38352 - BancompartirBond

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Summary of Investment Information

Project Number

38352

Company Name

MIBANCO - BANCO DE LA MICROEMPRESA DE COLOMBIA S.A

Date SPI Disclosed

Sep 2, 2016

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Oct 10, 2016

Environmental Category

FI-3 - No Impact

Status

Hold

Last Updated Date

May 4, 2019

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Oct 24, 2016

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

This Project consists of subscribing senior bonds to Bancompartir (the “Bank”) for up to COP 50,000 million (approximately US$16.5 million), to support the growth of the Bank’s microenterprise loan portfolio. IFC’s financial support and mobilization efforts should send a positive signal to the market, as it would provide medium-to-long term financing through a bond issuance aimed at targeted institutional investors, ultimately deepening financial and capital markets in Colombia.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	17.28
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 the project is expected to be high as IFC''s investment should enhance the Banks''s ability to support productive micro-enterprises which will in turn stimulate growth, employment generation and poverty reduction. Additionally, the Bank should be able to increase its outreach and sustainability by incorporating new entrepreneurs into Colombia''s formal financial sector through lending and savings products.

IFC''s financial support and mobilization should send a positive signal to the market, as it would provide medium-to-long term financing through a bond issuance aimed at targeted institutional investors, ultimately deepening financial and capital markets in Colombia, and creating a track record for this new issuer.

Stamp of approval: IFC''s bond purchase will positively influence the perception of the market during Bank''s first bond issuance. The Project will help the Bank to build a track record as a local issuer to be able to tap local capital markets and ultimately diversify their funding sources.

Financial Risk Mitigation: IFC''s medium-to-long term local currency funding should contribute to the growth of the Bank''s micro-enterprise loan portfolio while allowing the Bank to meet the long-term funding needs associated with asset-liability risk management. The COP-denominated bond should allow Bancompartir to fully mitigate FX risks, considering that the Bank''s loan portfolio is entirely denominated in local currency.

E&S Category Rationale / Risks and Mitigation

This project involves support for the business of microfinance in Colombia and has been classified as Category FI-3 according to the IFC''s Sustainability Framework. The E&S risks of the project are associated to those of the client’s portfolio, which due to the focus on microfinance are considered to be low. The client will be required to: (i) develop, upgrade or maintain an E&S Management System; (ii) demonstrate commitment to meet the labor standards under PS2: Labor and Working Conditions; and (iii) submit a periodic report as per a format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Maria Fernanda Rojas Villareal
Chief Financial Officer, Bancompartir
Phone: + (571) 286 8609 Ext. 223
Address: Calle 16 #6-66 Ed. Avianca, Piso 4, Bogotá Colombia
E-mail: mailto:fernanda.rojas@bancompartir.co
Web: http://www.bancompartir.co

Alvaro Ortiz Morales
Treasury Manager, Bancompartir
Phone: + (571) 286 8609 Ext. 216
Address: Calle 16 #6-66 Ed. Avianca, Piso 4, Bogotá Colombia
E-mail: mailto:alvaro.ortiz@bancompartir.co
Web: http://www.bancompartir.co

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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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