. A one-day delay in registration procedures reduces the entry rate in highly dynamic sectors by more than 1 percent. These results hold when I include measures of local financial development and of efficiency of bankruptcy procedures are included.

Mali is a vast, land-locked country in West Africa with a population of approximately 14.9 million, and a GDP per capita of USD480. The economy is largely rural, with over two-thirds of the population living off agriculture, notably cotton. Gold is the country’s largest export, though production has been declining and the industry faces an uncertain future as proven reserves are limited. The service sector, which represents 40 percent of GDP, is dominated by trade and commerce. Mali’s dependence on crops and gold makes it vulnerable to terms of trade shocks. Industry, which employs just 3 percent of the active population, consists largely of small-scale food processing and textile plants. The overwhelming majority of the population (over 90 percent) works in the informal sector. The FSAP Development Module focused on: i) the banking sector and legal framework (credit to the economy); ii) microfinance; iii) agricultural finance; iv) insurance; and v) housing finance2. The mission carried out in-depth assessments on each topic and provided recommendations aiming at mitigating financial vulnerabilities and supporting the development of the financial sector (i.e. development the credit to the economy while insuring financial stability).

The housing finance market in Mali remains small and under developed. Few banks currently offer a full mortgage product with Banque Malienne de Solidarite, Mali Housing Bank (BHM), Bank of Africa, and EcoBank being the main lenders although at minimal levels. The total annual housing need in Mali based on the household formation rate amounts to 82,500, split between 51,100 urban units and 31,400 rural units. Overall some social housing is constructed and support is provided by the state for low income housing through the Office Malienne de l’Habitat (OMH), but the numbers remain small. The Malien authorities have been working to strengthen financial sector stability which includes measures to stabilize the BHM and put it in a position where it begins to fulfill its mandate of providing credit for the housing sector. A strategy was approved by the council of Minister for a strategic disengagement by the state from the share capital of BHM. Initially the agreed plan was for BHM to be privatized. Overall progress in delivery of affordable housing will require a concerted effort among all stakeholders both in public and private sector. This should be supported through establishment of stakeholder coordination group to oversee change across the housing value chain.

In July 2013, the World Bank Group launched its Strategy, outlining how it will partner more effectively with clients to help them achieve the ambitious goals of eradicating extreme poverty and boosting shared prosperity through economic growth, inclusion, sustainability and resilience. In April 2014, the World Bank Group Corporate Scorecard was launched for the first time and the World Bank Scorecard revised to monitor the implementation of the strategy. The World Bank Group Scorecard provides view of the results and performance indicators of the three World Bank Group institutions: the World Bank (WB), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). This brochure presents the scorecards, updated with the latest data available in fiscal year 2015. The scorecards are structured in three tiers. A tier one and two presents indicators monitoring aspects of growth, inclusiveness, and sustainability and resilience. Tier three captures the progress in implementing the World Bank Group strategy and includes measures of both operational and organizational effectiveness.

This report is a synthesis of fieldwork findings and recommendations developed since October 2012 under this Technical Assistance (TA) carried out by the World Bank’s Water and Sanitation Program (WSP). The recommendations have been developed through on-going consultations and meetings with the Directorate of Environmental Sanitation and Directorate General of Human Settlements, Ministry of Health, and Government of Indonesia. This report describes and assesses the performance of technical assistance TA-P143167, ‘rural sanitation market expansion of domestic private sector in Indonesia,’ provided by the World Bank through the Water and Sanitation Program (WSP) carried out from October 2, 2012 to March 31, 2015 to support the development of a rural sanitation market in Indonesia. This technical assistance (TA) was implemented as parts of a larger effort to assist the Government of Indonesia achieve at-scale results in rural sanitation through its National Strategy for Community-Based Total Sanitation (Sanitasi Total Berbasis Masyarakat - STBM).

