44105 - WCS COVID ProCredit Holding

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Summary of Investment Information

Project Number

44105

Company Name

ProCredit Holding AG & Co.KGaA

Date SPI Disclosed

Jul 10, 2020

Country

Southern Europe Subregion

Region

Europe

Projected Board Date

Jun 18, 2020

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Sep 5, 2021

Department

Regional Industry - FIG - ECA

Industry

Financial Markets

Previous Events

Approved : Jun 18, 2020
Signed : Jul 9, 2020
Invested : Jul 15, 2020

Sector

Commercial Banking - Trade and Supply Chain

Project Description

The Project consists of a senior loan of up to US$100 million to ProCredit Holding (“PCH” or “ProCredit”) for a tenor of one-year, renewable for an additional one-year. The loan to PCH would be under World Bank Group Fast Track COVID-19 Facility, in particular IFC’s Financial Institutions Response Envelope.

The Project would provide funding to PCH to be channeled to some of its banking subsidiaries in emerging markets that will then extend new trade-related or working capital loans to small and medium enterprises (“SMEs”) whose cash flows have been disrupted by the global outbreak of the coronavirus pandemic. Many SMEs in developing countries are experiencing strained cash flows, lower profit margins and balance sheet constraint, and are in need of working capital liquidity as short-term bridge financing.

Associated Advisory Engagement

N/A

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
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

IFC has counter-cyclical role during crises, particularly when other lending institutions' appetite may be subdued. Additionality arises from its unique ability to deploy at scale, pertaining to volume and geographic reach, through its (i) successful experience in rapid crisis response; (ii) extensive client bank and partner networks; and (iii) set of programs aimed at investing both large scale, transactional liquidity and working capital in emerging markets.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The project is classified as FI-2 according to IFC's Sustainability Policy. The key sectors in PCH’s SME portfolio are low-medium risk activities such as wholesale and retail trade, small scale agriculture, production, transportation and storage. Most of the portfolio to be supported through this project is expected to have potential limited adverse environmental or social risks or potential impacts that are few in number, generally site specific, largely reversible, and can be readily addressed through mitigation measures. Given the nature of this investment, the Project will not support coal-related and higher risk activities involving a) involuntary resettlement, b) risk of 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. Applicable E&S requirements for this investment will be IFC Exclusion List and the national environmental and social laws and regulations. In addition, PCH and relevant subsidiaries will comply with the requirements of IFC’s Performance Standard 2 on Labor and Working conditions.

The main E&S risks and impacts of this investment relate to PCH Group and subsidiaries having adequate systems and capacity in place to manage the operations associated with their lending activities to SMEs being financed in accordance with IFC’s applicable requirements across all countries of operation.

Summary of Client Environmental and Social Management System (ESMS)

As an existing IFC client, PCH has an Environmental and Social Management System (“ESMS”) in place applicable to the entire Group operations and has designated staff members with overall responsibility for its implementation across all ProCredit Institutions. PCH will be required to continue application of ESMS at its subsidiaries and retain proper internal capacity. In addition, the Group will be required to continue to comply with the requirements of IFC's PS2 on Labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

ProCredit Holding AG & Co. KGaA
Martin Godemann
Group Funding
+49 (0)69 951 437 160
Martin.Godemann@procredit-group.com
Rohmerplatz 33 – 37 60486 Frankfurt am Main, Germany
www.procredit-holding.com

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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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