49009 - Thai Credit Bank Equity

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Summary of Investment Information

Project Number

49009

Company Name

Thai Credit Bank Public Company Limited

Date SPI Disclosed

Feb 12, 2024

Country

Thailand

Region

East Asia and the Pacific

Projected Board Date

Dec 15, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Feb 12, 2024

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Jan 16, 2024
Signed : Jan 18, 2024
Invested : Feb 7, 2024

Sector

Commercial Banking - Consumer Finance

Project Description

The proposed project entails IFC’s equity investment of up to US$30 million equivalent in Thai baht as a cornerstone investor in an Initial Public Offering (IPO) of Thai Credit Bank Public Company Limited (“TCB” or “the “Bank) (“The Project”). The Bank is the only Thai bank that focuses on underserved segment in Thailand. The Bank targets the micro and SMEs which represent 34.6% of Thai 2021 GDP and 71.9% of total workforce. Total equity stake to be offered at the IPO will be up to 28.2% stake post IPO, including 5.2% new shares and 23.0% secondary shares. The Project will be a continuation of IFC’s systematic efforts to promote financial inclusion in Thailand and signal confidence in TCB’s inclusive business model. IFC’s cornerstone participation in the IPO is expected to crowd in other investors to further support the Bank’s strategy focusing on MSMEs, digitalization and sustainable finance.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	30.0

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	Loans to MSME (mix of Micro and SME)

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

Development Impact

IFC expects the Project will provide equity to TCB to complement a previous project (Project #47422) with the Bank, where IFC granted a senior loan, in supporting increased access to finance to underserved MSMEs, including WMSMEs. IFC’s systematic social-themed financing will contribute to catalyzing the market by promoting deeper competitiveness in the MSME finance market by demonstrating the viability of a differentiated MSME strategy and stimulating other players to replicate.

E&S Category Rationale / Risks and Mitigation

The project entails an IFC equity investment in TCB. While TCB is a commercial bank providing financial services to individuals, micro, small and medium enterprise ('MSME') and corporate customers, the vast majority of TCB's loans are retail and MSME financing. Its exposure to the few corporate clients is generally in the sectors of hotel and apartment, manufacturing, trade and financial services, and is anticipated to remain very limited. The Bank's MSME portfolio is mainly in wholesale and retail, real estate, construction, and services. Overall E&S risks and impacts of the project is medium and, therefore, the project has been categorized as FI-2 in accordance with IFC's Sustainability Policy. The project will not support coal-related projects. There is a very low likelihood that the bank will support higher risk business activities that may involve (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, and cultural heritage, or (d) significant Occupational Health and Safety risks. For this project, the applicable performance requirements will include the IFC Exclusion List and relevant national E&S laws and regulations. In very rare cases when sub-borrowers are exposed to activities associated with significant risks and impacts, TCB will apply IFC's Performance Standards (PSs). The bank’s current exposure to coal-related sub-projects is zero. In accordance with the Green Equity Approach TCB has committed to keep its exposure to coal related sub-projects at this level during the time of IFC equity investment. The key E&S risks and impacts of the project derive from the bank's capacity to identify and manage the potential E&S risks associated with its lending activities. The typical risks and impacts may include site-specific occupational health & safety, labour and working conditions and waste management. Although the likelihood of category A sub-projects is very limited, TCB will disclose information on such sub-projects if any are financed by the bank. The bank will disclose a summary of its updated ESMS on its website.

Thai Credit Retail Bank has established an environmental and social management system (ESMS) in compliance with the requirements of IFC's senior loan project. The ESMS incudes a set of standard procedures that cover E&S screening against the Exclusion List, verification of E&S legal compliance, E&S approval, and portfolio monitoring and reporting. Additionally, the ESMS incorporates E&S roles and responsibilities, as well as implementation tools and guidelines. Thai Credit Retail Bank has implemented the ESMS since 2023 for its micro, small, and medium enterprise lending activities supported by IFC's senior loan.

S.no	Title	Anticipated Completion Date	Status
1	ESMS Implementation Review	05/07/2024	In Progress
2	Upgrade ESMS	02/07/2024	Completed

Contacts

For Inquiries About the Project, Contact

The Thai Credit Bank PCL
Mr. Roy Agustinus Gunara
Managing Director
+66 95 527 0999
roy.a@tcrbank.com
10th Floor, RS Tower, Bangkok, Thailand
Thaicreditbank.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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