Economic growth in Sub-Saharan Africa (SSA) has averaged roughly 5 percent per year over the past decade, improving living standards and bolstering human development indicators across the continent. Stronger public institutions, a supportive, private sector focused policy environment, responsible macroeconomic management, and a sustained commitment to structural reforms have greatly expanded opportunities for countries in SSA to participate in global markets. In recent years, many countries in the region have benefited from an increasingly favorable external environment, high commodity prices, and an especially strong demand for natural resources by emerging economies, particularly China. Over the longer term, leveraging Chinese investment to support broad-based growth will require policies designed to boost the competitiveness of sectors in which China s economic rebalancing may create a comparative advantage for SSA. To date, few African countries have been able to benefit from large-scale Chinese investment outside the resource sector. However, as China s growth slows and its economy shifts toward a more consumption-driven model, it is likely that global demand for resource imports will slow as well. Countries with the most heavily concentrated export mix, particularly in the mineral and oil sectors are the most vulnerable to China s economic rebalancing and should be ready to adopt measures to mitigate the impact of negative terms-of-trade shocks. By contrast, as wage rates in China continue to rise and firms refocus their attention on domestic demand, countries in SSA will be well positioned to exploit emerging opportunities for investment in export-oriented manufacturing. Ethiopia provides an instructive example, as its inexpensive yet relatively skilled labor force, coupled with the government s proactive efforts to court Chinese investors, have enabled Ethiopia to attract substantial investments in labor-intensive industries. Infrastructure enhancement, workforce development, and good-governance reforms offer a promising strategy for many countries in the region. Although the establishment of industrial zones has yielded mixed results, several salient success stories warrant careful attention. This report discusses how Africa could take advantage of the untapped opportunities offered by China s progressively intensifying investment and trade ties with SSA. It is hoped that this analysis will enrich the ongoing dialogue between policy makers, private firms, and civil society regarding China s increasingly important role in the growth and development of Sub-Saharan Africa.

Very small enterprises (VSEs) in Latin America and the Caribbean (LAC) represent a broad and heterogeneous segment, often underserved by formal financial institutions. They are generally informal and often family businesses. The financial needs of these enterprises are typically overlooked by “downscaling” banks, which find larger and often more formal small and medium enterprises (SMEs) to be a more natural market for their products and services. Microfinance Institutions (MFIs) are starting to move upmarket to serve SMEs, and in particular, VSEs within this segment. However, they use varying definitions, methodologies and products to do so and to date there has been little research or documentation of their experiences. This report highlights the results of a recent study of the existing practices in Latin America of MFIs serving VSEs, where VSEs are considered to be those businesses with financing needs of between US$7,000 and US$30,000. It is a starting point for an institution considering entering the segment, or for one that finds itself having grown into the segment “organically” but with a view to strengthen its position. It includes several checklists for MFIs interested in expanding upmarket into the VSE space, as well as more detailed discussions and examples of the most relevant points.

The general principles for credit reporting were issued by the World Bank in September 2011. Since then, the World Bank and the international committee on credit reporting (ICCR) have been leading efforts towards the implementation of the general principles worldwide. This report is one of the concrete outputs of the work following the general principles. It addresses one of the most significant problems that limit the ability of most small and medium enterprises (SMEs) around the world to obtain adequate external financing to underpin their productive activities: information asymmetries. Creditors assess the creditworthiness of credit and loan applicants based on two basic criteria: ones financial capacity or ability to repay a loan, and ones willingness to repay the loan. A credit reporting system s (CRS) basic objective is to address information asymmetries, which is crucial for determining repayment capacity and repayment willingness. Credit reporting can therefore be extremely valuable to creditors for enhanced, fact-based credit risk assessments, and in this sense can also be seen as a tool to facilitate access to financing, including by SMEs. The main objective of this report is therefore to identify actions that can be undertaken by authorities and other relevant policy makers to improve the flow of data and other relevant credit information on SMEs to creditors through CRS. For this purpose, the report first analyses the overall status of credit reporting activities in connection with SMEs.

