47871 - RSF SGCI

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Summary of Investment Information

Project Number

47871

Company Name

RSF SOCIETE GENERALE DE BANQUES EN COTE D'IVOIRE

Date SPI Disclosed

Oct 28, 2024

Country

Cote D'Ivoire

Region

Africa

Projected Board Date

Dec 15, 2024

Environmental Category

FI-2 - Limited

Status

Pending Approval

Last Updated Date

Mar 12, 2025

Department

CF3WA - Regional Industry - FIG Africa/FIG West Africa

Industry

Financial Markets

Sector

Commercial Banking - General

Project Description

IFC’s proposed investment in Société Générale Côte d’Ivoire (“SGCI”, or the “Bank”) consists of an unfunded Risk Sharing Facility (“RSF”) of up to XOF20 billion (approximately US$33.6 million or EUR29.5 million equivalent) covering 50% of the Bank’s risk on an aggregate Small and Medium Enterprise (“SME”) loan portfolio of up to XOF40 billion (approximately US$67.2 million or EUR58.9 million equivalent). The purpose of the proposed RSF is to support SGCI in expanding its SME-lending operations, enhancing access to finance for SMEs in Côte d’Ivoire. The facility is proposed to be processed under the European Commission (EC)-only sub-portfolio of the Small Loan Guarantee Program, European Commission/Private Sector Window (“SLGP EC/PSW”) which is supported by the European Union, represented by the EC via the European Fund for Sustainable Development (EFSD) for EC-Only Countries, including Côte d’Ivoire.

Associated Advisory Engagement

The Project is expected to be complemented by an SME Advisory Services (AS) program to strengthen SME lending in the Bank. The AS program will provide RSF-related training and capacity building component to ensure optimal utilization of the facility and adequate reporting.

Sponsor / Cost / Location

SLGP EC/PSW benefits from a pooled first loss guarantee provided by the EC via European Fund for Sustainable Development (the EFSD) and the IDA IFC-MIGA Private Sector Window’s Blended Finance Facility (“IDA PSW-BFF”). While SLGP EC/PSW benefits from both EFSD and IDA PSW BFF, sub-projects in non-IDA PSW eligible countries (i.e., EC-only countries) will be supported only by a pooled first-loss guarantee provided by EFSD only, including this Project. The EFSD was launched by EC in 2016 and designed to leverage additional financing by allowing risk sharing with private investors, international financial institutions, and development banks. IDA PSW-BFF was created by the Word Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict-affected states. The concessional support from IDA PSW-BFF and EFSD would enable IFC to support local financial institutions’ lending to MSMEs, and at rates that are affordable. The concessional support will, therefore, also enable SG to expand lending to the MSMEs where lack of financing is limiting the capacity of those clients to grow their businesses.

The level of concessionality (i.e., “subsidy) is estimated to be up to 9.7% of the total portfolio of €486 million of the entire program. The estimate is based on the difference between (i) a “reference price” (either a market price if available; the price calculated using IFC’s pricing model, which comprises three main elements: risk, cost, and profit, or a negotiated price) and (ii) the “concessional price” being charged by the blended concessional finance co-investment under the program.

The Project is also expected to be potentially supported by We-Fi in the form of a PBI of up to 0.6% of the total project cost of US$67.2 million to incentivize on-lending to WSMEs. The estimated subsidy provided by We-Fi assumes that the Project will fully reach the agreed impact and shall only be paid out upon achievement of the pre-defined targets. We-Fi’s support would enable IFC to reach more WSMEs that may otherwise not be served without its support. We-Fi is a multi-donor initiative to address barriers to financial access and provide related services that address public and private-sector constraints to women entrepreneurs and women-led SMEs across the developing world, thereby promoting jobs and boosting economic growth.

As is the case with all IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for Development Finance Institution (“DFI”) Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles, IFC's blended finance approach and governance, and historical information on estimated subsidy levels in IFC's blended finance portfolio can be found at: www.ifc.org/blendedfinance. IFC is open to engaging with other financial institutions in the eligible countries similar to the one proposed in this investment.

