34023 - Sesame MSME Financing Package

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Summary of Investment Information

Project Number

34023

Company Name

Company Name Pending

Date SPI Disclosed

Oct 21, 2013

Country

Country Name Pending

Region

East Asia and the Pacific

Projected Board Date

Nov 14, 2013

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Sep 30, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Oct 31, 2014
Signed : Apr 20, 2014
Invested : May 30, 2014

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed investment entails a RMB-denominated loan in an aggregate amount of up to US$250 million equivalent to two micro credit companies (each the “Company”) to support/expand the their lending program to micro, small and medium sized enterprises (“MSMEs”).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	250.0
Equity

Development Impact

- Increase financial inclusion and access to finance for large underserved markets segments: IFC''s funding support will help the Companies to grow its lending business and increase access to finance for MSMEs.
- Facilitation of global trade and RMB internationalization: IFC will support the Companies to expand business into other markets, and build it into a platform that can provide branchless banking to global MSMEs and can channel capital not only within China but also away from China to finance MSMEs in other emerging markets.
- Demonstration Effects of Introducing a New Business Model: this will be the first large-scale use of "big data" to successfully reach millions of unserved and underserved MSMEs in China and in emerging markets generally. The success of the Companies will have extensive demonstration effects across emerging markets.

- Comprehensive and long term support/partnership: in addition to different forms of funding, IFC will connect the Companies to its extensive global FI network, introduce international best practice and provide global comparators and benchmarks.
- Local currency financing: local currency funding has been a major constraint for micro credit companies in China, constraint their expansion, exposes them to volatility in funding and profitability, and increase their sustainability risks. IFC''s direct 2 year local currency financing will provide stable funding support for the Companies to grow lending business and to serve more MSMEs; ii) with the extensive global network, IFC can mobilize more financing to support the Companies'' business expansion; and iii) IFC''s partnership will have strong effect of stamp of approval and will provide comfort to other potential financers to the Companies.
- Global network: IFC''s extensive network with financial institutions globally and established relationship with the regulators of the emerging markets will greatly facilitate their future global expansion
- Industry knowledge: IFC is a leading investor in microfinance, is a global leader of credit reporting, has extensive experience in global payment sector, and can share knowledge, expertise and best practices with the Companies
- Capacity building: IFC can help the Companies i) develop and offer more innovative financial products to better serve MSMEs and disadvantaged groups such as women entrepreneurs; ii) introduce energy efficiency, renewable energy and other resource efficiency financing; iii) strengthen its corporate governance; and iv) develop an E&S system.

E&S Category Rationale / Risks and Mitigation

The proposed project entails a RMB-denominated senior loan facility to the Companies which provide short-term financing mainly to MSMEs doing retail and wholesale business activities. The project has been classified as an FI-3 project according to IFC environmental and social review procedure. These Companies will be required to implement procedures to ensure their financing activities are in compliance with IFC Exclusion List and applicable national environmental and social laws and regulations.

Contacts

For Inquiries About the Project, Contact

Name: Mr. Feng LI
Title: Director
Telephone: 86 1862-688-1390
Address: No.18 Wantang Road, Hangzhou, Zhejiang, China

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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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