46427 - MNT Group

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Summary of Investment Information

Project Number

46427

Company Name

MNT INVESTMENTS BV

Date SPI Disclosed

Jan 26, 2023

Country

Egypt, Arab Republic of

Region

Africa

Projected Board Date

Apr 9, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jul 26, 2024

Department

Equity Portfolio Management

Industry

Financial Markets

Previous Events

Approved : Apr 5, 2024
Signed : Apr 10, 2024
Invested : Jul 19, 2024

Sector

Virtual lending, P2P, crowdfunding

Project Description

The Project consists of an equity investment in MNT Investments BV (the “Company”). The Company operates MNT-Halan, an Egyptian fintech platform offering small and micro business lending, payments, consumer finance and e-commerce services.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	40.0
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 Equity	Equity & QE - Fintech

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

Development Impact

The Project is expected to promote increased access to finance for micro, small and medium enterprises (MSMEs) and consumers in Egypt. Beyond the Project, IFC also anticipates that the investment will help improve competitiveness in the Egyptian MSME finance market by supporting a leading innovator that leverages technology to provide competitive MSME and consumer credit at scale.

IFC is providing both financial and non-financial additionality to the Company. IFC will provide financial additionality by providing early-stage venture capital (VC) financing in a market with limited VC penetration. IFC’s non-financial additionality consists of standard settings through IFC’s support in adopting best practices in environmental and social (E&S) risk management.

E&S Category Rationale / Risks and Mitigation

The project is categorized as FI-2 (medium risk) as per IFC's Policy on Environmental and Social Sustainability. The Project entails an investment in equity shares of MNT-Halan, a leading digital lending, and microfinance Company in Egypt. MNT-Halan’s microfinancing portfolio is mainly composed of microenterprises, and a small share of SMEs, active in the commerce, handicrafts, agriculture, and services sectors with typically low E&S risks and impacts. In addition to lending, the Company also operates a tricycle facility and warehouses. The Company’s lending activities as well as the Company’s direct activities have limited, site-specific environmental and social impacts that can be readily addressed through mitigation measures. IFC’s investment will not support higher risk transactions that may include: (a) involuntary resettlement; (b) potential 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 main E&S risk of this proposed investment are related to MNT-Halan’s capacity to develop, correctly implement, and update as needed, an environmental and social management system to manage the E&S risks associated with its MSME lending, and non-lending activities. These include risks related to occupational health and safety, labor & working conditions, pollution, and waste and wastewater management, and supply chain management. For this investment, MNT-Halan will be required to screen its MSME lending activities against the IFC Exclusion List and the national E&S laws and regulations. In addition, MNT-Halan will be required to establish and implement HR policies and procedures to meet the requirements of IFC's Performance Standard 2 on Labor and Working conditions, and Life & Fire safety requirements in its own operations.

MNT-Halan is currently developing an ESMS which covers E&S risks and impacts associated with the Group’s MSME lending and non-lending activities. The relevant standards as indicated in the ESMS include an exclusion list which covers the IFC exclusion list, national E&S laws and regulations and the IFC Performance Standards. The Group’s draft ESMS includes E&S risk screening categorization guidance and E&S questionnaires and E&S action plan templates to support the ESMS implementation. The E&S risk assessment process includes criteria for screening, E&S risk categorization and due diligence (based on desktop review and site visits, as applicable), development of an E&S action plan to address gaps identified, inclusion of E&S conditions in the letter of offer, and E&S monitoring. The Group has designated an ESG Head with day-to-day responsibilities in the ESMS development, and implementation once the ESMS is rolled out. The draft ESMS will need to be enhanced to further define the E&S categorization method and to cover the E&S risk management requirements for SME loans. MNT-Halan will also be required to improve the Environment, Health and Safety management procedures and practices at its tricycle manufacturing facility.

S.no	Title	Anticipated Completion Date	Status
1	Nominate officers	05/07/2023	Completed
2	Establish SEMS	05/07/2023	Completed
6	Staff Training	09/07/2023	Completed
9	Other1 - Hire an OHS specialist	08/07/2023	Cancelled
10	Other2 - Develop training plan	06/07/2023	Completed
11	Other3 - Submit ESMS implementation report	04/15/2026	Pending
12	Other4 - Develop and implement HR policies and procedures in line with the IFC PS2	11/07/2023	In Progress
13	Other5 - Enhance the tricycle manufacturing facility Emergency Response Plan	05/13/2023	Cancelled
14	Other6 - Improve E&S management practices in the tricycle manufacturing facility	08/13/2023	Cancelled

Contacts

For Inquiries About the Project, Contact

MNT Investments BV
Andre Valavanis
VP of Investments
+201003616992
andre.valavanis@halan.com
2 Lebanon Street, Giza, Egypt
www.mnt-halan.com

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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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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