45349 - RSF Orange Bank Africa CI

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Summary of Investment Information

Project Number

45349

Company Name

RSF Orange Bank Africa CI

Date SPI Disclosed

Apr 18, 2023

Country

Cote D'Ivoire

Region

Africa

Projected Board Date

May 30, 2023

Environmental Category

FI-3 - No Impact

Status

Pending Approval

Last Updated Date

May 25, 2023

Department

CF3S1 - Regional Industry - FIG Africa/FIG Africa Wst & Cen

Industry

Financial Markets

Sector

Commercial Banking - SME Finance

Project Description

The project consists of an unfunded Risk Sharing Facility (“RSF”) renewable annually with availability period of up to 3 1-year period subject to certain conditions and internal approval for an up to US$15 million IFC investment in local currency equivalent, providing a 50% coverage of a portfolio of up to US$ 30m equivalent, consisting mostly of short term working capital loans to micro enterprises with tenors ranging from 30 days to up to 180 days to be originated by Orange Bank Africa (‘OBA’ or the ‘Bank’), leveraging on its existing ‘Tik Tak’ digital credit and savings application. In addition, subject to further approvals, the project is expected to be supported by the IDA20 Private Sector Window’s Blended Finance Facility (“IDA PSW-BFF”) to de-risk the investment.

The RSF will support the scaling of OBA’s lending to Micro, Small and Medium Enterprises (“MSMEs”) including but not limited to agents and merchants in Côte d'Ivoire (“CDI”) and Senegal, 2 countries of the West African Economic and Monetary Union (WAEMU) region.

Associated Advisory Engagement

The Project is part of an ongoing comprehensive engagement with OBA involving the FIG Investment, Advisory and Upstream teams. The Project is linked to the Upstream Seed aimed at finding solutions for mobile money network financing (#605955) and a subsequent Upstream Project, the OBA Digital MSME Financing (#607020), which resulted in the signing of a Consulting Agreement with OBA in May 2022 including several workstreams aimed at enabling IFC’s investment and improving investment outcomes. In parallel, the FIG Upstream Advisory team is preparing an engagement directly with Orange Money Côte d'Ivoire to support the mobile money operator’s merchant network.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	45.0
Loan
Equity

Development Impact

IFC's expected additionality in this Project is both financial and non-financial: (i) IFC will provide a risk mitigation tool to OBA to help increase access to finance for MSMEs in CDI and Senegal, which have heightened perceived credit risks; (ii) IFC will extend non-financial additionality through an Upstream/Advisory program aimed at strengthening the Bank's capacity to leverage digital tools to finance MSMEs in a sustainable manner and integrating the risk mitigation product into its procedures, including to help the Bank better utilize the RSF facility, specifically how to integrate the risk mitigation product into the bank's procedures; (iii) IFC will support OBA in the development and implementation of its ESMS; (iv) IFC's contribution is expected to go beyond commitment, including continuing to provide credit scoring support (particularly through assessing current model & providing recommendations for enhancements), support to enhance data quality, identifying new customer segments to help with innovative product development including for women MSMEs in rural areas, and financial education for Tik Tak borrowers.

E&S Category Rationale / Risks and Mitigation

OBA’s lends to micro-enterprises, primarily in the services, commercial and fashion sector. The environmental and social risks of these microfinance activities are expected to be low, therefore the Project has been categorized as FI-3 according to the IFC's Sustainability Policy. The Project will not support coal-related activities, or higher 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. For this project the Bank will be required to appoint an E&S Officer and to develop a simple Environmental and Social Management System (ESMS) and to screen the activities it supports against the IFC Exclusion List and any applicable E&S laws and regulations. The Bank will also be required to meet basic Life & Fire safety requirements and the requirements of IFC’s Performance Standard 2 on Labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

Orange Bank Africa SA
Mr Jean-Louis Menann-Kouame
Chief Executive Officer
(+225)2721599300
Jean-louis.menann-kouame@orangebank.ci
Immeuble BAINI, rue Louis Lumiere, Zone 4, Marcory, Abidjan 04 BP 2760 Abidjan 04 – Côte d’Ivoire
Websitewww.orangebank.ci

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