38028 - CFPA Equity II

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Summary of Investment Information

Project Number

38028

Company Name

CHONGHO BRIDGE GROUP LIMITED

Date SPI Disclosed

Mar 28, 2016

Country

China

Region

East Asia and the Pacific

Projected Board Date

May 2, 2016

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Mar 24, 2017
Signed : Oct 28, 2016
Invested : Feb 14, 2017

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed project entails IFC’s additional equity investment of up to RMB160 million (US$25 million equivalent) in CFPA Microfinance Management Co., Ltd. (“CFPA MF”, the “Company”).

CFPA MF is a leading microfinance company dedicated to rural finance. IFC is an existing shareholder of the Company and also provided a RMB equivalent US$20 million five year senior loan to CFPA MF. Successfully transformed from a poverty alleviation project, the Company has experienced substantial growth with geographic expansion to 166 counties in 17 provinces, and with deep outreach to 306,101 active customers. By 2015, the outstanding portfolio of CFPA MF reached RMB2.6 billion (US$400 million), representing a five year CAGR of 46.3%. Given its proven track record and demonstrated development impact, IFC would like to continue to support the Company for future expansion.

Associated Advisory Engagement

N/A

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	25.0

Development Impact

1. Promoting financial inclusion: IFC''s investment will strengthen the capital of CFPA MF, enable it to leverage more resources and funding to support the geographic and portfolio expansion of the Company.
2. Creating opportunities for disadvantaged groups: As 97% of CFPA MF''s customers are rural households with at most a middle school education, and over 90% of them are women, IFC''s investment in CFPA MF promote financial inclusion for disadvantaged groups who are underserved and not covered by traditional financial institutions.

1. Long term partnership: During last five years'' support to CFPA MF, IFC has made visible contribution to the Company through nominated director and advisory services. CFPA MF also values IFC as a shareholder and long term partner.
2. Global Expertise: IFC will continue bringing global microfinance knowledge to the Company through nominated director and facilitating experience exchange with MFIs in other markets.
3. Stamp of Approval: IFC''s participation as a shareholder brings credibility to stakeholders, especially to foereign investors, who have shown strong interests to CFPA MF, while remain cautious given the fragmented market of microfinance sector in China.

E&S Category Rationale / Risks and Mitigation

The project entails IFC’s additional equity investment of up to RMB 160 million (approximate $25 million equivalent) to CFPA MF, a micro finance company in China. The project will expose to micro or small scaled business activities in mostly agribusiness, manufacturing, transportation, wholesale and retail and services sectors which are expected to be low of E&S risk. The project is therefore categorized as FI-3 in accordance with the IFC Sustainability Policy. Being an existing IFC client, CPFA MF has developed an ESMS and in a progress of ESMS implementation. Under this project, CFPA MF will be required to ensure ESMS implementation at full scale to ensure financed activities to comply with IFC Exclusion List and applicable Chinese E&S laws and regulations. CFPA MF is found broadly in line with IFC Performance Standard 2 for its own labor practices and management and will be required to enhance fire safety management in accordance with IFC requirement.

Contacts

For Inquiries About the Project, Contact

Mr. Dongwen Liu
Chief Executive Officer
CFPA Microfinance Management Co., Ltd.
1st Floor, South Building, 36 Shuangyushu Xili, Haidian District, Beijing, China
+86-10-82872688
Email: mailto:liudongwen@cfpamf.org.cn

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