Financial institutions (FIs) face a number of risks related to the activities of their clients. The impact of climate change, resource scarcity, environmental pollution and social issues such as involuntary resettlement are just some of the factors that might increase the risk incurred by FIs extending credit to clients. The potential impact can be substantial: FIs may face increased credit risk, reputational risk, or liability risk. In this context, IFC has observed a growing interest in Environmental and Social Risk Management (ESRM) from the financial sector in emerging markets. Furthermore, FIs are increasingly aware of the opportunities of environmentally and socially sustainable banking. To provide an overview of the current state of ESRM, IFC has conducted a series of baseline surveys in Africa, Asia and Latin America. This paper provides a summary of the main findings of these market surveys and insights into the current practices of ESRM in emerging markets. In this paper, the scope of the baseline surveys will be presented, followed by a detailed analysis of the survey results and a summary of the main survey findings. The last section of the paper provides an overview of current ESRM guidance1 in the survey countries.

This update considers new findings since the initial Stocktaking report, substantiating the contribution of the private sector, and of small and medium enterprises (SMEs) in particular, for new jobs and investment. These findings further illustrate the key role access to finance plays in SMEs abilities and willingness to add jobs including the special circumstances of fast-growing SMEs, or gazelles. The new findings further detail availability and gaps in SME financing, including for specific subsectors such as women-owned firms and agri-enterprises. New trends include progress made in recent years to improve financial markets infrastructure, and expanded lending in countries such as China, which have made progress in this area. The findings also include key private sector innovations pioneered by the SME Finance Challenge winners and other private sector institutions, focusing on key sector opportunities (such as agribusiness and energy), product innovation (such as expanded local currency options), and risk management alternatives. The new findings and trends highlight the potential of collaborative platforms that have emerged from the G-20/GPFI (Global Partnership for Financial Inclusion) process to combine resources to improve SME access to finance, and some of the major outstanding issues and obstacles these platforms might address. The conclusion provides recommendations for priority issues and work areas for G-20/GPFI attention.

The lord’s resistance army (LRA) has inflicted enormous suffering on millions of civilians in several countries of the Great Lakes and Central African regions since it began operating in the 1990s in Northern Uganda. In March 2008, after months of intensive efforts by regional and international stakeholders to bring the conflict to an end, representatives of the Government of Uganda and the LRA finalized the final peace agreement. The military operations have significantly reduced the strength and operational capacity of the LRA over the past three years. Despite the relative success of the joint military operations, the group continues to pose a serious security threat to civilians due to the limited capacity of the national security forces in the affected countries. The LRA’s indiscriminate attacks on civilians constitute serious violations of international humanitarian and human rights laws and have caused a serious humanitarian crisis in the affected countries. The main purpose of this paper is to outline the context and rationale for interventions in LRA affected areas, to briefly describe the pilot with its regional dimension, and to present lessons learned as well as recommendations for strengthening design and implementation of support to socio-economic associations in LRA affected areas.

Gross Domestic Product (GDP) growth has moderated from 6.7 percent in FY11 to 6.3 percent in FY12 due to unfavorable external economics and internal supply constraints. Monetary policy remained accommodative for most of 2011 but gradual tightening is occurring. With the high fiscal deficit and domestic borrowing by Government, monetary policy is now bearing the brunt of macroeconomic policy adjustment. The balance of payments (BoP) is on a deteriorating track, with reserves falling to below three months of imports and export growth turning negative in March 2012. A coordinated policy response is required to ease macroeconomic pressures and improve growth prospects. Key actions include the need to create fiscal space, contain government borrowing to mitigate the risk of crowding out of credit to the private sector, better regulate the capital market, and stimulate investment and job growth in the export sector. Unlike in 2008, Bangladesh has insufficient policy space to avert the negative impact of a global slowdown through fiscal stimulus packages and monetary easing.

