41672 - SLGP RSF TEB

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Summary of Investment Information

Project Number

41672

Company Name

TEB Sh.A.

Date SPI Disclosed

Feb 21, 2020

Country

Kosovo

Region

Europe

Projected Board Date

Mar 23, 2020

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jun 2, 2021

Department

Regional Industry - FIG - ECA

Industry

Financial Markets

Previous Events

Approved : Apr 12, 2018

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The project consists of a risk sharing facility for a portfolio of up to EUR20 million (to be committed in two tranches of up to EUR10 million each) with TEB Sh.A. under IFC’s Small Loans Guarantee Program (“SLGP”) which is supported by the IDA18 IFC-MIGA Private Sector Window’s Blended Finance Facility (“IDA PSW-BFF”) to de-risk and scale up lending to SMEs, in this case with a focus on underserved very small enterprises (“VSEs”), women-owned SMEs (WSMEs) and agri-SMEs in Kosovo (the “Project”). IFC’s exposure for both tranches will be up to EUR10 million, or 50% of the risk sharing facility. IDA PSW-BFF was created by the Word Bank Group to catalyse private sector investment in IDA countries, with a focus on fragile and conflict-affected states. The Project will also be potentially supported by the Women Entrepreneurs Finance Initiative (“We-Fi”) should TEB Sh.A. achieves significant growth in lending to women-owned SMEs. We-Fi is a collaborative partnership among 14 governments, six multilateral development banks (MDBs), and other public and private sector stakeholders, hosted by the World Bank Group. It seeks to address financial and non-financial constraints faced by women-owned small and medium enterprises in developing countries. IDA PSW-BFF and We-Fi support would enable to the Project to reach segments facing serious market failures which IFC could not otherwise serve.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	11.21
Loan
Equity

Development Impact

The project is expected to have a strong development impact as follows: (i) Scaling up small loan financing to SMEs, including underserved segments such as women entrepreneurs and farmers in Kosovo, which in turn supports job creation; (ii) With the risk sharing facility, encouraging alternative financing structures and promote cash flow-based lending in a market dominated by collateral-based lending; and (iii) Promoting growth in agribusiness, a key economic sector: Approximately 60% of the country's poor live in rural areas and depend on the agricultural sector for their livelihoods. In this context, the project will reach the base of the pyramid by directly supporting the most vulnerable segments of the population.

(i) Provide risk mitigation to TEB Sh.A. helping it to offer better financing terms to SMEs, particularly to the most difficult-to-reach segments such as VSEs and SMEs in agribusiness. (ii) Support enhancement of the capacity of TEB Sh.A. to lend effectively and sustainably to the SME segment. (iii) Transform the market through demonstration effect to encourage financial institutions to scale up lending to VSEs and SMEs.

E&S Category Rationale / Risks and Mitigation

The proposed project consists of a risk sharing facility to support TEB Sh.A. lending to SMEs in Kosovo. Loan portfolio of TEB Sh.A., including the portfolio in the risk sharing facility, will largely be comprised of business activities that have limited adverse environmental and social risks and impacts that are few in number, site specific, largely reversible and can be readily addressed through mitigation measures. This project is classified as Category FI-2 project according to IFC’s Environmental and Social Policy.

TEB Sh. A. is an existing IFC client and showed commitment towards the fulfillment of environmental and social (“E&S”) requirements set in the subordinated loan agreement with the client. The bank has developed an environmental and social management system (“ESMS”), appointed an E&S officer, and provided E&S training to its loan officers and new staff. The main E&S issues of this investment relate to commitment of TEB Sh.A. to implement the ESMS to ensure activities supported by IFC financing are in compliance with applicable requirements i.e. screening financing activities against the IFC Exclusion List, and compliance with relevant environmental and social laws. In addition, TEB Sh.A. shall demonstrate commitment to the application of labor standards established under IFC Performance Standard 2 (PS2).

Contacts

For Inquiries About the Project, Contact

TEB Sh.A.
Dren Krypa
Deputy Managing Director
+383 (0) 38 230 123
dren.krypa@teb-kos.com
Preoc n.n., 7KM main road Prishtina - Ferizaj Graçanica 10500, Republic of Kosovo
http://www.teb-kos.com

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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:

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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
Staff Training	04/15/2020
Provide ESMS Implementation Records	09/27/2020
Provide E&S Training for Staff	06/29/2020

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