32071 - GFO Loan

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Summary of Investment Information

Project Number

32071

Company Name

GRUPO FACTORING DE OCCIDENTE S A S

Date SPI Disclosed

Oct 3, 2012

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Nov 5, 2012

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 12, 2012
Signed : Apr 17, 2013
Invested : Jun 7, 2013

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The proposed Project consists of a senior loan of up to US$5 million to Grupo factoring de Occidente (“GFO” or the “Company”), one of the first factoring companies established in Colombia.
The Project will allow the Company to continue providing liquidity to SMEs through factoring operations The Company currently seeks long-term funding to support the expansion plan for 2012-2013, and to diversify its funding sources.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
Equity

Development Impact

IFC''s long-term financing is expected to bring high development impact by: (i) enhancing GFO''s capacity to support productive small and medium enterprises, resulting in higher growth, employment generation and poverty reduction; (ii) creating a demonstration effect for other non regulated financial institutions in Colombia by bringing best practices in both insurance and SEMS to GFO; and (iii) disseminating IFC''s global knowledge and expertise in SME products.

E&S Category Rationale / Risks and Mitigation

The proposed project consists of a US$ 5 million loan to GFO, a non regulated finance company specialized in factoring operations. GFO focuses its operations in providing liquidity to small and medium companies in economic sectors including construction and real estate, manufacturing, food & beverages, machinery, mining, oil and gas and transport among others. GFO SME factoring accounts for approximately 94% of the portfolio and 6% accounts for microfinance. The factoring portfolio is highly diversified between issuers and payers; in 2011 the company provided factoring services to 550 issuers and 637 payers with an average transaction size of US$2,800. The project has been categorized as an FI-3 in accordance with IFC''s Environmental and Social Review Procedure. The overall portfolio risk is considered to be of low environmental and social risks; however, there is some exposure to factoring operations that could be considered of medium environmental and social risk (e.g. factoring provided to oil and gas, mining, and energy service SME''s companies) and as such the client will be required to screen the operations against the IFC Exclusion List and the Colombian environmental and social laws and regulations. In addition, the client will be required to enhance its Grievance Mechanism procedure and commit to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Johanna Montes
CFO Grupo Factoring de Occidente
Calle 93B No. 12 -30
Oficina 203 - 205
Bogota, Colombia
Telephone: (+571) 621-8080
Fax: (+571) 257-4577

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