Financial Sector Stability and Reforms Program - Subprogram 2

Approved

The programmatic approach for FSSRP was approved to stabilize and strengthen the finance sector following the country's sovereign debt and economic crises by (i) strengthening the stability and governance of the banking sector, (ii) improving the asset quality of the banking sector, and (iii) deepening inclusive and sustainable finance, particularly for women-led small and medium-sized enterprises (SMEs). The programmatic approach with initially two subprograms of $200 million each with the possibility of a third subprogram, was selected to allow flexibility to address complex and challenging reforms sequentially and holistically. Subprogram 1 prioritized immediate actions to enhance the government's crisis management regulatory framework and stabilize the finance sector. Subprogram 2 will continue to ensure the completion of structural reforms in a sequential manner to develop a resilient and inclusive financial system. Subprogram 3 has been added subsequently to ensure completion of multi-year structural reforms and bring them to a sequential conclusion. It will be the final subprogram estimated at $100 million with implementation period from October 2024 to September 2025. There is an attached TA that was already approved with Subprogram 1 and provides capacity building and support for implementing policy actions and structural reforms.