38237 - Baidu MCC Loan

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Summary of Investment Information

Project Number

38237

Company Name

CHONGQING DUXIAOMAN SMALL LOAN CO., LTD.

Date SPI Disclosed

Sep 2, 2016

Country

China

Region

East Asia and the Pacific

Projected Board Date

Oct 4, 2016

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Nov 15, 2016
Signed : Nov 17, 2016
Invested : Dec 9, 2016

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

Chongqing Baidu Micro-Loan Company Ltd (“Baidu CQ MCC” or the “Company”), wholly owned by Baidu Inc., was established in October 2015 and registered in Chongqing. It mainly provides financing to young people to support their vocational education, by using big data-based credit assessment methodology.

The proposed investment will provide mid-term local currency financing to Baidu CQ MCC to help it expand lending business to support young people to access vocational education, and contribute to both access to finance and access to education in China.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	73.82
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

Increase Access to Finance in China: the proposed investment is expected to increase access to finance for vocational education students who lack of long working experience or existing wealth/properties and therefore have limited access to bank loans, and also help them establish credit records.

Promote Big Data-based Credit Assessment Methodology: the proposed investment is also expected to promote the usage of big data based lending methodology, which can help improve the efficiency and coverage of financing.

Increase Access to Education in China: the proposed investment is expected to enable more young people in China, who has vocational education needs but has limited financial capacity to pay tuitions at once, to access quality vocational education.
Improve the Employability and Productivity for Young People: through participating the vocational educations, the students can equip themselves with knowledge and skillset urgently needed for employment or productivity improvement.

Positive Single to the Market: the proposed investment would demonstrate IFC''s continuous support for big data based-credit assessment methodology, strong commitment to innovation, dedication to improve access to finance and access to education in China, and enhance market confidence in the new lending methodology, the vocational education finance market and Baidu CQ MCC.

Midterm Local Currency Financing: IFC will provide mid-term local currency financing to the Company, and will help the Company access to more and diversified funding sources.

Multi-products and Long Term Partnership: in the longer term, IFC could be able to support the Company with multiple investment and financing products, like equity investments and direct purchase/credit enhancement for ABS etc, to address the Company''s needs in different development stage and market environment.

Global Knowledge: IFC could share knowledge and international best practices in different areas of the Company''s operations, such as big data-based credit assessment, internet lending, responsible finance, as well as connect the Company with IFC''s global network of digital finance companies and education institutions.

E&S Category Rationale / Risks and Mitigation

The proposed investment entails a senior loan to an internet-based micro credit company that provides short-term consumer financing to support vocational education, travel and other consumption activities. E&S risks of the company’s business is considered low. The project has therefore been classified as Category FI-3 according to IFC Sustainability Policy. The company is required to ensure that proceeds from IFC loan are not used to support any activities on IFC FI Exclusion List, and to review the operations of borrowers, where they present E&S risks, for compliance with national E&S laws and regulations where they exist and are applicable. The company is also required to follow IFC Performance Standard 2: Labor and Working Conditions for its own HR practices.

Contacts

For Inquiries About the Project, Contact

Ms. Jinhua Yan
Baidu Campus, No.10 Shangdi 10th Street,
Haidian District, Beijing, 100085, China

Tel: +86-10-5992 8423
Fax: +86-10-5992 0041

For Inquiries and Comments About IFC, Contact

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2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

IFC Beijing Office
1501, China World Tower 2
No.1, Jian Guo Men Wai Ave.
Beijing, China

Tel: +86-10-5860 3000
Fax: +86-28-5860 3100

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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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