45483 - BOP EU Tchad

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Summary of Investment Information

Project Number

45483

Company Name

EXPRESS UNION TCHAD

Date SPI Disclosed

Mar 30, 2023

Country

Chad

Region

Africa

Projected Board Date

May 1, 2023

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Jul 20, 2024

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Jun 12, 2023
Signed : Jun 26, 2023
Invested : Jul 17, 2024

Sector

Microfinance and Small Business - Non Commercial Banking

Additional Project Attributes

Blended Finance

Project Description

The proposed project consists of an up to 3-year unsecured senior loan of up to XAF1.9 billion or approximately US$3 million equivalent to Express Union Tchad (“EUT” or the “MFI”) to help increase its lending capacity to retail borrowers in Chad. The financing package will comprise up to XAF 625 million (c. US$1 million) from IFC’s own account and mobilization from other lenders of up to XAF 1.25 billion (c. US$2 million). The project will be processed under IFC’s COVID Base of Pyramid (“BOP”) Facility and will make use of the IDA Private Sector Window (“PSW”) Pooled First Loss Guarantee (“PFLG”) as well as the Local Currency Facility (“LCF”).

Associated Advisory Engagement

There will be no advisory services accompanied with the proposed investment.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.03
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 VSEs

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

Development Impact

The project is expected to provide access to finance for individuals to support economic activity and resilience in the context of a fragile economy. 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.

- Financial Additionality: Financing structure (local currency, tenor) and Resource Mobilization - The Project will support Express Union Tchad, with an up to 3-year local currency loan not readily available in the market and increasingly scarce since the outbreak of the COVID-19 pandemic. EUT is solely reliant on deposits for financing its portfolio with no access to local or international wholesale funding. As part of this project, IFC will disburse up to US$1 million and mobilize an additional up to US$2 million from two other institutional lenders. - Non-Financial Additionality: Standard setting - IFC expected to provide non-financial additionality to EUT in the form of standard setting, by strengthening its governance and risk management procedures including AML/CFT and E&S.

E&S Category Rationale / Risks and Mitigation

The proposed project consists of a 3-year unsecured senior loan of up to S$3 million to Express Union Tchad ('EUT') to support the needs of the retail segments in Chad. The environmental and social (E&S) risks of the Banks portfolio carry low or no adverse environmental or social impacts, 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 Client will be required to meet basic Life & Fire safety requirements and the requirements of IFC's Performance Standard 2 on Labor and Working conditions. IFC will monitor changes in the client's portfolio supported by the Project and may require additional E&S measures if there's an increase in E&S risk.

Contacts

For Inquiries About the Project, Contact

Express Union Tchad
Mr. Ebenezer DONGMO
Chief Executive Officer
(235) 66201389
edongmo@expressunion.net
B.P 319
www.expressunion.net

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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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