37934 - Tanner CL II

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Summary of Investment Information

Project Number

37934

Company Name

Tanner Servicios Financieros S.A.

Date SPI Disclosed

Mar 22, 2016

Country

Chile

Region

Latin America and the Caribbean

Projected Board Date

Apr 29, 2016

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG LAC

Industry

Financial Markets

Previous Events

Approved : May 12, 2016
Signed : May 31, 2016
Invested : Jun 10, 2016

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The proposed project consists of a 5-year loan for up to US$50 million to be provided by IFC to Tanner Servicios Financieros SA (“Tanner” or the “Company") and a 3-year loan for up to US$50 million to be mobilized from other lenders under IFC''s B lender program to support its lending activities to small and medium enterprises (“SMEs”) in Chile.

Tanner is one of the leading Chilean non-banking financial institutions, with a market share of 8% in the factoring market as of December-end 2015 and among the main players in the country (holding the 6th place in 2015). Diversified business model focused on secured lending that includes Factoring, Leasing, Corporate lending and Auto Financing. In addition, the Company offers stock, commodities and insurance brokerage services through subsidiaries. As of December 2015, Tanner has over 51.200 active clients, mainly Chilean SMEs.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
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

IFC''s long-term financing is expected to bring high development impact by enhancing Tanner''s capacity to support access to finance for SMEs, resulting in higher growth, employment generation and poverty reduction. Furthermore, the project would also generate a demonstration effect by signaling other private investors about the potential presented by both the factoring and the SME sector in Chile.

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 involves a US$50 million to Tanner Servicios Financieros, a Chilean company focused on SME financing, leasing and factoring operations. The project will support the company’s SME lending, enhancing access to short-term and long-term credit (leasing). Potential E&S risks and impacts associated with the project are likely to be of a medium to low nature, therefore it has been categorized as FI-2 according to the IFC’s Sustainability Framework. Tanner’s portfolio for SME's and other corporate entities is mostly concentrated in the financial sector (32%) with exposure to agriculture, manufacturing and services representing, respectively, 16%, 11% and 11%. Assets are mostly composed of short tenor transactions with 45% of credits maturing under 180 days and majority of remaining assets not exceeding 3 years tenor.

Tanner has an existing board approved ESMS for its leasing operations in line with IFC requirements since 2014. As per the proposed project, the client will be required to extend its E&S management system to its factoring and SME commercial loans operations. Applicable requirements for the project are the Chilean Environmental and Social Laws and Regulations and the IFC Exclusion list in addition to commitment to maintain Human Resources practices in line with IFC labor Standards (PS2). The key risks and impacts derive from Tanner's capacity to enlarge the scope of its ESMS in order to identify and manage the potential environmental and social risks associated to sub-projects asset in line with IFC requirements. These risks include but are not restricted to social and environmental issues such as air emissions, waste management, hazardous materials; OHS (occupational health and safety) risks such as process safety, gas releases, chemical hazards and fire and explosions.

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Other1 ESMS enhancement and Staff training Plan		Completed
Other2 ESMS Implementation Report		Completed
Other3 Staff training and capacity enhancement		Completed

Contacts

For Inquiries About the Project, Contact

Antonio Turner
Director Financiero y de Operaciones
Tanner Servicios Financieros SA
Huérfanos 863, 10th Floor
Santiago de Chile
Telephone: +562 2674 7538
mailto:aturner@tanner.cl

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Local Access of Project Documentation

N/A

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.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

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

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

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.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
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Email: cao@worldbankgroup.org
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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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