38847 - BMM Bond

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Summary of Investment Information

Project Number

38847

Company Name

BANCO MUNDO MUJER SA

Date SPI Disclosed

Nov 30, 2016

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Jan 20, 2017

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Sep 25, 2022

Department

Regional Industry - FIG LAC

Industry

Financial Markets

Previous Events

Approved : Mar 24, 2017
Signed : May 30, 2017
Invested : Jul 12, 2017

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed project consists of subscribing senior bonds to Banco Mundo Mujer (“BMM” or the “Bank”) for up to COP 80,000 million (approximately US$25.8 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 (the “Country”).

Associated Advisory Engagement

N/A

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	27.66
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 will enhance BMM's ability to support productive micro-enterprises which will in turn stimulate growth, employment generation and poverty reduction. Additionally, the Bank will be able to increase its outreach and sustainability by incorporating new entrepreneurs into Colombia's formal financial sector.

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.

By subscribing the bond issuance, IFC would strengthen the relationship with Fundacion Mundo Mujer that stared in 2006.

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.

Diversification of funding sources and capital markets development: The project should help diversify the funding sources in terms of tenor and should support the Bank's expansion plans, particularly in rural regions of the Country. Additionally, by subscribing to the bonds, IFC will also support the development and deepening of Colombia's debt capital markets with BMM's first ever bond issue.

Local currency funding: IFC's medium-to-long term local currency funding should contribute to the growth of the Bank's micro-enterprise loan portfolio. The COP-denominated bond mitigates any FX risks, considering that BMM's loan portfolio is entirely denominated in local currency.

E&S Category Rationale / Risks and Mitigation

The proposed investment will support BMM micro finance activities 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 micro finance are considered to be low. The client will be required to: (i) develop and maintain an E&S Management System; (ii) demonstrate commitment to meet the labor standards under PS2; and (iii) submit a periodic report as per a format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Mr. Giovanni García Montero
Banco Mundo Mujer
Gerente de Control Financiero y Administrativo
Popayan. Colombia
Telephone: +(572) 839 99 00
mailto:Giovanni.garcia@bmm.com.co

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