An appropriate rural investment climate (RIC) is essential for rural businesses to be successful and generate employment and income in their communities. Improving the investment climate could facilitate income-generation activities in both farm and nonfarm sectors, thus reducing rural poverty. Nonfarm sector focused growth, combined with agricultural growth, and has been shown by Delgado et al. (1998) to have a significant impact on the local economy through the generation of employment and income. This study is the first to focus on both farm and nonfarm enterprises in its 2010 surveys of RIC in Yemen, Burkina Faso, Nigeria, and Mozambique unlike six previous RIC assessment (RICA) pilot projects that focused only on nonfarm enterprises. This report assesses the weaknesses and strengths of all RIC components in farm and nonfarm enterprises of the four countries surveyed, and recommends measures to address the weaknesses. The report identifies similar business obstacles for farm and nonfarm enterprises and four critical areas of the RIC to be improved. The results of the RICA are based on analyses of obstacles perceived by rural entrepreneurs and on assessments by RIC indicators, enterprise entry and exit, and enterprise performance. To have maximum synergy effects, farm and nonfarm enterprises should be promoted together.

Innovation is the main driver of long-term economic growth. The accumulation of capital, whether in the form of physical assets such as plants and equipment, or through better human capital, cannot indefinitely sustain growth unless new products, services, processes, and/or business models are developed and implemented. This paper describes the actors involved and the types of funding available at different stages of the innovation process, the rationales for public intervention, and the advantages and disadvantages of some of the most commonly used policy instruments. Innovation activities are more difficult to finance than other types of investment for several reasons. Innovation produces an intangible asset that does not typically constitute accepted collateral to obtain external funding. Also, the technological and market uncertainty of innovation activities makes the returns to investment highly uncertain, creating significant problems for the standard risk adjustment methods used by providers of funds. This paper uses a streamlined version of an innovation process with three stages to categorize the different sources of finance available; in reality, considerable crossover takes places among instruments because innovation processes are not discrete.

Nonfarm sector development in rural Ethiopia is central to generating employment and income and thereby reducing poverty. The improved investment climate could facilitate investments in farm and nonfarm sectors by contributing directly and indirectly to the generation of additional employment for women and men. Ethiopia Industrial Development Strategy 2003 involved efforts to create an enabling environment for the private sector to be a driving force for economic development. The sectoral focus of the strategy is on the development of agro-based industries and on strengthening nonfarm sector. The sustainable support system for rural women entrepreneurs is based on five main components: (i) women's economic empowerment, (ii) market development, (iii) access to markets, (iv) business management support services, and (v) access to credit. Necessary conditions to support nonfarm economic activities, such as physical market development, feeder roads, and transport, will also benefit agriculture and create a virtuous circle of increasing farm and nonfarm income. Women are more likely to be involved in and benefit from nonfarm enterprise activities. Although the system proposed could be targeted at men and women, women could be the main beneficiaries of the support system. This sustainable system is new and innovative in directly supporting the rural poor and women by building the capacity of entrepreneurs and supporting institutions linked to the existing projects. This system may derive maximum synergy effects by integrating with the Agricultural Growth Project (AGP) and the Household Assets Building Program (HABP) of the Productive Safety Nets Project (PSNP) in a complementary relationship.

Although a number of m-money businesses have emerged around the world, few have reached significant scale. Overall, m-money uptake is limited when contrasted with its apparent promise of reaching the unbanked and underserved, servicing existing banking clients, and being a means for realizing a cashless society. This study examines the following in more detail: existing major money flows and the critical mass of low-value, high-volume payment transactions and whether m-money can be used for them (i.e., potential demand); regulatory environment and major obstacles for m-money uptake; business models of partnering institutions; payment behavior of users and nonusers (banked and unbanked), in particular where they receive funds and how they use money, including alternative means; and existing and potential agents networks, their requirements to run m-money as a viable business, and their training needs. This report provides detailed information on Thailand regarding five main topics, business models, money flows and demand, potential user perceptions and behavior, regulation, and agent networks.

