46368 - CCA-Bank Senior Loan

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Summary of Investment Information

Project Number

46368

Company Name

CREDIT COMMUNAUTAIRE D'AFRIQUE-BANK S.A.

Date SPI Disclosed

Apr 26, 2023

Country

Cameroon

Region

Africa

Projected Board Date

May 26, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jul 17, 2024

Department

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

Industry

Financial Markets

Previous Events

Approved : Jun 6, 2023
Signed : Jun 16, 2023
Invested : Jul 15, 2024

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The proposed project consists of a senior loan with a maturity of up to six years for an amount of up to XAF10 billion (or approximately US$16.6 million) to support the growth of the loan portfolio of micro, small and medium enterprises (“MSMEs”), including women owned/led MSMEs (“WMSMEs”) of Crédit Communautaire d’Afrique Bank (“CCA-Bank” or the “Bank”) (the “Project”). The SME loans will be originated by CCA-Bank, a financial institution that was the largest microfinance institution (“MFI”) in Cameroon up until May 2018 when it obtained a banking license and that is currently the eighth largest bank in Cameroon in terms of net loans.

Associated Advisory Engagement

The Project will be complemented by IFC’s advisory services aimed at supporting CCA-Bank to develop and strengthen the Bank’s key frameworks. The comprehensive advisory engagement will start with a bank diagnostic in May 2023 to identify gaps in strategy, RM, HR, IT, product development and organization. The next phase of the engagement would include: (i) setting up the structure and the governance for the IFC’s proposed recommendations in each selected framework, (ii) building capacity and a risk culture and (iii) providing strategic mentoring post-implementation to support adoption and resolve any challenges. At project completion, the Bank is expected to be more advanced in the implementation of the selected frameworks. Finally, the advisory services project will also include WSME-linked recommendations to help the Bank improve its gender reporting capabilities, products and sales approach.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	16.28
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
Straight Senior Loan	Loans to MSME (mix of Micro and SME)
Straight Senior Loan	Loans to Woman-Owned SMEs
Straight Senior Loan	Loans to SME Borrowers

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

Development Impact

The most significant expected project-level outcome is the increase in access to finance for small and medium enterprises (“SMEs”), including women owned/led SMEs. This Project is also part of a program of interventions that IFC is pursuing with several financial institutions in Cameroon with the intention of providing SME financing to promote greater market competitiveness through demonstration and replication effect.

IFC’s additionality through this Project is both financial and non-financial. Financial additionality is in the form of a financing structure, through the provision of a six-year loan, a tenor not readily available in the market and in local currency enabled by IDA PSW LCF. Non-financial additionality stems from sharing IFC’s global knowledge through an integrated advisory services (“AS”) program including a diagnostic aimed at strengthening the Bank’s key frameworks and from setting environmental and social (“E&S”) risk management (“RM”) standards.

E&S Category Rationale / Risks and Mitigation

The Project entails a senior loan to CCA-Bank in Cameroon for on-lending to MSMEs. CCA's SME portfolio mainly comprises businesses engaged in trade, construction, education, and manufacturing. The E&S risks and impacts associated with the Bank's MSME lending activities are expected to be limited and readily addressed through mitigation measures. These risks typically include occupational health and safety, pollution prevention, waste and wastewater management, labor and working conditions issues, biodiversity, and community impacts, among others. The project will not support coal-related activities, or higher 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. The Project has been categorized as Category FI-2 in accordance with IFC's Environmental and Social Sustainability Policy. The applicable requirements for this Project will be the IFC Exclusion List and the host country laws and regulations. The Bank will also be required to meet the IFC Performance Standards 2 requirements on Labor and Working conditions, as well as Life and Fire Safety.

The Bank does not currently have designated E&S capacity or an E&S management system. For this Project, the Bank will be required to assign an E&S officer, establish and implement E&S policies and procedures, entailing reviewing eligible SME transactions against the applicable requirements, and provide E&S risk management training to bank staff involved in the ESMS implementation. A satisfactory ESMS will be a condition to IFC's commitment.

Contacts

For Inquiries About the Project, Contact

CCA-Bank
Mr. Claude Foudiafia
Head of Finance
(+237) 679 00 96 30
claude.foudiafia@cca-bank.com
1573 Boulevard Rudolph Manga Bell, B.P. 30 388 Yaounde, Cameroon
https://www.cca-bank.com/

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Task Title & Description	Anticipated Completion Date
Nominate officers	05/15/2023
Establish SEMS	05/15/2023
Staff Training	08/15/2023
ESMS implementation report	11/15/2023
Update HR policies	11/15/2023

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