48486 - BOP BCB

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Summary of Investment Information

Project Number

48486

Company Name

BANQUE DE CREDIT DE BUJUMBURA

Date SPI Disclosed

Oct 24, 2023

Country

Burundi

Region

Africa

Projected Board Date

Dec 12, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Feb 18, 2024

Department

CF3S2 - Regional Industry - FIG Africa/FIG Africa East & South

Industry

Financial Markets

Previous Events

Approved : Dec 21, 2023
Signed : Jan 17, 2024
Invested : Feb 16, 2024

Sector

Commercial Banking - SME Finance

Additional Project Attributes

Blended Finance

Project Description

The proposed Project consists of a USD senior loan of up US$20 million comprising of an IFC A loan of up to US$10 million and up to US$10 million in mobilized funding to Banque de Credit de Bujumbura S.M. (“BCB” or the Bank). The project will be processed under the Base of the Pyramid (“BOP”) program and will be supported by IDA Private Sector Window (PSW) Blended Finance Facility. IFC’s investment will help the Bank scale up lending to micro, small and medium enterprises (“MSMEs”) in Burundi, in the context of FX scarcity in the country. The proposed investment will be accompanied by a US$5 million trade finance facility under IFC’s Global Trade Finance Program (GTFP) to support international trade financing for local exporters/importers.

Associated Advisory Engagement

IFC Advisory services team is exploring potential support with an MSME advisory program to help the Bank on the implementation of its MSME Strategy and strengthen the Bank’s SME banking capacity, including for gender finance. A Digital Financial Services advisory program is also proposed to support the bank in articulating its digital finance strategy and developing the financial and operating model for digital transformation.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
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
Syndications	Loans to MSME (mix of Micro and SME)
Straight Senior Loan	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 for the project is access to finance for MSMEs to support economic activity and resilience in the aftermath of the COVID-19 crisis and the ongoing environment of economic instability. Beyond the project outcome, IFC anticipates that the Project will support resilience amongst finance providers demonstrating the viability of lending to MSMEs and crowding in other sources of international and domestic finance in support of these lenders.

IFC will provide BCB with a USD financing that is not readily available in the market, thus alleviating pressure on FX liquidity and mitigating liquidity risks arising from increased demand of loans from borrowers and to grow its MSME portfolio. Furthermore, IFC will mobilize funds from B-lenders. The investment will this help diversify BCB’s funding sources and help the Bank attract larger scale financing.

E&S Category Rationale / Risks and Mitigation

The proposed Project entails a senior loan of up to US$20 million to support lending to MSMEs. The Bank's SME portfolio includes exposure to trade, services, wood, paper and packing, hotels and restaurants, and construction and public works. The Bank's MSME portfolio entails risks that are expected to have potential limited adverse environmental and/or social risks or impacts that are few in number, generally site-specific, largely reversible, and can be readily addressed through mitigation measures (medium risk). The Project will not invest in any coal-related activities or higher-risk 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. As such, the project has been categorized as FI-2 according to IFC's Sustainability Policy. The applicable E&S requirements for the project will be the IFC Exclusion List and host country laws and regulations. The main E&S risks and impacts of the project derive from the E&S risks associated with the Bank's financing activities to MSMEs and its capacity and systems in place to manage these risks. The typical risks of the potential investments may include labor and working conditions, occupational health and safety, and life and fire safety, among others.

BCB Burundi has adopted the Bank of Africa Group E&S management system (ESMS). The ESMS describes the E&S assessment process steps required in the loan review process to identify, assess, manage, and monitor the E&S risks associated with each transaction. The ESMS requires screening transactions against the BOA Group Exclusion List, national E&S laws and regulations, and the IFC Performance Standards (as applicable). The ESMS details the internal process steps for E&S risk management, including categorization, E&S due diligence, inclusion of E&S conditions into loan agreements, and monitoring. The Bank has designated an E&S Officer responsible for ESMS implementation. In addition, BCB Burundi has provided basic E&S training on the E&S risk management procedures to staff implicated in the process. As part of the project, the Bank will need to enhance the ESMS by incorporating the IFC Exclusion List, developing a database of applicable environmental permits and licenses in Burundi and enhancing the E&S monitoring framework for the MSME portfolio. BCB Burundi has human resources policies and procedures which are generally aligned with Performance Standard 2 on Labor and Working Conditions but will need to establish a grievance mechanism for workers.

Contacts

For Inquiries About the Project, Contact

Banque de Credit de Bujumbura
Aline Hategekimana
Corporate Relationship Manager
(257) 22 20 10 24
Aline.Hategekimana@bcb.bi
5, Boulevard Patrice E. Lumumba, B.P: 300, Bujumbura - Burundi
www.bcb.bi

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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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Task Title & Description	Anticipated Completion Date
Enhance ESMS	12/13/2023
E&S risk management training	06/22/2024
Enhance human resources policies	03/22/2024
Formalize life and fire safety protocols	03/22/2024

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