33367 - DARP SPV CC

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Summary of Investment Information

Project Number

33367

Company Name

FIDEICOMISO CONCILIARTE

Date SPI Disclosed

Mar 28, 2013

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Apr 29, 2013

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Jun 14, 2013
Signed : Oct 31, 2013
Invested : Nov 18, 2013

Sector

Distressed Assets

Project Description

The existence of a strong Distress Assets (“DA”) market constitutes an important element contributing to the appropriate performance of the financial industry in any economy. In this context, the proposed project is part of IFC’s program to promote the development of a DA market in Colombia and Peru. To achieve this, IFC would be partnering with Credigy Investments LLC (“Credigy”) and Covinoc (the “Company”), an IFC existing client to acquire Non-Performing Loan portfolios in the previously mentioned markets.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	36.0
Equity	24.0

Development Impact

The development impact of IFC''s investment in this Project is expected to be high given that:
- Allow financial intermediaries in Colombia and Peru to offload their NPLs, and therefore improve their liquidity and capacity to originate new loans.
- Through the appropriate resolution of NPLs, the project would allow a large number of individuals to be able to avoid loosing their assets (their homes in most cases) and ultimately to re-enter the banking system.
- The proposed investment would contribute to the further development of the Distressed Assets market in Emerging Markets, resulting in an increase of both the number of NPL transactions and the players, in this market.

IFC''s value addition is expected to be multifold and can be summarized in the following points:
- Liquidity: Providing liquidity for distressed assets investments when liquidity is scarce for these types of investments. Accordingly, IFC would be enabling further private sector investment in this sector.
- Market Support: The vast number of opportunities for distressed assets investments in the United States and Western Europe is significantly crowding out other regions, including Latin America. IFC''s participation in the project would send a strong signal to the market. This would significantly support the appropriate evolution of the regional distress assets market, and contribute to the stability of the financial industry.
- Local Knowledge: IFC has been active in the region''s markets and is familiar with the players and the regulatory environment. IFC can also leverage its client network significantly increasing the servicer''s ability to source deals, while at the same time provide another value added service to its customers.

E&S Category Rationale / Risks and Mitigation

This Project involves the creation of a Special Purpose Vehicle (SPV) to purchase and service portfolios of non-performing loans in Colombia and Peru. The prospective portfolios are likely to consist of consumer loans, including mortgages, and small enterprises. The E&S risks are expected to be generally low, although some assets and commercial entities may have E&S risks. The project has therefore been categorized as FI-2 in accordance with IFC’s Sustainability Framework.

The commercial entities with which the company works may have E&S risks, although Covinoc focuses its resources on retail loan collections, with a small exposure to SME assets. Covinoc developed an ESMS, which includes a system to identify and reject specific transactions that fall under the exclusion list and the OFAC list. Covinoc seeks to identify E&S risks of some assets including SMEs and properties and as part of this project will formalize this process to apply it in a more systematic way.

Contacts

For Inquiries About the Project, Contact

John Jairo Aristizabal
CEO Covinoc
Carrera 11 No 87 – 51 piso 2
Bogota, Colombia
Telephone: +57 1 633 8888
Fax: +571 286 2239

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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.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date
Staff Training	09/01/2013

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