37152 - Al Amana IS II

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Summary of Investment Information

Project Number

37152

Company Name

AL AMANA MICROFINANCE

Date SPI Disclosed

Nov 9, 2015

Country

Morocco

Region

Africa

Projected Board Date

Dec 9, 2015

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Sep 30, 2022

Department

Regional Industry - FIG ME & Africa

Industry

Financial Markets

Previous Events

Approved : Feb 3, 2016
Signed : Sep 25, 2018
Invested : May 8, 2019

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed project involves providing a 5-year senior loan of up to Euro 6 million to Association Al Amana pour la promotion des microenterprises, (“Al Amana” or “the client”). Proceeds of the proposed investment would provide short and medium-term financing to micro and small enterprises in Morocco.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	6.55
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
Straight Senior Loan	Loans to Microfinance Borrowers

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

Development Impact

Job Creation and Poverty reduction: The proposed investment is expected to have a high impact in facilitating micro and small enterprises access to finance - an area of key strategic priority for IFC. As IFC assists Al Amana to increase and diversify its sources of funding, in a difficult economic and sector context, the project addresses the need to serve those segments of the population that lack the most access to credit; hence seeking to (i) reduce income disparities in the country, and (ii) contribute to job creation.

Demonstration Effect and Sector Development: The proposed IFC loan, in a liquidity shortage context, will send a strong signal to international investors and local commercial banks, which will help mobilize additional sources of funding to Al Amana and the sector.

The proposed project provides needed funding to the largest microfinance provider in Morocco at a time of liquidity shortage, confirms IFC''s engagement in the Moroccan microfinance sector on the IS side since 2007 and consolidates its continuous efforts on the AS side since 2009 to support the leading financial inclusion player in Morocco in increasing outreach and coping with the moving market, socio-economic and regulatory conditions. By supporting Al Amana, IFC is uniquely positioned to (a) create a strong demonstration effect to help mobilize additional funding to the sector in a time of liquidity shortage, (b) support an innovative and successful business model that promotes the financial inclusion and integration of the underserved segments of the population into the formal economy and (c) support Al Amana''s potential transformation in line with international best practices which should create a strong local standard/benchmark.

E&S Category Rationale / Risks and Mitigation

The proposed project has been classified as category FI-3 according to the IFC Environmental and Social Review Procedure. The overall portfolio risk is considered to be low and to carry no adverse environmental and social impacts. The proposed project is a Senior Loan to Al Amana, an IFC client and the largest microfinance institution in Morocco, to help the client scale up its activities in microfinance. Al Amana’s current portfolio entails low environmental and social risk sectors including cattle and sheep breeding, sale of clothing, sale of various goods and articles, and fashion and dressmaking. The overall portfolio risk is considered to be low and to carry no adverse environmental and social impacts. For this project, Al Amana will be required to screen financing activities against the IFC Exclusion List and national environmental and social laws and regulations. Al Amana will be required to: i) revise and implement the ESMS to ensure that lending provided also complies with national E&S laws (in addition to the IFC Exclusion List), ii) continue to ensure an ESMS Officer is in charge of Environmental and Social matters at all times, iii) continue to comply with the requirements of the Performance Standard 2 - Labor and Working Conditions, and (iv) continue to submit a periodic report as per a format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Mr. Youssef Bencheqroun
Chief Executive Officer
Al Amana

Cité Yacoub ElMansour,
40 Avenue Al Fadila,
Rabat 10130, Morocco
Telephone: +212 537 289 500
Fax: +212 537 289 411/12/13

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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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