37772 - MicroCred CI SL

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Summary of Investment Information

Project Number

37772

Company Name

BAOBAB COTE D'IVOIRE

Date SPI Disclosed

Feb 12, 2016

Country

Cote D'Ivoire

Region

Africa

Projected Board Date

Mar 25, 2016

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jul 13, 2024

Department

Regional Industry - FIG ME & Africa

Industry

Financial Markets

Previous Events

Approved : Jun 14, 2016
Signed : Jun 21, 2016
Invested : Jul 29, 2016

Sector

Commercial Banking - Microfinance

Project Description

The project aims at supporting the growth of MicroCred Cote d’Ivoire, a successful early-stage microfinance institution incorporated in Cote d’Ivoire in October 2010. Sponsored by MicroCred Holding, a leading network of seven microfinance institutions in China and Africa, the Company started its operations mid-2011, after the post-elections crisis of April 2011. MicroCred Cote d’Ivoire expects to expand its reach both in Abidjan and Bouake where its network already has a strong footprint, to new provinces, and to satisfy the currently unmet demand for longer term loans from small businesses. Registered as a Système Financier Décentralisé, the legal status associated with institutions providing financial services to underserved markets in the West African Economic and Monetary Union, MicroCred Cote d’Ivoire offers both credit and savings products to its clients.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.10
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

- Access to finance for micro, small and medium enterprises: The proposed Project would enhance access to financial services for MSMEs. This is expected to spur MSME and entrepreneurship growth in Cote d''Ivoire, support the Government''s private sector-led growth strategy, ultimately fostering job creation and poverty reduction.
- Demonstration Effect: By supporting an MFI that is able to sustain microfinance on commercial terms and following international best practices, the Project will help create a standard-bearer for the poorly performing microfinance sector in Cote d''Ivoire. This is expected to demonstrate that commercial MFIs subject to unfavorable regulation in a post-conflict environment can be sustainable.
- IFC''s stamp of approval: The IFC''s financial support to an early-stage MFI in post-conflict Cote d''Ivoire is expected to reshape local banks'' perception of the viability of MFIs, potentially convincing hesitant lenders of the sustainability of institutions like MCCI.

- IFC regional and global microfinance expertise: Through the Project, MCCI will have access to IFC''s global expertise in microfinance, which beyond international best standards already promoted by the Microcred network, is built on pratical investment experience, and deep understanding of some of the most advanced microfinance markets globally.
- Long-term funding solution: The proposed IFC funding represents the first commercial borrowing with over 3-year maturity MCCI will receive from an international lender. The loan will enable MCCI to provide its clientele with longer term loan products such as housing and professional equipment loans, which the MFI has so far been unable to offer.

E&S Category Rationale / Risks and Mitigation

The project consists of a local currency 5-year senior loan of up to XOF4.0 billion aimed at supporting the expansion of the lending operations of MCCI in Cote d’Ivoire. While the bank’s current portfolio includes exposures to low and medium-low risk sectors such as commerce, small manufacturing and services, given the country context and the E&S risks associated with potential lending in the agricultural sector (individual farmers and small farms), the project has been categorized as FI-2 according to IFC’s Sustainability Policy. The key risk in this project is the ability of the bank to identify and manage the E&S risks associated with client’s activities in line with IFC’s policy requirements. The applicable requirements for lending activities are the IFC Exclusion List, and relevant national environmental and social laws and regulations in Cote d’Ivoire. MCCI will also be required to comply with the requirements of Performance Standard 2 on labor and working conditions that are directly applicable to its management of its human resources.

The main E&S risks and impacts of this project relate to the ability of MCCI to identify and manage the E&S risks and impacts associated with its lending activities. Based on the E&S appraisal, MCCI has developed and satisfactorily implemented an Environmental and Social Management System in line with IFC’s policy requirements and has appointed an E&S officer responsible for implementing the ESMS within the bank. The bank’s labor policies are generally in compliance with the labor requirements set under Performance Standard 2: Labor and Working Conditions. MCCI will need, however, to formalize life and fire safety procedures.

Contacts

For Inquiries About the Project, Contact

MicroCred Cote d’Ivoire
Rue Desjardins
Abidjan 06
BP 1664 Abidjan
Cote d’Ivoire
Telephone : +225 22 41 13 45
Fax: +225 22 41 13 46

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Task Title & Description	Anticipated Completion Date
Staff Training	03/16/2016
Formalize life and fire safety procedures	06/14/2016

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