37435 - Alter Modus

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Summary of Investment Information

Project Number

37435

Company Name

ALTER MODUS D.O.O.

Date SPI Disclosed

Apr 19, 2016

Country

Montenegro

Region

Europe

Projected Board Date

Jun 16, 2016

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Jun 30, 2016
Signed : Jul 21, 2016
Invested : Dec 15, 2016

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

Microcredit Financial Institution Alter Modus DOO (“Alter Modus”) is the leading microfinance lender in Montenegro with an outstanding portfolio of approximately EUR 31.4 million and close to 17,600 active borrowers in the end of 2015. The project seeks to partner with Alter Modus as a platform to provide access to finance to the segment underserved by traditional commercial banks.
The proposed IFC financing consists of a senior loan of up to EUR 4 million for on-lending to micro and small enterprises (MSEs) in Montenegro.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	4.46
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

IFC impact is expected to:
i. Stimulate development and economic growth in the country by enhancing the lead MFI''s ability to support access to finance for micro and small business as the major economic contributors.
ii. Create job opportunities for entrepreneurs and individuals directly impacting poverty reduction.
ii. Stimulate demonstration effect for the other MFIs in the country to introduce best standards in environmental and social systems.

IFC''s role in the project is multifold to:
i. Support very important microfinance player in the market to diversify its long-term funding sources.
ii. Support the MFI in growth plan to finance micro and small businesses. Strengthen access to finance in the stressed sector.
iii. Strengthen Alter Modus'' position and growth prospects by transferring IFC''s experience in microfinance.
iv. Continue to improve Alter Modus'' operational procedures and practices by requiring implementation of best practices in environmental and social management systems.

E&S Category Rationale / Risks and Mitigation

The proposed investment consists of a EUR 4 million senior loan for on-lending to micro and small enterprises (MSEs) in Montenegro. The lending profile presents E&S risks with limited adverse environmental and social risks or impacts and therefore the project has been classified as category FI-3. The client will be required to enhance its Grievance Mechanism Procedure and commit to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Ana Kentera
Chief Executive Officer

Alter Modus d.o.o
Bulevar Ivana Crnojevica 2, Podgorica, Montenegro
Tel: 382 20 655 280
Fax: 382 20 655 260
E-mail: mailto:ana.kentera@altermodus.me

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Fax: 202-974-4384
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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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