38239 - HKL AB Loan

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Summary of Investment Information

Project Number

38239

Company Name

HATTHA BANK PLC.

Date SPI Disclosed

Apr 8, 2016

Country

Cambodia

Region

East Asia and the Pacific

Projected Board Date

May 10, 2016

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Dec 15, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : May 19, 2016
Signed : May 27, 2016
Invested : Sep 6, 2016

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed project (the “Project”) aims to provide a senior debt package to Hattha Kaksekar Limited (“HKL” or “Company”) in order to support its further growth in the market, especially its lending to micro borrowers.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
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 Microfinance Borrowers

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

Development Impact

The development impact of IFC''s investment in the Project is expected to be high given that it will:
- Improve access to finance for productive micro-entrepreneurs, which will in turn stimulate growth, employment generation and poverty reduction.
- As the Company is present in many remote areas in the country, the Project is expected to allow more individuals obtain formal financial services, such as the mobilization of savings and mobile banking.

Long Term Funding: IFC will provide long term funding, which is limited in the market.
Resource Mobilization: The Project involves the mobilization of a significant amount of resources from third parties. IFC''s participation will strengthen the success of this transaction.
Stamp of Approval: The Project will help the Company establish relationships with international banks and obtain investors'' validation of the Company''s business model.

E&S Category Rationale / Risks and Mitigation

The transaction involves an IFC syndicated loan to HKL, a Cambodian microfinance, to support its growth and development and has been classified as an FI-3 project according to IFC’s Environmental and Social Sustainability Policy. Its borrowers are individuals and households involved in agriculture, trade and commerce, service or other microbusiness activities. Its overall portfolio E&S risk is considered low. The company is implementing a simple environmental and social management system (ESMS) to screen loan applications against an Exclusion List which is consistent with IFC’s and to assess minor E&S risks following good industry practices. The company’s HR practice has been found in line with the requirements of the IFC Performance Standard 2: Labor and Working Conditions. For this new proposed investment, the company will be required to maintain proper capacity and continue to implement the ESMS to ensure its lending activities to meet the requirements of IFC Exclusion List and the applicable national Cambodian E&S laws and regulations.

Contacts

For Inquiries About the Project, Contact

Mr. HOUT IENGTONG
President & Chief Executive Officer
HATTHA KAKSEKAR LIMITED (HKL), HEAD OFFICE
606, Street 271, Sangkat Phsar Doeum Thkov
Khan Chamkamorn, Phnom Penh, Cambodia
PO Box 2044, Phnom Penh 3
+ T :( 855) 23 994 304, 23 224 102,
+ E :mailto:iengtong.h@hkl.com.kh
+ W :http://www.hkl.com.kh

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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.

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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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