37327 - Fidelity A Loan

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Summary of Investment Information

Project Number

37327

Company Name

Fidelity Bank Ghana Limited

Date SPI Disclosed

Jul 1, 2016

Country

Ghana

Region

Africa

Projected Board Date

Aug 5, 2016

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Sector

Commercial Banking - Digital Finance [Project only]

Project Description

The proposed Project consists of a senior loan of US$20 million, to an existing client, Fidelity Bank Ghana Limited (“Fidelity Ghana” or “the Bank”). Fidelity Ghana is a universal bank licensed since June 28th 2006. Prior to obtaining the banking license, Fidelity Ghana was a leading discount house in Ghana.

IFC’s investment aims to support the Bank’s lending program to SMEs.

Associated Advisory Engagement

IFC has signed a Technical Assistance Agreement with Fidelity Ghana to support the Bank’s Agency Banking strategy.

Sponsor / Cost / Location

Development Impact

1. Access to finance: The proposed investment is expected to widen access to finance for SMEs in Ghana, thereby increasing job creation and supporting economic growth.

2. Strengthening an important player in the banking sector: The project will improve Fidelity''s profile and financial strength, thereby increasing its competitiveness.

3. Demonstration effect: The project will also play a catalytic role in increasing investments by other players in the Ghanaian financial sector.

Long term funding: The proposed investment will provide Fidelity with scarce long-term funding for on-lending to SMEs. Long term funding is not readily available in the current Ghanaian context. Beyond the long term funding, very few investors are willing and able to extend the IFC investment package consisting of a loan and an AS program.

Stamp of approval: The support of Fidelity will provide a stamp of approval for an indigenous fast growing bank with a good operating record.

E&S Category Rationale / Risks and Mitigation

This project has been provisionally classified as a Category FI-2 project according to IFC’s Environmental and Social Review Procedure. Fidelity is a universal bank which provides financial services to SMEs and corporate clients across a number of sectors, predominantly services, parastatals, manufacturing, commerce and finance, and construction sectors. The E&S risks and impacts associated with these sectors are considered limited and can be readily addressed through mitigation measures. The Applicable Performance Requirements are the IFC Exclusion List, the applicable national social and environmental laws in Ghana and the Performance Standards.

The main E&S risks and impacts relate to the ability of the bank to identify and manage the E&S risks associated with its lending activities. The Bank is finalizing its E&S risk identification and management system. In order to meet IFC requirements, Fidelity Ghana is required to revise its ESMS to incorporate the IFC Exclusion List and the IFC Performance Standards. The Bank will also needs to enhance its Human Resources policies with the PS 2 requirements on labor and working conditions. These will be addressed in the E&S action plan. The Bank has an existing exposure to activities on IFC’s Exclusion List.

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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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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