48533 - BONCFC Equity

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Summary of Investment Information

Project Number

48533

Company Name

BON BNPP Consumer Finance Co., Ltd

Date SPI Disclosed

Apr 16, 2024

Country

China

Region

East Asia and the Pacific

Projected Board Date

May 24, 2024

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Aug 4, 2024

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Jun 7, 2024
Signed : Jun 25, 2024
Invested : Aug 2, 2024

Sector

Finance Companies - Consumer Finance

Project Description

BON BNPP Consumer Finance Co., Ltd (BONCFC, or the Company) is a consumer finance company in China that is visioned to provide affordable consumer loans to underserved customers across the country.

IFC is considering investing up to US$40 million through a subscription of common shares to be issued by BONCFC (the “Project”). The investment aims to tackle climate change challenges at individual level through financial support for green consumption and sustainable consumer behaviours.

Associated Advisory Engagement

IFC and BONCFC are contemplating an advisory services engagement, which aims to develop a practical example in sustainability for the consumer finance sector. IFC will support BONCFC in developing evaluation framework and the implementation guideline for sustainable consumer finance, enhancing the company's capacity in sustainable operations and business development.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	40.0

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	Consumer Loans

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

Development Impact

The most significant expected Project-level outcome is increased access to climate finance for consumers, especially for middle to low-income customers in China. Beyond the Project-level outcomes, the contribution to market creation is that IFC anticipates that the Project will promote greater sustainability in the climate finance market through demonstration and replication channel.

IFC’s additionality in the proposed investment is both financial and non-financial and will be provided through (i) IFC’s own account equity; (ii) standard setting; and (iii) knowledge sharing, innovation, and capacity building. IFC’s advisory and upstream engagement will support the Company to develop a sustainable consumer finance framework and standards, and an environmental impact calculation methodology.

E&S Category Rationale / Risks and Mitigation

The project is an equity investment in BON BNPP Consumer Finance Co., Ltd (BONCFC), a consumer finance company in China providing lending to individuals. The project is expected to have low E&S risks and therefore is categorized as an FI-3 project in accordance with IFC's Environmental and Social Sustainability Policy. The project will not support any coal related projects or higher-risk transactions that involve: (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; (d) risk of significant retrenchment; or (e) significant occupational health and safety risks. IFC's applicable E&S performance requirements for the project will be the IFC Exclusion List and relevant national E&S laws and regulations. BONCFC will be also required to comply with the Performance Standard 2 on labor and working conditions for its own HR practices. As part of the project, BONCFC will be required to establish a simple E&S management system to manage its lending activities in case of supporting sole proprietors in accordance with the E&S performance requirements. It will also strengthen its human resource management through formalizing its non-discrimination and equal opportunity and anti-harassment policies to fully align with the Performance Standard 2 requirements. In addition, the client will be required to enhance fire procedures for its branch operations.

Contacts

For Inquiries About the Project, Contact

BON BNPP Consumer Finance Co., Ltd
Dongchen Yang
Assistant to the Board of Directors
0086-25-86360197
5011221@boncfc.com
No. 588, Changbai Street, Qinhuai District, Nanjing City, Jiangsu Province, China
www.boncfc.com

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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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