38805 - Bandelta Sr. Loan II

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Summary of Investment Information

Project Number

38805

Company Name

Banco Delta S.A.

Date SPI Disclosed

Nov 22, 2016

Country

Panama

Region

Latin America and the Caribbean

Projected Board Date

Dec 20, 2016

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Jan 18, 2017
Signed : May 8, 2017
Invested : May 26, 2017

Sector

Commercial Banking - Microfinance

Project Description

The project consists of a proposed loan of up to US$10 million to Banco Delta S.A. (the “Bank” or “Bandelta”). The loan will be used to finance the growth of the microfinance and small enterprise portfolio of the Bank.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
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

IFC''s loan will help increase financing available to micro and small companies in Panama and stimulate the growth of these businesses. This will contribute to the creation of new jobs in the micro and small sector, which typicall provide the majority of employment opportunities in developing countries.
Through this loan, IFC will support the transition of micro and small enterprises to the formal sector, as the ability to access credit is one of the main incentives to become formal.

IFC''s role in the project is to provide medium term funding to support the leading microfinance bank in Panama. IFC will help the Bank continue expanding its reach to the underserved micro and small clients in the country. This will enable IFC to strengthen its relationship with the bank and help improve microfinance penetration in Panama.

In terms of additionality, IFC''s loan will help diversity the bank''s funding base and provide a medium term tenor. IFC will support the growth of the bank''s portfolio by providing funding and sharing best practices from other players in the region. IFC will also continue to support the bank in enhancing its environmental and social management system.

E&S Category Rationale / Risks and Mitigation

The proposed investment consists of a US$10 million loan to be used to fund the growth of Bandelta's micro finance and small enterprise portfolio (SME's). Bandelta's portfolio is mainly composed of retail (57%), microloans (31%) and SME loans (12%). The overall portfolio risks includes a limited number of business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site specific, largely reversible, and readily addressed through mitigation measures. The project has been categorized as FI-2 in accordance with IFC's Sustainability Policy. For this project, Bandelta will be required to screen the loans against the IFC Exclusion List and the Panamanian environmental and social laws and regulations.

The key E&S risks and impacts derive from Bandelta's capacity to identify and manage the potential environmental and social risks associated with its lending activities to SME's in the manufacturing and agribusiness sectors. Additional E&S risks and impacts of the Project derive from the capacity and systems in place to manage these risks, and the Bank's practices with regards to labor and working conditions. Bandelta's environmental and social procedures have been integrated as part of the their Credit Manual, procedures include assessing clients against host country laws, screening against the Exclusion List and applying a risk screen. As part of this investment, the Bank will be required to train its credit officers in identifying environmental and social risks. In addition, Bandelta will be required to continue its commitment to applying the labor standards.

Contacts

For Inquiries About the Project, Contact

Juan Lavergne
Vicepresidente de Finanzas y Tesorería
Banco Delta, S.A.
Tel. (507) 340-0083
Fax. (507) 340-0019

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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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Task Title & Description	Anticipated Completion Date
Staff Training	05/31/2017

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