34884 - TRM Loan II

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Summary of Investment Information

Project Number

34884

Company Name

Kaebauk Investimentu no Finansas, S.A.

Date SPI Disclosed

Oct 30, 2015

Country

Timor-Leste

Region

East Asia and the Pacific

Projected Board Date

Dec 4, 2015

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Dec 22, 2015
Signed : Jan 21, 2016
Invested : Jun 23, 2016

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

IFC proposes to provide IFC A Loan to Tuba Rai Metin (“TRM” or the “Company”), a leading NGO micro finance institution (“NGO MFI”) in Timor-Leste or Kaebauk Investimentu No Finansa, SA (“KIF”) in case microfinance operations is transferred from TRM to KIF, which provides inclusive financial services primarily to poor rural Timorese women and small businesses. TRM’s mission is to provide Microfinance and allied services for large number of the poor in a sustainable and regulated manner to improve the quality of lives of families and empower women.

TRM has 9,940 clients as of August 2015 with a strong gender focus with more than 90 % of the clients being women. TRM offers individual business loans targeting microenterprises and small businesses. These loans are collateral free with monthly repayments. In addition, it offers motorbike loans, agriculture loans (short-term and long-term) and house improvement loans.

The proposed project aligns well with IFC’s strategy for Timor-Leste supporting the expansion and commercial transformation of TRM, providing inclusive financial services primarily to poor rural Timorese women and small businesses.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.0
Equity

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

1) Longer-term funding: The proposed loan''s tenor and grace period is longer than most lenders'' loan. It would help the Company''s funding plan until it builds internal capacity to mobilize deposits.
2) Stamp of approval: Provision of the proposed loan would endorse IFC''s support and commitment towards TRM''s effort to transform into a commercial microfinance entity. It sends a signal to TRM, the Central Bank and other investors about IFC''s commitment to support TRM and recognizes the positive progress that the Company has made toward transformation.
3) IFC industry expertise (investment and advisory for commercial MFIs): Provision of the proposed loan would endorse IFC''s support and commitment towards TRM''s effort to transform into a commercial microfinance entity. It sends a signal to TRM, the Central Bank and other investors about IFC''s commitment to support TRM and recognizes the positive progress that the Company has made toward transformation.

E&S Category Rationale / Risks and Mitigation

This transaction involves a US$ 1M loan facility to TRM, a micro finance company that provides loans to individuals with average size of circa US$ 1,000. Over 90% of TRM customers are women engaged in a variety of diversified activities such as kiosk, bakery/food outlets, rice production, motorbike taxi, guest house, restaurant, fisheries, weaving, auto repair workshop, retail selling of fuel etc. The overall portfolio risk of the company is considered to be low and the project has therefore been categorized as FI-3 in accordance with IFC’s Environmental and Social Review Procedure. For this project, TRM will be required to screen loans against the IFC Exclusion List and the National applicable environmental and social laws and regulations, and will also be required to demonstrate that its labor practices are consistent with IFC Performance Standard 2: Labor and Working Conditions

Contacts

For Inquiries About the Project, Contact

Angelo Soares
mailto:soaresangelo.kif@gmail.com

Tuba Rai Metin
Next to New Embassy of China,
Aitarak Laran,
Dili (Timor-Leste)

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