36024 - Mucap Housing

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Summary of Investment Information

Project Number

36024

Company Name

Mutual Cartago de Ahorro y Prestamo

Date SPI Disclosed

Mar 10, 2015

Country

Costa Rica

Region

Latin America and the Caribbean

Projected Board Date

Apr 30, 2015

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Aug 24, 2022

Department

Regional Industry - FIG LAC

Industry

Financial Markets

Previous Events

Approved : Apr 24, 2015
Signed : Jun 19, 2015
Invested : Oct 15, 2015

Sector

Commercial Banking - General

Project Description

The proposed investment (the “Project”) consists of a $10 million loan to Mutual Cartago de Ahorro y Prestamo (“Mucap”) for expanding housing finance in the low and middle income segment in Costa Rica. Mucap is a non-profit mutual society established in 1970 to expand access to housing finance in Costa Rica. Its core business is housing finance for the lower and middle income. The Project is expected to have development impact in the following areas: (1) increased financial access and inclusion in Costa Rica; (2) increased access to finance for low and middle income housing which requires longer tenor financing; (3) demonstration effect to spur other local financial institutions to enter this priority sector and replicate this experience.

Associated Advisory Engagement

Proposed enterprise risk management diagnostic aimed at providing guidance as to gaps and areas in which Mucap’s risk management capacities and frameworks may be improved, and proposed staged SME business development proposal to support the Mutual in developing the business and tools over the next 12 months. The Advisory Service Proposal includes support in strategy, sales model, products and services, policies and procedures and tools.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
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	Housing Finance

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

Development Impact

The Project is expected to have development impact in the following areas: (1) increased financial access and inclusion in Costa Rica; (2) increased access to finance for the underserved low and middle income housing segments that require longer tenor financing; and (3) demonstration effect to spur other local financial institutions to enter into this priority sector and try to replicate this experience, once this credit is successfully disbursed.

IFC investment will support the private sector lending capacity of Mucap by providing access to longer term funding to support on-lending to underserved low and middle income homeowners.

The loan will support Mucap''s efforts to diversify and increase the volume of its term funding and to better manage the structure of its assets and liabilities.

IFC Advisory Services will assist Mucap in strengthening its enterprise risk management in order to prudently grow its MSME loan portfolio thereby increasing access to finance to another underserved segment in Costa Rica.

E&S Category Rationale / Risks and Mitigation

The Project has been classified as Category FI-3 according to the IFC''s Environmental and Social Review Procedure. MUCAP will be required to: (i) demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions; and (ii) implement a Grievance Mechanism consistent with the provisions of PS 2 Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Guillermo Bolaños Sandoval
Chief Financial Officer
Mutual Cartago de Ahorro y Prestamo
Avenidas 3 y 5, Calle 14
Cartago, Costa Rica
Tel: (506) 2550-8481 Fax: (506) 2552-4374
Email: mailto:gblolanos@mucap.fi.cr Website: http://www.mucap.fi.cr

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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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