31941 - JFLC Loan

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Summary of Investment Information

Project Number

31941

Company Name

Jiangsu Financial Leasing Co., Ltd.

Date SPI Disclosed

Apr 27, 2012

Country

China

Region

East Asia and the Pacific

Projected Board Date

May 28, 2012

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : May 31, 2012
Signed : Jun 21, 2012
Invested : Mar 8, 2013

Sector

Leasing Services

Project Description

The proposed project will likely consist of IFC loan financings in RMB to Jiangsu Financial Leasing Co., Ltd (“JFLC” or the “Company”) to support its business growth and improve its financing structure. JFLC, established in June 1985, is a leading financial leasing company in China and an existing IFC client.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	49.46
Equity

Development Impact

Expanding access of finance to SMEs: SMEs contribute significantly to China''s GDP growth but have been under-served by commercial banks. The growth of JFLC, an SME focused leasing company, can help address the SMEs'' financing difficulty by providing flexible alternative channels;
Supporting economic growth in frontier regions: Frontier regions have much lower financial service penetration in China. In light of the credit tightening in China, leasing addresses the local demand for funding, supports the continued growth of local economy, and thus mitigates widening gap between frontier regions and coastal regions;
Promoting the development of the leasing sector: Leasing penetration is only 3.8% in China. IFC''s further investment in JFLC will have a strong development impact in promoting the development of leasing sector in China. JFLC has maintained a sound business record and is expected to further improve its risk management capability. JFLC could become a model institution for other leasing companies to emulate, with a demonstration effect to stimulate the healthy development for the entire leasing sector.

Local currency funding: IFC can provide long-term local currency funding to the Company, which is not easily accessible locally but critical to the sustainable growth of leasing companies;

Strategic long-term partnership: IFC acts as a critical strategic investor that can provide both equity investment and long-term debt financing to the Company, the latter is particularly important to the company in light of the current macro environment;

Stamp of approval: IFC''s further investment to the Company can help the Company raise long-term funding from local banks by setting a model case and enhance the Company''s image in the investment community.

E&S Category Rationale / Risks and Mitigation

This transaction involves a senior loan to a financial leasing company and the overall portfolio risk is considered to be limited by the nature of its businesses. The project has therefore been categorized as FI-2 in accordance with IFC’s Environmental and Social Review Procedure. JFLC provides equipment financial leasing services to business clients in sectors such as manufacturing, health care, education, transport and storage. By leasing assets, they are mostly industrial machinery, medical equipment, educational devices and printing machines. For this project the client will be required to screen and monitor its leasing activities against the IFC Exclusion List and applicable Chinese E&S laws and regulations regarding the operation and maintenance of its leased equipment.

The main E&S risks and impacts of the project derive from the E&S risks of the company’s leasing activities, the capacity and systems in place to manage these risks, and the company’s practices with regard to labor and working conditions. Under the requirements of the existing IFC investment, the company has appointed an E&S officer and developed an E&S policy that is commensurate with its leasing activities. The policy also requires the company to heighten its E&S review and monitoring when providing leasing to businesses of potential high E&S risks such as large infrastructure development projects, although its portfolio doesn’t appear to have exposure to such activities. To improve the implementation of its E&S policy, the company is suggested to incorporate in its operations manual an E&S screening procedure and to conduct training for its staff. The company’s labor management was found to be consistent with the requirements of IFC Performance Standard 2 on Labor and Working conditions.

Task Description	Anticipated Completion Date
Provide evidence that an E&S screening procedure/tool has been included in JFLC's operational manual (or similar document) for the implementation of JFLC's E&S policy	on or prior to IFC disbursement
Provide evidence that all operational staff has been trained on JFLC's E&S policy, including the above screening procedure/tool	on or prior to IFC disbursement
Provide evidence with examples of application of JFLC's E&S policy	within 6 months of IFC disbursement

Contacts

For Inquiries About the Project, Contact

Jiangsu Financial Leasing Co., Ltd
26/27F, No.128 Shanxi Road, Nanjing
Jiangsu Province, P.R.China

Tel: 86-25-8681-6901
Fax: 86-25-8681-6907
Web: http://www.jsleasing.cn

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

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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