42735 - SG Ghana SME SL

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Summary of Investment Information

Project Number

42735

Company Name

SOCIETE GENERALE GHANA LTD

Date SPI Disclosed

Dec 17, 2019

Country

Ghana

Region

Africa

Projected Board Date

Jan 20, 2020

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jun 26, 2021

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Feb 3, 2020
Signed : Jun 26, 2020
Invested : Jun 24, 2021

Sector

Commercial Banking - SME Finance

Project Description

The proposed project entails the provision of a US$50 million senior loan to Societe Generale Ghana (“SG Ghana” or the “Bank”) to support the Bank’s lending to Small and Medium Enterprises (“SMEs”) in Ghana.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
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

i. Financial Additionality - Financing structure: Longer-term financing to financial institutions for targeted on-lending to SMEs is scarce in Ghana due to the perceived risk associated with the SME segment. The provision of a US$50 million senior loan with a tenor of 5 years will support the growth of SG Ghana's SME portfolio by enabling longer-term funding to SMEs. ii. Non-Financial Additionality - Knowledge, Innovation and Capacity Building: IFC will provide complimentary advisory services to support the development of SG Ghana's SME strategy. This would enable the Bank to benefit from IFC's expertise in SME banking.

E&S Category Rationale / Risks and Mitigation

The project has been categorized as FI-2 in accordance with IFC’s Environmental and social Review Procedures. The project consists of a facility to Société Générale Ghana (SG Ghana) to support the growth of its SME portfolio. SG Ghana’s portfolio consists of mostly medium risk sectors such as retail, business services, agriculture, food and beverage and manufacturing. The environmental and social risks and impacts associated with the activities of SMEs are considered limited and can be managed through mitigation measures. The overall portfolio risk for this project is therefore considered medium. The identified applicable requirements for this project are the IFC Exclusion List and the applicable national environmental and social laws in Ghana. Given the proposed use of proceeds and the sectors covered by the bank, this 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, transactions involving coal mining, coal-related activities and upstream oil and gas activities will be excluded from the project portfolio.

The main E&S risks of this project relate to the ability of Société General Ghana to properly identify and manage the E&S risks and impacts associated with its lending activities particularly to the SME sector in line with Performance Standard 1. In addition, risks associated with the Bank’s practices regarding labor and working conditions need to be assessed in line with the requirements of Performance Standard 2. The bank has an established E&S management system (ESMS) with a dedicated E&S team and adequate ESMS procedures for the review of relevant risk. The Bank will need to amend the system to ensure that all transactions in the SME asset class are appropriately reviewed and identified E&S issues are assigned appropriate action plans. In line with this change, capacity building activities will be required to address the alignment of the E&S risk management process with the overall SME credit review process. The bank will ensure adequate E&S risk management training is provided to the E&S team. In relation to IFC Performance Standard 2, the bank’s labor standards meet the requirements of this Performance Standard.

Contacts

For Inquiries About the Project, Contact

Societe Generale Ghana
Mr. Mohamed Fehri
Chief Finance and Administration Officer

mohamed.fehri@socgen.com
P.O. Box 13119 Accra, Ghana
Societegenerale.com

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Telephone: 202-473-3800
Fax: 202-974-4384

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.

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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.

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Task Title & Description	Anticipated Completion Date
Staff Training	03/31/2020
ESMS revision	04/30/2020

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