43584 - BOP Omni Loan

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Summary of Investment Information

Project Number

43584

Company Name

Omni S.A Credito Financiamento e Investimento

Date SPI Disclosed

Aug 27, 2021

Country

Brazil

Region

Latin America and the Caribbean

Projected Board Date

Sep 27, 2021

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Mar 1, 2025

Department

Regional Industry - FIG LAC

Industry

Financial Markets

Previous Events

Approved : Sep 29, 2021
Signed : Dec 15, 2021
Invested : Dec 24, 2021

Sector

Commercial Banking - Microfinance

Project Description

The proposed project consists of a financing package of up to US$40 million to the Omni Financial Conglomerate (“Omni”) through Omni S.A. – Crédito, Financiamento e Investimento (“Omni CFI”), Omni’s leading financial company. The financing package is comprised by: (i) an A-loan of up to US$25 million in BRL equivalent; and (ii) a B-loan of up to US$15 million. The Project entails a potential Advisory Services component to strengthen Omni’s risk management to ensure sustainable growth of its microfinance business model. The project will be part of the BOP program.

The purpose of the proposed investment is to support Omni’s microfinance portfolio focused on: (i) microenterprises in the transport segment (low-income truck drivers); (ii) microenterprises in Frontier Regions; and (iii) low-income immigrants and refugees in Brazil, in line with IFC’s strategic pillar in Brazil to close the microfinance gap to foster employment and economic growth (the “Project”).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
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 MSME (mix of Micro and SME)

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

Development Impact

The most significant expected project-level outcome for the project is access to finance for microenterprises including migrants and refugees to support economic activity and resilience in the aftermath of the COVID-19 crisis. Beyond the project outcome, IFC anticipates that the Project will support resilience amongst microfinance and BOP finance providers catalyzing investments in the sector by demonstrating the viability of lending to BoP providers and crowding in other sources of international and domestic finance in support of these lenders.

The Project will support Omni with a 3-year term local currency financing, not readily available in the market, which has become even more scarce during the COVID-19 crisis, as Omni's overall ability to attract wholesale borrowings is decreased due to the subdued appetite of lending institutions during the crisis. IFC's active and direct role in mobilizing financing that will double IFC's financing amount provides strong added value in this context. Moreover, Omni will strengthen its risk management practices particularly for the microlending operations.

E&S Category Rationale / Risks and Mitigation

The Project consists of an up to US$40 million investment in Omni to support its vehicle loan portfolio (targeting low-income truck drivers) and microfinance (loan size < US$10.000) and has been classified as Category FI-3 according to the IFC's Sustainability Framework. Portfolio risks include exposures to microentrepreneurs and individuals with overall low E&S risks. The Project will not support coal-related activities. The E&S risks and impacts related to the Project derive both from Omni's capacity to manage microfinance lending E&S risks as well as to maintain existing practices with regard to labor and working conditions. Due to the nature of the Project focused on auto loans portfolio for low-income truckers, the E&S risks are considered to be low. As part of the Project, the client will be required to enhance its credit review procedures to screen the supported portfolio against the IFC MFI Exclusion List and Brazilian applicable national E&S laws. Omni will also be required to continue to demonstrate commitment to meet the labor standards under PS2 and to inform the IFC if there are any changes in the scope of its operations that affect the E&S risk of the supported portfolio.

Given the E&S risk nature of this project, development of a robust ESMS was not needed.

Contacts

For Inquiries About the Project, Contact

Omni S.A. – Crédito, Financiamento e Investimento
Georges Saleh
Funding and Investor Relations
+55 11 982243699
georges.saleh@omni.com.br
Av. São Gabriel, 555 – 1 andar, Jardim Paulista, São Paulo - SP
https://omni.com.br/

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