32395 - Bandelta

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Summary of Investment Information

Project Number

32395

Company Name

Banco Delta S.A.

Date SPI Disclosed

Apr 30, 2013

Country

Panama

Region

Latin America and the Caribbean

Projected Board Date

May 30, 2013

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : May 31, 2013
Signed : Aug 29, 2013
Invested : Oct 15, 2013

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The project consists of a proposed loan of up to US$6 million to Banco Delta S.A. (the “Bank). The loan will be used to finance the growth of the microfinance and small enterprise portfolio of the Bank.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	6.0
Equity

Development Impact

IFC''s loan would help increase financing to underserved micro and small companies through a sector leader.
Employment generation: Contribute to the creation of new jobs in the micro and small business segments, which typically provide the majority of employment in developing countries.
Support transformation of MSMEs to the formal sector since lack of credit is the main barrier for an MSME to become formal.

IFC''s role in the project would be to provide medium term funding to support the leading microfinance company in Panama to continue to expand its reach to the underserved micro and small companies in Panama. This will enable IFC to establish a long-term relationship with the group and help improve microfinance penetration in Panama as well as support its regional expansion plans.

In terms of additionality, IFC''s loan will help diversify the Company''s funding base. This first engagement with a microfinance institution in Panama will also provide a stamp of approval for further investments in the microfinance sector in Panama.

E&S Category Rationale / Risks and Mitigation

The proposed investment consists of a credit line for up to US$9 million for up to five years, intended to be used for microfinance and SME's. Bandelta's main business segment is microfinance (57%), followed by retail (28%) which includes housing loans, and SME's (15%).

The project has been categorized as FI-2 in accordance with IFC's Environmental and Social Review Procedure. The overall portfolio risks includes a limited number of business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site specific, largely reversible, and readily addressed through mitigation measures. For this project Bandelta will be required to screen the loans against the IFC Exclusion List and the Panamanian environmental and social laws and regulations.

The key E&S risks and impacts derive from Bandelta's capacity to identify and manage the potential environmental and social risks associated with its lending activities particularly lending to SME's which typically have low to medium environmental and social risks. Additional E&S risks and impacts of the Project derive from the capacity and systems that are in place to manage these risks, and the Bank's practices with regards to labor and working conditions.

At present, Bandelta does not have an Environmental and Social Management System (ESMS) outlining the procedures, responsibilities and tools for undertaking E&S risk management of its lending activities. As part of this investment, the Bank will be required to implement an Environmental and Social Management System to ensure that its loans are in compliance with the applicable environmental and social requirements and to continue its commitment to applying the labor standards.

Contacts

For Inquiries About the Project, Contact

Juan Lavergne
Vicepresidente de Finanzas y Tesorería
Banco Delta, S.A.
Tel. (507) 340-0083
Fax. (507) 340-0019

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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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