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	31.98
Loan
Equity

Development Impact

The most significant expected project-level outcome is the increase in access to finance for SMEs operating in Cote d’Ivoire. This Project is part of a program of interventions that IFC has been pursuing with several FIs in Côte d’Ivoire with the intention of providing SME risk-sharing facilities to promote greater market competitiveness through demonstration and replication effect.

IFC’s expected additionality through this Project is both financial and non-financial. - On Financial Additionality, IFC through its financing structure, the IFC’s RSF under SLGP, and including the support from the European Commission/Private Sector Window (“SLGP EC/PSW”), will provide a critical tool that will allow the Bank to mitigate the challenge it faces in terms of perceived / real risk in lending to SMEs by covering up to 50% of principal losses on all eligible loans that the Bank extends to this segment. - On Non-Financial Additionality, IFC through the Project will support the Bank better cater to its clients helping it cement its position in the local SME market.

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Number of Outstanding Loans, SMEs	loans	Not Available	Not Available	Not Available
Number of Outstanding Loans, WomenOwned Smes	loans	Not Available	Not Available	Not Available
Value of Outstanding Loans, SMEs	USDMill	Not Available	Not Available	Not Available
Value of Outstanding Loans, WomenOwned Smes	USDMill	Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The project consists of an unfunded risk sharing facility for up to eight years whereby IFC will guarantee 50% of Société Générale Côte d’Ivoire (“SGCI”, or the “Bank”)’s credit risk on a target portfolio of loans to Small and Medium Enterprises (“SMEs”). As such, the portfolio supported under the RSF is expected to comprise business activities with limited adverse environmental and social risks or impacts that are few in number, generally site-specific, largely reversible and readily addressable through mitigation measures. As part of the project, the Bank will be required to screen eligible SMEs against the IFC Exclusion List and national E&S laws and regulations in Cote d’Ivoire. Given the project is likely to support SMEs in low to medium risk sectors, the project is not expected to support Coal 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 environment, community health and safety, biodiversity, cultural heritage, or d) significant Occupational Health and Safety risks. The main E&S risks and impacts of this project relate to the ability of SGCI to identify and manage the potential E&S risks and impacts associated with the lending activities to SMEs, as well as the bank’s labor practices. The E&S risks and impacts associated with SME activities are typically low to medium environmental and social risks such as waste management, pollution prevention, labor and working conditions and occupational health and safety, etc. The Bank has a dedicated HR team and established HR policies and manuals generally in line with the IFC PS2.

The Bank has an E&S management system (ESMS) in place covering the Bank’s financing activities. SGCI uses a set of E&S tools and frameworks derived from the SG Group E&S policies and procedures. The ESMS procedures describe the scope, E&S references and guidelines, roles and responsibilities, deliverables and E&S screening and assessment processes. In addition, Groupe Société Générale is signatory of the Equator Principles since 2007 and takes part in various alliances and applies international banking standards such as the Principles for Responsible Banking or the Net-Zero Banking Alliance. As part of this project, the Bank is required to enhance the ESMS to reflect the E&S requirements for portfolio supported under this project. This would include reference to the IFC Exclusion list as well as additional exclusions including coal and coal related activities and higher business risk activities. The revised ESMS will also include E&S tools and questionnaires and establish a clear procedure for E&S monitoring and supervision.
The Bank has an E&S Manager assigned to the West Africa Region. The Bank is required to nominate an E&S officer for SG CI and to further enhance the resources with E&S trainings to relevant staff.

S.no	Title	Anticipated Completion Date
1	Designate an E&S Officer	12/06/2024
2	Develop an E&S training plan	12/15/2024
3	E&S staff training	03/15/2025
4	Enhance the ESMS	12/06/2024
5	Submit ESMS Implementation report	06/15/2025

Contacts

For Inquiries About the Project, Contact

Société Générale Côte d’Ivoire
Brice Oble
Deputy Managing Director
+225 27 20 20 10 10
brice.oble@socgen.com
01 BP 1355 Abidjan 01
www.societegenerale.ci

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