32942 - Earthport

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Summary of Investment Information

Project Number

32942

Company Name

EARTHPORT PLC

Date SPI Disclosed

May 29, 2013

Country

World Region

Region

Global

Projected Board Date

May 22, 2013

Environmental Category

C - No Impact

Status

Completed

Last Updated Date

Sep 30, 2022

Department

TMT, Venture Capital & Funds

Industry

Financial Markets

Previous Events

Approved : May 22, 2013
Signed : May 28, 2013
Invested : Jun 5, 2013

Sector

Money transfer, remittances

Project Description

Earthport is creating a new global infrastructure to make small international payments much more efficient. The company connects the domestic electronic interbank payment systems (Automated Clearing Houses – “ACH”) that exist in almost all countries to one global network. The company completed the development of its technology platform and has been integrating with various countries’ ACH systems. Earthport is now looking to the IFC to support its further expansion in developing countries.

Sponsor / Cost / Location

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

Development Impact

(i) Reducing cost of migrant remittance: Earthport''s payment platform significantly reduces the cost of cross boarder money transfers through banks.

(ii) Supporting SMEs: Earthport''s solution supports SMEs in developing countries to engage in international trade. Currently, the high cost and delays for international payments create barriers for the small exporters and traders. Earthport will provide them a payment solution which is much faster and at lower cost.

(iii) Financial Inclusion: Because banks do not have efficient systems to transfer small transfers, currently the vast majority of migrant remittances is sent and paid in cash through specialized money transfer operators. Since these operators potentially compete with banks, they have no incentive to encourage senders and recipients to open bank accounts. Earthport''s system for the first time creates a solution that banks can use to effectively offer migrants a competitive money transfer service and compete with the cash-based money transfer companies. Migrants and their families gain a lower cost service and are incentivized to open bank accounts. The solution will also make it commercially feasible or more attractive for the banks to serve low income consumers. Earthport thereby provides a tool to implement the financial inclusion program of banks and governments.

(iv) Supporting banks in developing countries: The conversion of cash-based remittances into account transfers will increase the deposit base of financial institutions in the receiving developing countries. This makes money available for lending to SMEs, creates hard currency income of the banks to support trade credit, and directs savings and other deposits into bank accounts. At the same time it significantly increases the multiplier effect of remittance flows.

(i) Leveraging IFC''s relationship with financial institution clients: Important synergies exists between IFC financial institution clients and Earthport. IFC will assist the company (and its clients) by introducing bank and payment provider clients in developing countries.

(ii) Global knowledge and support for regulatory challenges: Earthport''s expansion into developing countries where payment regulation is often still forming represents significant risk and challenge. Earthport will benefit from IFC''s support in understanding financial services policies and regulation, guidance in complying with local regulation and support and shelter against political risk.

E&S Category Rationale / Risks and Mitigation

This project will yield environmental benefits in the form of less energy usage and greenhouse gas emissions than non-electronic remittances would yield. Otherwise, with no infrastructure owned by Earthport, the key E&S risks and impacts will be in the management of Earthport''s human resources, leased spaces, and equipment, and those risks and impacts are expected to be low. Earthport will be required to adapt its human resources policies and procedures from the UK to its various operations in Asia, Africa, and Latin America, and otherwise to manage its facilities, workers, and contractors in compliance with IFC Performance Standards.

Contacts

For Inquiries About the Project, Contact

Hank Uberoi, Executive Director
21 New Street, London EC2M 4TP
Tel: +44 (0)20 7220 9771
Fax: +44 (0)20 7220 9701
mailto:hank.uberoi@earthport.com
http://www.earthport.com

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