46242 - BI COVID 19 WCS

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Summary of Investment Information

Project Number

46242

Company Name

BANCO INDUSTRIAL SA

Date SPI Disclosed

Oct 3, 2022

Country

Guatemala

Region

Latin America and the Caribbean

Projected Board Date

Nov 4, 2022

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

May 3, 2025

Department

CF1S7 - Regional Industry - FIG LAC/FIG Investment Operations - LAC

Industry

Financial Markets

Previous Events

Approved : Oct 19, 2022
Signed : Oct 31, 2022
Invested : Nov 4, 2022

Sector

Commercial Banking - General

Project Description

The proposed investment consists of a one-year, renewable senior loan of up to US$100 million to Banco Industrial S.A (Banco Industrial or the Bank) under the FIG COVID-19 Emergency Response WCS Envelope (WCS Envelope). The WCS Envelope is designed to provide funding to existing IFC client banks in emerging markets that will then extend new trade-related or working capital loans to companies whose cash flows have been disrupted by the global outbreak of the coronavirus pandemic. Banco Industrial is a potential partner for IFC across Central America, given that is the largest bank in Guatemala, and through this project IFC will strengthen its portfolio of small and medium enterprises (SMEs) and women-owned SMEs (WSMEs). IFC’s investment will deliver working capital support targeted to SMEs, with a minimum [20%] of the proceeds used to finance WSMEs that are impacted by the crisis (the “Project”).

Associated Advisory Engagement

IFC’s Banking on Women (BOW)

The Project could also be complemented with a BOW advisory engagement which will deepen the Bank’s ability to reach women-owned businesses through strategic planning, market positioning and segmentation, product redesign and staff training.

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
Straight Senior Loan	Loans to Woman-Owned SMEs

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

Development Impact

E&S Category Rationale / Risks and Mitigation

The Project consists of up to US$100 million financial package under the FIG COVID-19 Emergency Response WCS Envelope ("WCS Envelope") for Banco Industrial S.A. ('the Bank') to expand Bank's micro, small and medium enterprises (SMEs) loan portfolio targeting women owned SMEs (WSME). The E&S risks and impacts of the Project derive from the Bank's capacity to assess and manage E&S risks associated to the diversified pipeline in sectors such as wholesale trade, real estate, manufacturing, and are expected to be mostly OHS related and low to medium in E&S risk nature. Additionally, the Project will not support investments involving activities described in IFC's exclusion list, companies operating in the coal sector, category A projects or activities with significant E&S impacts and risks such as (a) involuntary resettlement, (b) adverse impacts on indigenous peoples, (c) significant impacts on the environment, community health and safety, biodiversity, cultural heritage, or (d) substantial occupational health and safety risks. The Project has been categorized as FI-2, in accordance with the IFC's Sustainability Framework.

Banco Industrial has an ESMS in place since 2019, mostly oriented at screening potential sub-clients against its exclusion list and applicable E&S laws and regulations, including required licenses and permits. The exclusion list and the procedures are mostly in line with IFC requirements; however, the thresholds to trigger the E&S local law assessment for the Bank is US$10 million. Further, the Bank has an ESG management unit, which is responsible for ESG strategy and the ESMS (design and operation). As part of this Project, the client will be required to enhance its E&S practices by strengthening its tools and adapt thresholds to screen targeted SME sub-clients against host country E&S laws and regulations, and additional enhancements on HR aspects, mostly oriented at preventing any kind of harassment. According to the new FI disclosure requirements, the client will allow IFC to disclose a summary of its ESMS. The client will submit an annual E&S report.

Contacts

For Inquiries About the Project, Contact

Banco Industrial
Jose Javier Jo Lam
Subgerente Corresponsalía y Financiamiento Internacional
+502 2331-6234
jlam@bi.com.gt
Via 5, 5-34 zona 4, Centro Financiero, Torre 3 Nivel 8, Guatemala, 01004
www.bi.com.gt

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Email: cao@worldbankgroup.org
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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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Task Title & Description	Anticipated Completion Date
Enhance ESMS	09/30/2022
E&S training	09/30/2022
HR policies/procedures	03/29/2023

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