34748 - Amret MFI Equity

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Summary of Investment Information

Project Number

34748

Company Name

AMRET PLC

Date SPI Disclosed

Mar 26, 2014

Country

Cambodia

Region

East Asia and the Pacific

Projected Board Date

May 9, 2014

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Nov 30, 2016

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : May 14, 2014
Signed : Sep 15, 2014
Invested : Mar 18, 2015

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The Project is an equity investment in Amret Company Limited (“Amret” or the “MFI”).
Amret is the 2nd largest pure microfinance institution (“MFI”) in Cambodia by gross outstanding loans and number of borrowers (Cambodia Microfinance Association’s report as of December 2013). It is one of the 7 MFIs in the country licensed to take deposits. Amret’s strategy is to provide a wide range of financial services to low income individuals as well as small and medium entrepreneurs, contributing significantly to economic and social development in Cambodia. As of December 2013, Amret had 116 offices in 22 capital/provinces across Cambodia.

Through the investment IFC will provide support to Amret in its transformation and development plan.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
Equity	17.50

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Microfinance Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

- Contribute to the development of the microfinance sector in Cambodia: Through this investment, IFC will broaden its support to the microfinance sector demonstrating increased confidence and support for the sector as a whole.
- Increased access to finance for micro clients, including in rural areas and agriculture sector: As of September 2013 Amret served over 300,000 borrowers of which more than 50% of its clients are engaged in the agriculture sector and 80% are women borrowers; and 110,000 depositors of which 54% are women depositors. Amret is expected to reach about 340,000 borrowers by 2016. Specific indicators to measure and monitor development impact of the Project such as additional clients, additional women clients, additional SME clients and additional clients in agriculture sector will be finalized with the client.
- Unique role in providing commercially-oriented expertise: IFC will contribute to the sector''s further diversification of investor base and will bring a more commercially-oriented approach, as well as international expertise and experiences in financial sector, while maintaining the MFIs'' social mission and values.

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement	Not Available	Not Available	Not Available
Access to Finance: Outstanding Microfinance Portfolio (#)	Outstanding Portfolio (#)	Not Available	Not Available	Not Available
Access to Finance: Outstanding Microfinance Portfolio ($)	Outstanding Portfolio ($)	Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

This project involves a potential IFC equity investment in a microfinance institution in Cambodia and the overall portfolio risk is considered to be medium. The project has therefore been categorized as FI-2 in accordance with IFC’s Environmental and Social Review Procedure. The microfinance institution currently offers mainly individual and group micro loans, however its SME lending business is expecting to grow rapidly over time. In terms of sector exposure, over half of the total loan portfolio is focused on the agriculture sector. For this project the client will be required to screen and monitor its lending activities against the IFC Exclusion List and the applicable E&S laws and regulations.

The main E&S risks and impacts of the project derive from the E&S risks of the microfinance’s lending activities, the capacity and system in place to manage these risks, and its practices with regard to labor and working conditions. The company has developed an E&S policy and it is currently implementing adequate E&S procedures to assess and when necessary, mitigate the E&S risks associated with the lending activities. The E&S procedures, among other things, require the company to screen all potential loans against an internal exclusion list and ensure compliance with national E&S laws and regulations. The microfinance’s E&S risk management is considered overall satisfactory. The company’s labor management was found to be consistent with the requirements of IFC Performance Standard 2 on Labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

c/o Mr. Chea Phalarin
Chief Executive Officer
Amret Company Limited
#35BA, St. 169, Veal Vong, 7 Makara,
Phnom penh
Kingdom of Cambodia
Tel: (855) 23 880 942 Fax: (855) 23 881 342
Email: mailto:phalarin.chea@amret.com.kh

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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.

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Task Description	Anticipated Completion Date
Confirm in writing that an E&S Officer has been appointed	On or prior to Commitment
Add the missing IFC Exclusion List activities in the internal Exclusion List	On or prior to Commitment
E&S officer to undertake the IFC on Line E&S training	Within 4 months from Commitment

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