39287 - Garanti Lease RO2

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Summary of Investment Information

Project Number

39287

Company Name

MOTORACTIVE IFN SA

Date SPI Disclosed

Mar 1, 2017

Country

Romania

Region

Europe

Projected Board Date

Apr 17, 2017

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

May 7, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Apr 26, 2017
Signed : May 12, 2017
Invested : May 17, 2017

Sector

Leasing Services

Project Description

Motoractive IFN S.A. (“Garanti Leasing”, or the “Company”) is the eighth largest leasing company in Romania with an estimated market share of 4.6 percent as at December 2016.

It was established as Motoractive IFN S.A. in 1998 and in 2006 was acquired by GE Money. Turkiye Garanti Bankasi became the largest indirect shareholder of the Company in 2010, and rebranded it to Garanti Leasing Romania in 2011. Garanti Leasing employs 72 fulltime staff in Romania and has eight offices in the country.

The proposed project is a senior loan of up to EUR5.5 million to Garanti Leasing, for on-lending to women-controlled small and medium enterprises (“SMEs”). The proposed investment is consistent with IFC’s strategy in Romania and would help a good existing IFC client to expand its SME reach with focus on women owned businesses, moreover, it would strengthen the relationship with Garanti group.

Associated Advisory Engagement

N.A.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.87
Equity

Development Impact

The main objectives of the project are to (i) help respond to the critical term funding gap for SMEs as Garanti Leasing's customer base is predominantly SME's; (ii) alleviate the difficulty of SMEs in accessing bank financing by using asset-secured lease finance; and, (iii) generate employment through resultant growth of SMEs and investment in productive assets, with a focus on women owned SMEs.

- Longer tenors: IFC's proposed loan with 5 year maturity, would allow the Company meet funding needs of its clients while better managing its maturity mismatches. - Long-term partnership: the project would build up on IFC's existing strong relationship with the Garanti group. - Gender finance: 100% of IFC's funding would be earmarked for women-controlled enterprises in Romania. - Stamp of approval: IFC providing a credit facility to Garanti Leasing will enhance its ability to access funding from other sources and enable the Company to better diversifying its borrowings.

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 involves a senior loan of up to EUR 5.5 million for on-lending to women-controlled small and medium enterprises. The highest exposure in the firm's SME portfolio is to transportation, manufacturing, construction, commerce, and real estate, with 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 classified as FI-2 according to IFC Environmental and Social Review Procedure. For this particular project, IFC's applicable requirements will be to ensure that all eligible projects are screened against the IFC Exclusion List, and the applicable environmental and social national laws and regulations. In addition Garanti Leasing will comply with the requirements of IFC's PS2 on Labor and Working conditions.

The key challenge in this investment will be for Garanti Leasing to manage the E&S risks associated with the activities of its borrowers in line with IFC's policy requirements, including compliance with the IFC's Exclusion List, and Host Country Laws and Regulations. During the existing investment, Garanti Leasing has established an Environmental and Social Management System (ESMS) in line with IFC requirements, applicable to the SME segment, and nominated staff for its implementation. The Firm will be required to regularly provide due diligence and monitoring reports to IFC, and organize ongoing training programs to ensure adequate ESMS implementation. Garanti Leasing is generally in compliance with IFC's PS2 on Labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

Garanti Leasing
Carmen Giosanu
Customer Service and Billing Department Manager
+40 (21) 387 87 00
Carmen.Giosanu@garanti.ro
5 Fabrica de Glucoza Street - Novo Parc 3, Building F - 020331 Bucharest
http://www.garanti.ro/

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Task Title & Description	Anticipated Completion Date
Staff Training	03/20/2017
Provide implementation records in form of due diligence and monitoring reports to IFC	06/29/2017
Implement staff training plan	06/18/2017

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