44138 - BOP Esquire

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Summary of Investment Information

Project Number

44138

Company Name

ESQUIRE FINANCING INC

Date SPI Disclosed

Feb 15, 2022

Country

Philippines

Region

East Asia and the Pacific

Projected Board Date

Mar 24, 2022

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Aug 17, 2022

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Apr 15, 2022
Signed : May 6, 2022
Invested : Aug 15, 2022

Sector

Finance Companies

Additional Project Attributes

Blended Finance

Project Description

The proposed investment is a senior loan of up to US$20 million to Esquire Financing Inc. (EFI), the fourth largest non-bank financing institution in the country and a market leader in the unsecured small- and medium- enterprise (SME) loan segment. The Project is expected to support the growth of the Company’s loan portfolio and improve access to finance for SMEs during and post the COVID-19 pandemic. Proceeds of IFC’s loan to EFI will be 100% earmarked to women-owned SMEs (WSME). Moreover, the Project is expected to be consecutively supported by the Women Entrepreneurs Opportunity Facility (WEOF) and the Women Entrepreneurs Finance Initiative (We-Fi) as described in the Blended Finance Section.

Associated Advisory Engagement

TBD

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	19.30
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 Woman-Owned SMEs

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

Development Impact

Project outcome: By partnering with an NBFI focused on unsecured business loans to SMEs, the Project will contribute towards narrowing the financing gap in the country by providing additional loans to WSMEs during the tenor of the facility. This is expected to increase economic activity and job creation in the Philippines, thereby expediting post-crisis recovery. Market-level outcome: As macroeconomic instability and uncertainty on long-term risks has led to increased difficulties in accessing medium-term funds needed to support the recovery and growth of lending operations, IFC anticipates that project will support resilience amongst microfinance and Base of the Pyramid (BOP) finance providers and catalyze investor response.

E&S Category Rationale / Risks and Mitigation

The proposed project is a senior loan to support Esquire Financing Inc. (EFI or the Company) to grow small and medium enterprises (SMEs) lending activities. EFI is a non-banking financial institution in the Philippines providing individual and business financing, which comprises mostly SME loans and very small amount of vehicles leasing finance. The key industrial sectors EFI is exposed to include mainly wholesale and retail trade, service, manufacturing, construction and real estate, logistic, hospitality and agriculture. The project entails limited environmental and social (E&S) risks and adverse impacts that are few in number, generally site-specific, largely reversible and can be readily addressed through mitigation measures. The project will not support coal-related activities and higher E&S risk business activities that may include 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. Therefore, the project has been categorized as a Category FI-2 project according to IFC Sustainability Policy. The applicable E&S performance requirements will be IFC Exclusion List and relevant host country E&S laws and regulations.

The key risks and impacts of the project derive from EFI's capacity and quality of environmental and social risk management system (ESMS) in place to identify and manage the E&S risks associated with the SMEs supported by the project. These risks are typically related to, among others, occupational health and safety, air, waste and wastewater pollutions, and labor and working conditions. The company currently doesn't have an ESMS and E&S roles and responsibilities haven't been nominated yet. Under this project, EFI will be required to designate an E&S officer and establish an ESMS to allow screening, assessing and managing E&S risks of SMEs against applicable E&S performance requirements. EFI's labor practices are found generally in line with IFC Performance Standard 2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Esquire Financing Inc.
Lorenzo Luiz Ico
Finance Manager
+639171034244
enzo@esquire.com.ph
31F Penthouse High Street South Corporate Plaza Tower 1, 26th Street, Fort Bonifacio, Taguig, PH
https://www.esquire.com.ph/

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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.

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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 E&S Officer	04/24/2022
E&S training	05/24/2022
Develop ESMS	05/24/2022

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Summary of Investment Information

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Sponsor / Cost / Location

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E&S Category Rationale / Risks and Mitigation

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