37282 - ADOPEM Loan

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Summary of Investment Information

Project Number

37282

Company Name

Banco de Ahorro y Credito ADOPEM

Date SPI Disclosed

Oct 5, 2015

Country

Dominican Republic

Region

Latin America and the Caribbean

Projected Board Date

Nov 3, 2015

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jan 22, 2023

Department

Regional Industry - FIG LAC

Industry

Financial Markets

Previous Events

Approved : Nov 10, 2015
Signed : Nov 16, 2015
Invested : Jul 25, 2016

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed project consists of a local currency senior loan of up to DOP 450 million (approximately US$10 million) for up to seven years (the “Project”) to Banco de Ahorro y Credito Adopem SA (“ADOPEM” or the “Bank”), a leading microfinance institution in the Dominican Republic and a long-standing partner of IFC. The purpose of the Project is to support the Bank’s lending program to micro and small enterprises at the bottom of the pyramid.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	9.91
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

This project is expected to have the following developmental impact:
1. Access to finance: ADOPEM provides financial services to low income segments of the Dominican population living in rural areas with limited or no credit opportunities. Moreover the Project will contribute creating a credit and savings culture amongst this low-income population; and;
2. Greater Commitment to Creating Opportunities to Disadvantages Groups: The Project will support productive small enterprises and low-income micro entrepreneurs which consequently will positively impact employment and income generation in the frontier regions where ADOPEM operates.

- Long-term Funding to Support Scale-up of Business Model: IFC would continue to provide not only the funding to fuel the Bank''s growth but also a stamp of approval that has allowed ADOPEM to attract new sources of funds;
- Local Currency financing: IFC will provide the Loan in local currency at long-term maturity generally not available in the market. This is especially important for ADOPEM, given that their lending is entirely focused on serving borrower in the domestic market, whose earnings are therefore mainly in domestic currency. A local currency loan will help the Bank to mitigate currency mismatches in case of exchange rate depreciations; and
- Knowledge Sharing: Through this project IFC will continue to bring and share its global and local microfinance expertise with the Bank.

E&S Category Rationale / Risks and Mitigation

This project involves support to micro enterprises in Dominican Republic. The overall portfolio risk is considered to be low, with limited adverse environmental and social impacts, and as such the project has been classified as Category FI-3 according to the IFC''s Sustainability Framework. The company is a former IFC equity client (Proj. #20043) and has implemented the Environmental and Social Management Systems (ESMS), which integrates the screening against the IFC Exclusion List into its credit process. As part of this project, the Client will be required to follow IFC’s labor practices under PS2: Labor and Working Conditions and to enhance its ESMS to check for compliance against national laws.

Contacts

For Inquiries About the Project, Contact

Ms. Mercedes Canalda de Beras Goico
Chief Executive Officer
Banco de Ahorro y Crédito Adopem, S.A.
Calle Heriberto Pieter No. 12
Ensanche Naco
Santo Domingo, Dominican Republic
Tel: +1-809-563-3939
Fax: +1-809-547-2922
Website: http://www.bancoadopem.com.do

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

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