46195 - HTB Women

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Summary of Investment Information

Project Number

46195

Company Name

HATTHA BANK PLC.

Date SPI Disclosed

Mar 3, 2022

Country

Cambodia

Region

East Asia and the Pacific

Projected Board Date

Apr 4, 2022

Environmental Category

FI-2 - Limited

Status

Pending Approval

Last Updated Date

Mar 4, 2022

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Sector

Commercial Banking - Microfinance

Additional Project Attributes

Blended Finance

Project Description

The proposed investment is a 5-year senior loan of up to US$100 million to Hattha Bank Plc. (HTB or the Bank), formerly Hattha Kaksekar Limited (HKL), consisting of an A Loan, for IFC’s own account, of up to US$25-50 million and a mobilization of up to US$50-75 million. IFC’s investment will be exclusively used for on-lending to women-owned micro, small and medium enterprises (WMSMEs) in Cambodia to support the growth of HTB’s WMSME portfolio (the Project), which is expected to contribute to narrowing the financing gap to WMSMEs in Cambodia.

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.

Sponsor / Cost / Location

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: The Project will contribute towards narrowing the WMSME financing gap by providing additional loans to WMSMEs during the tenor of the loan. This is expected to increase economic activity and job creation in Cambodia to expedite post-crisis recovery. Market-level outcome: IFC’s engagement with the Bank will mobilize private sector investors to support the financial sector in Cambodia and increase access to finance to the underserved WMSMEs.

Finance Structuring: The Project will provide the Bank with 5-year senior loan. Long-term funding is yet scarce in volume in Cambodia market, therefore IFC syndication at a meaningful size will diversify the Bank’s capitalization and improve its resilience, contributing to the increase in access to finance for WMSMEs through long-term instrument. Resource Mobilization: Mobilization of international lenders through B1-loan/Parallel loan is expected to facilitate international investment in the private sector of Cambodia and help the Bank to diversify the lender base.

E&S Category Rationale / Risks and Mitigation

The project is a 5-year senior loan to support HTB's growth in micro, small and medium enterprise (MSME) lending activities in Cambodia. HTB is a commercial bank, recently transformed from a microfinance institution, and provides mainly retail and MSME lending in the sectors such as agriculture, wholesale and retail, construction, services and food processing. The project's overall E&S risks is considered medium, and the project has been categorized as FI-2 in accordance with IFC's Sustainability Policy. The project will not support any coal-related activities or any higher E&S risk business activities that may involve 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 performance requirements will be the IFC Exclusion List and relevant host country E&S laws and regulations.

The project's key E&S risks derive from HTB's lending to SMEs, and its capacity and quality of environmental and social risk management system (ESMS) in place to manage such risks. Typical E&S risks associated with the SME lending activities include occupational health and safety, life and fire safety, labor & working conditions, pollution, and waste management. Being an existing client of IFC, HTB has established an ESMS for its MSME lending activities and has appointed designated E&S roles and responsibilities. The ESMS consists of an E&S policy approved by its board and E&S procedures that have been incorporated into the credit process to screen against IFC Exclusion List, review compliance with relevant national E&S laws and regulations, and conduct portfolio E&S monitoring. The labor practices of HTB are found overall consistent with the requirements of IFC's Performance Standard 2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Hattha Bank Plc.
Socheata IN
VP & Head of Treasury Department
(+855) 69 555 523
socheata@hatthabank.com
Sangkat Boeng Tumpun 1, Khan Mean Chey, Phnom Penh, Cambodia.
https://www.hatthabank.com

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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.

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