42556 - DARP SPV CCM

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Summary of Investment Information

Project Number

42556

Company Name

COLLECTIUS 2 AG

Date SPI Disclosed

Mar 11, 2020

Country

East Asia and Pacific Region

Region

East Asia and the Pacific

Projected Board Date

Apr 20, 2020

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : May 4, 2020
Signed : Jun 26, 2020
Invested : Nov 12, 2020

Sector

Distressed Assets SPV

Project Description

The project is part of IFC’s Distressed Asset Recovery Program (“DARP”) and proposes an investment of up to US$30 million through a combination of senior and junior loans to a DARP platform (“DARP SPV CCM”) being set up by Collectius AG (“Collectius” or the “Company”). Collectius will also provide similar US$30 million funding to the SPV. The proceeds will be used to acquire and resolve unsecured retail non-performing loans (“NPLs”) in Indonesia, Malaysia, the Philippines, Thailand and Vietnam (“Target Markets”), allowing Collectius to expand in these markets. Additionally, IFC is also evaluating a minority equity investment in Collectius to bolster a strong partnership aimed at building unsecured retail NPL resolution capacity across Asia.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity	8.50

Development Impact

The expected project-level outcomes are the offloading of NPLs by banks and normalization of the financial position of defaulted debtors who are currently unable to access formal credit. The sale of NPL portfolios will help banks meet their NPL reduction targets and reduce associated funding and administrative costs, and thereby improving their profitability and capital position over time, which in turn may strengthen their capacity to lend. Beyond the Project, IFC anticipates that the investment, via demonstration and replication channels, will increase market competitiveness and integration and likely to have a catalytic effect in the unsecured retail NPL space in the region's distressed asset market. In terms of competitiveness, the Project is expected to contribute toward the entry of new servicers specialized in unsecured retail NPLs into Southeast Asia and the market-wide adoption of best practices by servicers active in resolving unsecured retail NPLs. The Project will contribute toward market integration by triggering the mobilization of foreign capital into Southeast Asian NPL markets as the platform will serve as a model for other investors to replicate as they consider investing in the region.

E&S Category Rationale / Risks and Mitigation

The project involves creating a co-investment platform with Collectius to acquire and resolve unsecured retail non-performing loans (“NPLs”) in Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Additionally, IFC will also provide a minority equity investment in Collectius. Collectius is involved exclusively in purchase and service of retail NPLs in Asia. Given the nature of the target portfolio, the project is expected to have low E&S risks and therefore, it has been categorized as FI-3 in accordance with IFC’s Environmental and Social Sustainability Policy. Collectius internal labor practices are in accordance with the IFC Performance Standard 2: Labor and Working Conditions (PS2) and the client will be required to ensure ongoing compliance with PS 2 requirements.

Contacts

For Inquiries About the Project, Contact

Collectius AG
Gustav A. Eriksson
Group CEO
(+65) 9833 7304
gustav@collectius.com
1 Changi Business Park Crescent, #02-16 plaza 8@CBP, Singapore 486025
www.collectius.com

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