The project is part of IFC’s Small Loan Guarantee Program (“SLGP” or “Program”) which provides risk sharing instrument to client banks looking to expand SME lending in underserved markets. SLGP is supported by the IDA18 IFC-MIGA Private Sector Window Blended Finance Facility (IDA PSW-BFF), which was created by the Word Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict-affected states. The IDA PSW BFF support would enable IFC to rapidly roll out a program of risk sharing facilities to reach segments facing serious market failures in IDA countries and provide access to finance to such underserved targeted market segments which IFC could not otherwise serve due to the associated high risk. The concessional support from IDA PSW, will, therefore, enable SIB to expand lending to SMEs including small agribusinesses in Cote d’Ivoire with inadequate or no collateral or weak cash flow but with potential to grow their business initiatives.

The level of concessionality (i.e., “subsidy”) to be provided by IDA PSW-BFF is estimated to be 4-9% of the total portfolio of US$800 million for the SLGP. This project benefits from the IDA PSW BFF support and the concessionality embedded in the Program. This estimate is based on the present value of the difference between (i) a “reference price” (either a market price if available; the price calculated using IFC’s pricing model, which comprises three main elements: risk, cost and profit; or a negotiated price) and (ii) the “concessional price” being charged under the Program.

The Project is also supported by Global SME Finance Facility (“GSMEF”) in the form of a performance rebate of up to 1.75% of the total project cost of US$38 million equivalent to incentivize on-lending to women owned/led enterprises, climate-smart enterprises, and very small enterprises (VSEs).  The estimated subsidy provided by GSMEF assumes that the Project will fully reach the agreed impact and shall only be paid out upon achievement of the pre-defined targets. GSMEF’s support would enable IFC to reach more targeted subsegments that may otherwise not be served without its support. GSMEF is a partnership between IFC and other multilateral and bilateral partners, including United Kingdom acting through the Foreign, Commonwealth & Development Office (FCDO), formerly the United Kingdom's Department for International Development (“DFID”) and the Netherlands Ministry of Foreign Affairs, to enhance SME access to finance globally on a sustainable basis.

Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for Development Finance Institution (“DFI”) Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance. The SLGP is a platform approach that can be accessed by other financial institutions in Cote d’Ivoire and other IDA PSW markets.