48039 - MFP-BOP BNI Madagascar

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

48039

Company Name

BNI MADAGASCAR SA

Date SPI Disclosed

Nov 6, 2023

Country

Madagascar

Region

Africa

Projected Board Date

Aug 30, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jan 4, 2025

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Aug 29, 2024
Signed : Dec 13, 2024
Invested : Dec 24, 2024

Sector

Commercial Banking - SME Finance

Additional Project Attributes

Blended Finance

Project Description

The proposed project consists of a 3-year senior unsecured loan of up to US$30 million in Malagasy Ariary (MGA) equivalent to BNI Madagascar (BNI or the Bank) to support the provision of funding to micro, small, and medium-sized enterprises (MSMEs) in Madagascar (the Project). The project will be part of the MSME Finance Platform - Base of Pyramid (BOP) Envelope and 30% of the loan’s proceeds will be earmarked to women and women-owned enterprises, on a best-efforts basis.

The Project will be supported by International Development Agency IDA Private Sector Window (IDA-PSW) Blended Finance Facility (BFF) allocated to the BOP Envelope under the MSME Finance Platform, as well as IDA-PSW Local Currency Facility (LCF) as described in the Blended Finance section.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
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 MSME (mix of Micro and SME)

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

Development Impact

Project-level Outcomes: Stakeholder Effects - Access to finance, already limited for microentrepreneurs and SMEs, has become increasingly difficult in the current context due to high borrowing costs and decreasing risk appetite by financial institutions. The Project supports BNI, a leading financial institution in Madagascar, to provide financing to support microentrepreneurs and SMEs in overcoming liquidity constraints and pursue opportunities for economic recovery and growth. Market-level Outcome: Resilience - IFC anticipates that the project will support resilience among BOP finance providers - including banks and microfinance institutions - by helping the market deal with persisting uncertainty, tighter financial conditions and catalyzing investments in the sector by demonstrating the viability of lending to BOP providers.

The Project will provide local currency financing, not readily available in the market due to an underdeveloped capital market and the challenges of international investors in providing local currency funding at affordable rates. These conditions limit the ability of private financial institutions to raise wholesale capital leaving even one of the largest banks in the country reliant primarily on deposits and short-term interbank loans.

E&S Category Rationale / Risks and Mitigation

The Project aims to support the growth of BNI’s MSME loan book, which includes exposure to sectors such as trade and distribution, health education and social, agribusiness, fishing, manufacturing, textiles, telecom and others, which entail limited adverse E&S risk and impacts that are few in number, generally site-specific, largely reversible and readily addressed though mitigation measures. The overall portfolio risk is thus considered medium, therefore the Project has been categorized as FI-2 in accordance with IFC’s Sustainability Policy. The main E&S risks and impacts of this Project relate to the ability of BNI to conduct adequate E&S due diligence and monitoring to identify and manage the E&S risks associated with MSMEs in line with IFC’s policy requirements. These risks are typically associated with labor and working conditions, occupational health and safety, pollution prevention and atmospheric emissions, or waste and wastewater management, amongst others. An assessment of labor practices in relation to IFC Performance Standard 2 and Life and Fire Safety (“LFS”) requirements revealed that BNI meets the respective IFC requirements. For this Project, BNI will be required to enhance the ESMS, train staff on E&S, provide evidence of ESMS implementation, and report annually to IFC. The Bank will also be required to continue meeting labor and working conditions in line with IFC Performance Standard 2 and LFS requirements. The Project will not be used to support coal and 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 applicable requirements for the MSME portfolio will be the IFC Exclusion List and the national E&S laws and regulations in Madagascar.

BNI has an E&S team and an Environmental and Social Management System (“ESMS”) for identifying, assessing, and managing the E&S risks and impacts associated with its portfolio. The ESMS includes an E&S policy, roles and responsibilities, process and tools for screening against the exclusion list, categorization and criteria for identifying higher-risk activities, due diligence, loan agreement clauses, portfolio management and reporting. The scope of the ESMS includes MSMEs and the applicable requirements are exclusion list and Malagasy E&S laws and regulations amongst others. The E&S team, as well as relationship managers are involved in the implementation process of the management system. In order to improve the operationalization of the ESMS, BNI will be required to assign E&S review responsibilities to the credit team. BNI will also be required to develop a training program and provide training to all relevant staff. The training should focus on practical implementation of the ESMS. Finally, BNI will be required to improve accuracy of screening and categorization across the portfolio and perform E&S due diligence and monitoring as per the ESMS procedures.

S.no	Title	Anticipated Completion Date
1	Staff Training	10/31/2024
2	Enhance ESMS	09/30/2024
3	Submit implementation report	01/31/2025

Contacts

For Inquiries About the Project, Contact

BNI Madagascar
Issam El Ansari
Head of Global Transactions and Financial Banking Services
(+261) 20 22 396 36
Issam.El-Ansari@bni.mg
Antananarivo 101, Madagascar
https://www.bni.mg/

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

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.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

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.

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

Blended Finance

IFC's Investment as Approved by the Board

FIG Use of Proceeds/Beneficiaries

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer