31757 - Navix de mexico S.A. de C.V. SOFOM E.N.R.

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Summary of Investment Information

Project Number

31757

Company Name

Navix de México, S.A. de C.V., SOFOM, E.N.R.

Date SPI Disclosed

Oct 17, 2012

Country

Mexico

Region

Latin America and the Caribbean

Projected Board Date

Nov 20, 2012

Environmental Category

FI-2 - Limited

Status

Pending Signing

Last Updated Date

Dec 1, 2016

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Feb 28, 2013

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The purpose of this project is to support SMEs deprived of access to finance in Mexico by supporting Navix de Mexico, S.A. de C.V. SOFOM, E.N.R. (“Navix” or the “Company”) a specialty non-bank, non-regulated financial intermediary focused on lending to local SMEs in the oil, gas and energy sectors in the southern states of Mexico. IFC will provide a loan of up to US$10 million equivalent.

Navix is a Mexican multi-purpose financial institution established in 2007. Navix provides financing to small and medium-sized enterprises in the Country through structured debt facilities. Navix’s two main business lines are project finance, which include structured loans to oil & gas and energy contractors and portfolio finance which include payroll financing, microfinance and loans to companies in other sectors of the economy.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Mexico''s access to finance is very low with only around 12% of the firms in the country having a line of credit compared to a regional median of 46%.

This project will support small and medium local suppliers with financing facilities for working capital and growth needs operating in the oil & gas and energy sector. By increasing its source of funding, contractors can secure a larger share of contract bidding as well as remaining as service providers in an industry were contracts are typically awarded to multinationals.

(i) IFC will provide long-tenor senior debt in local currency tthat will help strengthen Navix''s funding profile so as to help the company leverage and scale-up its SME operations;
(ii) Mobilization of funds: DEG is in principle interested in participating with IFC to fund Navix;
(iii) IFC''s stamp of approval, will enhance the credibility and visibility of the Company in the local and international market, and thereby increase funding alternatives, particularly important to Navix as the Company does not raise deposits.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	System in place		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The proposed investment consists of a loan of up to $10 million to Navix, a specialty non-bank, non-regulated financial intermediary focused on lending to local SME’s in the oil & gas, and energy sectors; in addition to portfolio finance for payroll deduction, microfinance and loans to companies in other sectors of the economy. Navix SME lending accounts for approximately 82% of the total portfolio and 18% for corporate. The overall portfolio risk includes a limited number of business activities that could cause potential significant adverse environmental or social impacts and risks that are diverse, irreversible, or unprecedented. The project has been categorized as FI-2 in accordance with IFC’s Environmental and Social Review Procedure. For this project the client will be required to screen loans against the IFC Exclusion List, the Mexican E&S laws and regulations and the IFC Performance Standards.

The key E&S risks and impacts derive from Navix capacity to identify and manage the potential environmental and social risks associated with its lending activities particularly lending to the oil & gas and energy service providers. Additional E&S risks and impacts of the Project derive from the capacity and systems in place to manage these risks, and the Company’s practices with regard to labor and working conditions.

Currently Navix does not have an Environmental and Social Management System (ESMS) outlining procedures, responsibilities and tools for undertaking E&S risk management of its lending activities. No staff/department has been assigned responsibility for E&S due diligence and monitoring, and training needs to be provided to all staff involved in ESMS implementation. Navix was found to be in compliance with the requirements of PS2 on labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

Contact Information
Juan José Flores
Tel: (52 55) 59802550
Fax: (52 55) 59802573
mailto:jjflores@navix.com.mx
http://www.navix.com.mx
México DF, México

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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Task Description	Anticipated Completion Date
Nominate E&S Officers/Department	On or prior to Commitment
Establish an ESMS including guidelines for its implementation	On or prior to Disbursement
Prepare Staff Training Plan	On or prior to Disbursement
Implement Staff Training	Within 3 months after Disbursement

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