42304 - SLGP RSF NSIA

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Summary of Investment Information

Project Number

42304

Company Name

NSIA Banque SME RSF

Date SPI Disclosed

May 6, 2019

Country

Western Africa Region

Region

Africa

Projected Board Date

Jun 14, 2019

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Jul 4, 2019

Department

Regional Industry - FIG ME & Africa

Industry

Financial Markets

Previous Events

Approved : Jun 25, 2019
Signed : Jun 28, 2019

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The proposed project entails the provision of a Risk Sharing Facility (“RSF” or the “Facility”) for a consideration of up to EUR 23 million to 3 NSIA Banque subsidiaries operating in five countries – Côte d’Ivoire, Benin, Togo, Senegal and Guinea. The RSF will provide 50% credit risk coverage on a maximum SME loan portfolio of EUR 46 million

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	11.40
Loan
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
Guarantee	Loans to SME Borrowers
Guarantee	Loans to Woman-Owned SMEs
Guarantee	Loans to VSEs

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

Development Impact

The most significant, expected Project-level outcome is an increase in the availability and affordability of lending to SMEs, including to Women-owned SMEs (WSMEs), small/very-small enterprises (VSE/SE) and SMEs making climate related investments. IFC also anticipates that the Project has the potential to promote greater market inclusiveness through demonstration of the commercial viability of lending to underserved SME segments such as WSME and VSE/SE.

i. Financial structure and instrument: IFC is uniquely positioned to structure a multi-country RSF for NSIA in challenging markets given its (i) solid track record of structuring regional multi-country projects in IDA/FCS countries, which is cost-effective for the group, and (ii) capacity and on the ground resources to deliver such project. The IFC AAA risk mitigation facility requires no economic capital for the portfolio covered. It therefore improves the risk adjusted return on capital for the participating banks. ii. Knowledge, innovation and capacity building (delivering an integrated IS/AS offering): Very few institutions can deliver an integrated IS/AS solution across the banking division of the NSIA group like IFC. Along with the proposed investment, the NSIA group will benefit from IFC's global expertise in SME banking, including in financing WSMES and climate related assets. IFC has effectively delivered such integrated solutions to large regional banking groups. iii. Standard setting (E&S): With support from IFC's E&S specialists, NSIA will put in place an E&S risk management system embedded in the group's credit underwriting policies and procedures.

E&S Category Rationale / Risks and Mitigation

The project has been categorized as FI-2, in accordance to IFC's Environmental and Social Sustainability Policy. The proposed investment consists of a risk sharing facility of up to €23 million with 3 subsidiaries of NSIA, namely Cote d'Ivoire, Benin and Guinea on a portfolio of eligible Small and Medium Enterprises (SMEs) loans. NSIA's current SME portfolios entails exposures to a variety of sectors such as trade, services, construction, transportation and real estate. The overall portfolio risks include a limited number of business activities that have 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. For this project, each participating subsidiary of NSIA will be required to screen the eligible loans against the IFC Exclusion List and ensure compliance with the environmental and social laws and regulations of their respective country. Additionally, certain activities where the E&S risks are difficult to manage due to contextual risks will be excluded from the facility. Given the nature of the risk-sharing facility (RSF), the project is not expected to support higher-risk transactions that may include: (a) involuntary resettlement; (b) potential adverse impacts on Indigenous Peoples; (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage; or (d) significant occupational health and safety risks. In addition, investments involving coal mining, coal-related activities and upstream oil and gas activities will be excluded from the RSF's portfolio

The key E&S risks and impacts derive from the capacity of NSIA's participating subsidiaries to identify and manage the potential environmental and social risks associated with its lending activities to the SME sector: pollution, noise, water and energy conservation, waste management, occupational health and safety, community health and safety. Additional E&S risks and impacts of the project derive from the capacity and systems that are in place to manage these risks and the Bank's practices with regards to labor and working conditions. None of the three NSIA's subsidiaries have currently an Environmental and Social Management System (ESMS) in place or staff responsible for managing the E&S impacts of the lending activities. An E&S policy is however being developed at the group level while certain E&S aspects of lending procedures have been already included in the credit policy approved in March 2019 (e.g. excluded activities, environmental impact in particular in high risk projects, impact of communities, promoting energy efficiency projects). As part of this project, the NSIA participating subsidiaries will be required to develop an ESMS to ensure all eligible loans supported under the risk sharing facility comply with the applicable environmental and social requirements, provide E&S risk management training to bank officers implicated in the ESMS and assign E&S staff responsible for the overall E&S framework implementation. The NSIA subsidiaries' human resources policies and procedures are generally in line with IFC Performance Standard 2 on Labor and Working Condition.

Contacts

For Inquiries About the Project, Contact

NSIA Group
Leonce Yace
Managing Director

leonce.yace@groupensia.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:

Online form: available at https://www.cao-ombudsman.org/
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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
Nominate officers	10/02/2019
Establish SEMS	10/02/2019
Formalize procedures	10/02/2019
Staff Training	10/02/2019

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