PNPM Mandiri Revolving Loan Fund (RLF) - PNPM Support Facility

3.3 Develop an institutional performance monitoring system based on RLF rating system and up to date
financial reporting standards
3.4 Develop institutional performance monitoring system into a supervisory rating system
3.5 Determine an appropriate supervisory agency (or agencies: non-prudential vs prudential)
3.6 Conduct capacity building of supervisors
Component 4 – Policy and Strategy
4.1 Develop initial strategy for restructuring and improving rural RLF operations based on 100 RLFs in
CJ/Yog (year 2)
- Institutional development strategies and options (as basis for capacity building – Component 1)
- Transition from grant (BLM) to loans “phasing-out of BLM, phasing-in of bank loan”
- Potential legalization of RLFs
4.2 Develop initial strategy for restructuring and improving urban RLF operations
4.3 Develop refined strategy for rural and urban RLFs in four pilot provinces (year 3)
4.4 Provide lessons learned and good practice inputs to PNPM Mandiri on an incremental basis
4.5 Develop long-term policy and strategy for sustainable RLF operations and nationwide replication by
the government, including exit strategy for the government’s direct support for RLFs (year 5)
ANNEX 2. DETAILED DESCRIPTION OF PROGRESS TO DATE
18. Overall implementation progress. Implementation is well underway, with project locations selected;
UPKs mapped; project concept socialized to key stakeholders at central, regional and provincial levels, as
well as to a number of UPKs; and assessments of PNPM Mandiri Revolving Loan Funds (RLFs) nearly
completed for Rural and well underway for Urban. Procurement of core technical assistance packages is in
the final stages. General progress and progress by component is detailed below. More information about the
components is included in Annex 2.
19. Project preparation. Following project approval by the JMC in January 2010, the core project team
was established; a Child Trust Fund was created and JMC-approved budget of US$4.211 million
transferred to the TF account. A series of meetings were held with national level counterparts, the
Ministry of Home Affairs, Bappenas, Coordinating Ministry for People’s Welfare (Menko Kesra), NMC,
donors and the Social Development team in the World Bank Indonesia’s PSF Office.
20. A working group of relevant stakeholders from the Government has been established. A first
meeting, chaired by Bappenas, was held on 5 November 2010. On that occasion, the working group
endorsed the selection of the two off-Java provinces (i.e., West Sumatra and East Nusa Tenggara (NTT)).
Working group meetings at both national and regional level are expected to be held on a regular basis in
due course.
21. The Project concept note has also been subjected to the World Bank internal peer review and was
approved on 11 November 2010. Specifically, the World Bank management approved implementation of the
Project by the Bank and the allocation of staff and management resources. The peer review also included
external microfinance specialists from CGAP.
22. Inventory and mapping of RLFs. An inventory and mapping of all existing Revolving Loan Funds
(RLFs) in the four provinces in both rural and urban areas was conducted (see table below). The project will
broadly target approximately 3,300 RLFs, with the majority (75%) in Java. Furthermore, the RLFs in PNPM
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