37649 - Bradesco SME

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Summary of Investment Information

Project Number

37649

Company Name

BANCO BRADESCO S.A.

Date SPI Disclosed

Nov 20, 2015

Country

Brazil

Region

Latin America and the Caribbean

Projected Board Date

Dec 21, 2015

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 18, 2015
Signed : Dec 21, 2015
Invested : Dec 28, 2015

Sector

Commercial Banking - General

Project Description

The project’s main objective is to support SME lending and local economies through a key financial intermediary, Banco Bradesco S.A. (the “Bank” or “Bradesco”). Addressing the lack of access to finance for SMEs is a strategic priority for IFC as it is a clearly identified constraint to shared prosperity and poverty reduction observed in many emerging economies.

The Project will establish a relationship between IFC and Bradesco, one of the most solid financial groups in Latin America and that has deep footprint in the Brazilian economy.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	150.0
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	Loans to SME Borrowers

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

Development Impact

By working with a Bank with significant national reach, the Project is expected to have a high development impact, in particular as it will enhance access to finance for SMEs in local economies. SME finance is a key priority for IFC and this project contributes to reducing the gap because it provides long-term support for SME lending through a financial intermediary that has one of the largest reaches in Brazil. This project is particularly relevant in the current economic recession.

- Funding diversification and funding mobilization: IFC will leverage impact by mobilizing third party funding to expand the supply of long-term finance in Brazil.

- Long-term partnership: through the project, IFC will engage and further develop its relationship with one of the largest and most important financial institutions in Brazil. Relationships with the largest and most relevant players allows for the multiplication of its impact.

- Social and Environmental Expertise: IFC will support the Bank in enhancing its Environmental and Social management systems

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The proposed project will support Banco Bradesco SME activities focused on its local productive arrangements (APL) portfolio. APLs are Brazilian government certified cluster activities organized in a given territory working predominantly around a specific productive activity.

Bradesco''s SME sub-projects represent 28.5% of the bank’s credit operations. The APL portfolio accounts for 2.1% of that exposure, with average transaction size of approximately USD 21 thousand. Supported sectors in this portfolio range from industrial activities such as textiles, food & beverages, Manufacturing of handicrafts and services, including a possible 4% exposure to excluded activities, which will be managed as part of this project in accordance with IFC''s Sustainability Framework.

The potential E&S risks associated with the project are expected to be of a medium to low nature, therefore the Project has been categorized as FI-2 according to the IFC’s Sustainability Policy.

Key risks and impacts of the project derive from the Bank’s capacity to enhance its ESMS in order identify and manage potential environment and social risks associated with the APL sub-projects.
Banco Bradesco is an Equator Principles signatory and has developed an ESMS in line with the Brazilian E&S laws and regulations. As part of the proposed project, the client will be required to enhance ESMS procedures for the APL asset class to include screening against the IFC Exclusion list. IFC will support Bradesco to manage it's exposure to the Exclusion List.

Contacts

For Inquiries About the Project, Contact

Roberto Medeiros Paula
Banco Bradesco S.A.
Avenida Paulista, 1450, 2a SL, São Paulo, SP, Brazil
Tel: + 55 11 2178-5249
Fax: + 55 11 2178-5227
Email: mailto:4900.roberto@bradesco.com.br

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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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Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

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Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

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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Enhance ESMS to screen APL sub-projects against the IFC Exclusion List

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