47696 - Banque Misr SSL

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Summary of Investment Information

Project Number

47696

Company Name

BANQUE MISR SAE

Date SPI Disclosed

May 26, 2023

Country

Egypt, Arab Republic of

Region

Africa

Projected Board Date

Jun 30, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Nov 2, 2023

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Jun 28, 2023
Signed : Sep 19, 2023
Invested : Oct 31, 2023

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The project consists of a 5-year senior loan of up to US$260 million to Banque Misr (BM or the Bank), a new partner and the second largest public bank in Egypt. The proceeds of the IFC investment will be channeled exclusively towards the expansion of BM’s loans to privately owned small and medium enterprises (SMEs) and very small enterprises (VSEs) including women owned enterprises (WOEs) (the Project). The senior loan consists of US$216.7 million for IFC’s own account and US$43.3 million from IFC acting in its capacity as implementing entity for the Managed Co-Lending Portfolio Program (MCPP). The Bank has an extensive outreach to the underserved market segment of SMEs, VSEs, and WOEs; being the first Bank in Egypt to launch a women entrepreneur program for financial and non-financial services through IFC Advisory Services engagement. The project is expected to be supported by Global Small and Medium Enterprise Finance Facility (GSMEF) as described in the Blended Finance Section.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	216.67
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 Woman-Owned SMEs
Straight Senior Loan	Loans to MSME (mix of Micro and SME)
Syndications	Loans to Woman-Owned SMEs
Syndications	Loans to MSME (mix of Micro and SME)

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

Development Impact

The most significant, expected project-level outcome is increased access to finance for SMEs as well as WOEs. Beyond the Project, IFC’s programmatic approach to increase MSME financing in Egypt by concurrently pursuing multiple projects with banks that cover close to 30% of total market share is expected to demonstrate the viability of supporting this underserved segment through the demonstration and replication channel in an environment of devaluations, challenging macro and global economic conditions

IFC’s expected additionality in this Project is both financial and non-financial in the form of: i) financing structure that will provide the Bank with long-term funding in foreign currency, to help the Bank implement its growth strategy across the VSE, SME, and WOE segments; ii) resource mobilization by mobilizing up to US$43.3 million under MCPP; and iii) standard setting by guiding and supporting the Bank with the development and implementation of an Environmental and Social Management System allowing it to manage Environment and Social (E&S) risks in a manner compliant with international best practices.

E&S Category Rationale / Risks and Mitigation

The project will support very small, small, and medium enterprises lending activities of Banque Misr in Egypt. The VSE and SME business sectors to be supported by the project mainly include construction, manufacturing, real estate development, food and beverage, and other services which are expected to have potential limited adverse environmental and/or social risks or impacts that are few, generally site specific, largely reversible, and can be readily addressed through mitigation measures. The Project has been categorized as a Category FI-2 project according to IFC Sustainability Policy. The Project will not support coal-related activities and 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 investment, Banque Misr is required to screen eligible VSE and SME loans against the IFC Exclusion List and host country environmental and social laws and regulations. In addition, the Bank is required to meet Life and Fire Safety requirements and the requirements of IFC's Performance Standard 2 on Labor and Working Conditions. The Project's key E&S risks and impacts of this Project derive from the Bank's capacity to identify and manage potential environmental and social risks associated with its lending activities. The key E&S risks are typically related to occupational health and safety and labor and working conditions, waste and wastewater management, pollution prevention among others. The Bank has also a dedicated HR team and established HR policies and manuals generally in line with IFC's labor standards under PS2: Labor and Working Conditions. To mitigate the risks inherent to the Project, the Bank will be required to develop, and implement an E&S training plan as well as develop and implement an E&S Management system applicable to its VSE and SME lending activities.

The Bank has a dedicated E&S officer and a published sustainability policy statement but does not have a Management System in place. The Bank will develop and implement an E&S management system to screen eligible VSE and SME loans against the IFC Exclusion List and host country environmental and social laws and regulations. In addition, the bank will develop and implement an E&S training plan for relevant staff.

Contacts

For Inquiries About the Project, Contact

Banque Misr SAE
Mohamed Abdel Latif
Deputy General Manager
+20 (2) 2399 7158
moaabdellatif@banquemisr.com
149 Mohamed Farid St. Downtown, Cairo
www.banquemisr.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.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date
Develop an E&S training plan	07/06/2023
Implement the E&S training Plan	04/14/2024
Develop an E&S Management System	07/06/2023
Share E&S Management System implementation report	04/14/2024

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Summary of Investment Information

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