Sri Lanka's population is still largely rural, nearly 85 percent lives outside of cities. There will probably be rural-to-urban migration in the future, which represents a potential opportunity to m-money providers. People working in cities often wish to repatriate their savings to their rural families conveniently and at a low cost. Income is fairly evenly spread across Sri Lanka s provinces, with the exception of the Western Province where Colombo, the largest city, is situated. Its GDP per capita places Sri Lanka near the average of comparable Southeast Asian countries. Malaysia is clearly an outlier with a considerably higher GDP per capita, but Sri Lanka s GDP is higher than that of the Philippines, where m-money has taken off dramatically. Poverty is less of a problem in Sri Lanka relative to countries like Bangladesh or Cambodia, where GDP per capita is much lower. The key point is that Sri Lanka is at a different stage in its economic development and is unlikely to have the same socioeconomic conditions that made m-money in Kenya accelerate so rapidly.

This study provides an overview of Arab official development assistance (ODA) over the past four decades. Trends in volume, composition, and direction are discussed in chapter two and the institutional framework is discussed in chapter three. Over 90 percent of Arab development assistance is provided by three countries: the Kingdom of Saudi Arabia (KSA), Kuwait, and the United Arab Emirates (UAE).

The point of departure of this paper is that in the absence of effectively functioning asset markets the distribution of wealth matters for efficiency. Inefficient asset markets depress total factor productivity (TFP) in two ways: first, by not allowing efficient firms to grow to the size that they should achieve (this could include many great firms that are never started); and second, by allowing inefficient firms to survive by depressing the demand for factors (good firms are too small) and hence factor prices. Both of these effects are dampened when the wealth of the economy is in the hands of the most productive people, again, for two reasons: first, because they do not rely as much on asset markets to get outside resources into the firm; and second, because wealth allows them to self insure and therefore they are more willing to take the right amount of risk. None of this, however, tells us that efficiency enhancing redistributions must always be targeted to the poorest. There is some reason to believe that a lot of the inefficiency lies in the fact that many medium size firms are too small.

A worldwide financial crisis of enormous magnitude continues to unfold rapidly. Unlike other crises in recent decades, the current episode is rooted in industrial countries' financial systems and is affecting low-income and middle-income countries (MICs) alike. Defaults on securitized sub-prime mortgages as a real estate market bubble burst led to failures or near-failures of several large financial institutions and a collapse of inter-bank and commercial paper markets. A tightening of credit, combined with declining consumer confidence, has brought on worldwide recession with growing unemployment, and many fear that the downturn will be severe and protracted. At the same time, the rapidly multiplying signs of contraction are prompting strong responses, including fiscal stimulus packages and reductions in benchmark lending rates, on the part of several of the affected developed countries. The Bank Group is well placed to help mitigate the impact of the current crisis with financing and advisory services, and its clients are already requesting increased support. A rapid, high-quality response that combines financial and advisory support can do much to ease the inevitable ramifications of the crisis. Lessons from evaluations of previous Bank Group responses to past crises can help inform the response to the current crisis in order to increase its effectiveness.

Doing Business in Egypt 2008 covers three topics at the sub national level: starting a business, dealing with licenses and registering property. These indicators have been selected because they cover areas of local jurisdiction and practice. In the last two years, doing business in Egypt has become more affordable the minimum capital required to start a business and the costs of registering property and dealing with licenses have been slashed. Doing Business in Egypt 2008 records all procedures required for a business in the construction industry to build a standardized warehouse. Doing Business in Egypt 2008 records the full sequence of procedures necessary when a business purchases land and a building to transfer the property title from another business so that the buyer can use the property for expanding its business, as collateral in taking new loans or, if necessary, to sell to another business. The ease of doing business index is limited in scope. The Doing Business indicators provide a new empirical data set that may improve understanding of these issues.