40028 - GFO Loan II

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Summary of Investment Information

Project Number

40028

Company Name

GRUPO FACTORING DE OCCIDENTE S A S

Date SPI Disclosed

Oct 20, 2017

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Nov 21, 2017

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 12, 2017
Signed : Dec 28, 2017
Invested : Mar 5, 2018

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The project consists of a proposed IFC investment to support the growth of Grupo Factoring de Occidente’s (“GFO” or the “Company”) factoring portfolio (the “Project”) to small and medium enterprises (“SMEs”) in Colombia. The Project will enable IFC to re-engage with a non-banking financial institution with a proven business model for delivering liquidity solutions to SMEs and mobilize additional funding to diversify their funding sources. The investment will also support the growth of the factoring market in Colombia, which is currently at an early stage.

Created in 1995, GFO is one of the first factoring companies established in Colombia and has positioned itself as a market leader, differentiating itself from other factoring companies through service and agility.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
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

Through this project, IFC will support an innovative Colombian non-banking factoring company to increase its reach by becoming an alternative funding source to more SMEs while broadening the implementation of its proprietary e-factoring invoicing platform for the sector at large.

The proposed financing could help make financing available for the discount of over 160,000 SMEs' invoices each year. Additionally, by increasing the size of GFO's operations, the Project will support employment generation within the Company. The Project will also contribute to the development and competitiveness improvement of the factoring industry in Colombia, by helping to promote the development of innovative funding products for SMEs and boosting the growth of a non-banking market leader.

Long-term diversified funding: IFC's investment and mobilization efforts will enable the Company to diversify its funding base with long term borrowings, which are currently unavailable.

Long-term Partnership: the investment will enable IFC to continue developing the relationship with GFO and with Kandeo, which is committed to foster access to finance in Mexico, Peru and Colombia for microenterprises, SMEs and the base of the pyramid.

IFC’s stamp of approval: as a respected investor in the marketplace, IFC will help GFO in its fund-raising efforts from other FIs, enabling their continuous growth and support to SMEs in Colombia.

E&S Category Rationale / Risks and Mitigation

This project consists of a senior loan investment to GFO, an existing IFC client. The project has been classified as a Category FI-3 project according to IFC's Sustainability Framework as the project involves a loan to support the company's factoring operations of small and medium companies in Colombia which has low E&S risks. The client screens its lending activities against IFC Exclusion List and ensures that companies comply with local regulations. GFO's E&S risk management procedures are considered adequate for the level of risk. As part of this project, the client will be required to continue submit annual E&S performance reports as per a format provided by IFC.

Contacts

For Inquiries About the Project, Contact

Grupo Factoring de Occidente
Ms. Johanna Montes de Oca
Finance Director
+(571) 621 8080 ext 214
jmontesdeoca@gfo.com.co
Cl. 93b #12-30 Of 203, Bogota, Colombia
www.gfo.com.co

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Fax: 202-974-4384

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