38918 - CMF CL

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Summary of Investment Information

Project Number

38918

Company Name

BANCO CMF S.A.

Date SPI Disclosed

Jan 18, 2017

Country

Argentina

Region

Latin America and the Caribbean

Projected Board Date

Feb 20, 2017

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 : Feb 23, 2017
Signed : Mar 16, 2018
Invested : Mar 20, 2017

Sector

Commercial Banking - General

Project Description

The proposed project (the “Project”) consists of an up to US$40 million facility to Banco CMF S.A. (the “Bank” or “CMF”), to be structured in up to three subsequent commitments: (i) one commitment for up to US$10 million (“Loan #1”) with a 12-month bullet repayment, to be committed within 2 months of IFC Board Approval; (ii) another commitment for up to US$15 million (“Loan #2”) with an 18-month bullet repayment, to be committed within 16 months of IFC Board Approval, only after full repayment of Loan #1; and (iii) a final commitment for up to US$15 million (“Loan #3”) with an 18-month bullet repayment, to be committed within 36 months of IFC Board Approval, only after full repayment of Loan #2.

CMF is a wholesale bank in Argentina focused on providing high value services to small and medium enterprise (“SME”) clients. In line with its personalized offering and its niche commercial strategy, as of September 2016, the Bank ranked 33^rd in terms of deposits, with a market share of 0.31%, and 32^nd in terms of loans, with a market share of 0.34%.

Associated Advisory Engagement

N/A

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	40.0
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 SME Borrowers

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

Development Impact

By funding a well-run and profitable private sector niche bank, the Project will support increased banking penetration and access to financial services for small and medium sized business in Argentina, where the credit to gross domestic product ("GDP") ratio is below the regional average for Latin America and lower than its peers (including Brazil). In addition, improving access to finance for SMEs will contribute to increase job creation in the country.

The Project will: (i) enable CMF to extend the tenor of its financing offer by providing longer term funding than normally available in the market and, in consequence, help the Bank to gradually shift from being a transactional bank with shorter-term products, to providing longer term funding to SMEs; and (ii) contribute to diversify CMF's funding base, which is mostly reliant on deposits.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The project consists of a debt facility for up to US$40 million to Banco CMF to on lend to Argentine SMEs and has been classified as Category FI-2 according to the IFC's Sustainability Framework. The E&S risks of the project are associated with those of the client’s SME portfolio, which are expected to have medium to low E&S risks. As part of this project CMF will be required to screen its sub-projects against the IFC exclusion list and Argentinian E&S laws and regulations.

The key risks and impacts derive from CMF’s capacity to identify and manage the potential E&S risks associated to sub-projects asset class, in particular manufacturing activities, in line with IFC requirements. CMF has a board approved E&S Management System (ESMS) since March 2013 structured in procedures to screen against restricted activities and a risk-based approach categorization performed through a self-declaratory E&S questionnaire answered by potential clients during credit analysis. As part of this project the client will enhance its ESMS to improve E&S risk identification and conduct additional staff training. The client will also be required to enhance its HR practices in line with IFC labor standards (PS2).

Contacts

For Inquiries About the Project, Contact

Banco CMF S.A.
Patricio Ovalle
Financial Institutions Manager
+54 (11) 4318-6858 / 6800

Macacha Güemes 150, Buenos Aires, Argentina

For Inquiries and Comments About IFC, Contact

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

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.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date
ESMS enhancement	03/20/2017
Implement an internal Grievance Mechanism	09/02/2017

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