49233 - CDel IMON-FY24

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Summary of Investment Information

Project Number

49233

Company Name

CJSC Bank Imon International

Date SPI Disclosed

Jun 7, 2024

Country

Tajikistan

Region

Central Asia and Turkiye

Projected Board Date

Jul 8, 2024

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Jul 20, 2024

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Jun 24, 2024
Signed : Jun 26, 2024
Invested : Jul 17, 2024

Sector

Microfinance and Small Business - Non Commercial Banking

Additional Project Attributes

Blended Finance

Project Description

The proposed project is a three-year Tajik Somoni (TJS or LCY) denominated loan from IFC’s own account of up to US$5 million to the Closed Joint Stock Company Microcredit Deposit-Taking Organization “IMON International” (IMON or the Company), the largest microfinance institution (MFI) and the fourth largest financial institution in Tajikistan, an IDA country, to support its lending program to micro and small enterprises (MSE) in underserved segments and regions. (The Project). At least 50% will be allocated to MSEs operating in the agriculture sector of Tajikistan, including small holder farmers, up to 40% for housing microfinance projects and the remaining proceeds will be used to finance MSEs, including women led MSEs. As part of the BOP Program, the Project will use IDA PSW’s Local Currency Facility (“LCF”) to source local currency, as well as the Pooled First Loss Guarantee (“PFLG”) from IDA PSW’s Blended Finance Facility (“BFF”).

Associated Advisory Engagement

The IFC's advisory team has signed an Engagement Letter with the client to provide technical assistance for improving financial risk, capital, and profitability management frameworks. The project has been initiated with the goal of helping the client comply with new regulatory requirements on risk management and meet the conditions for obtaining a banking license in the near future.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	9.0
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)
Straight Senior Loan	Loans to MSME (mix of Micro and SME)

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

Development Impact

IFC’s expected additionality in the Project is both financial and non-financial. Financial additionality will be in the form of financing structure as IFC provides a 3-year local currency financing, with a one- year grace period, which is not readily available in the market at reasonable terms. This financing is particularly critical in the context of tightened financial conditions, high currency volatility and elevated geopolitical strains. Non-financial additionality will take the form of knowledge, innovation and capacity building derived from IFC’s complementary advisory program to help Imon expand its microfinance housing product.

E&S Category Rationale / Risks and Mitigation

The project is a straight senior loan to IMON, a microfinance organization in Tajikistan and an existing IFC client The proceeds of the loan will be used to support energy-efficient housing microfinance projects and to on-lend to MSEs, including those operating in agri sector. The MSE portfolio is invested in services, trade, agriculture and animal husbandry, small-scale manufacturing, construction, mortgages, consumer loans. The client does not have solar projects in portfolio. The Project will not support Exclusion List activities and/or borrowers involved in coal related and higher-risk business activities that may include: (i) involuntary resettlement, (ii) risk of adverse impacts on indigenous peoples, (iii) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or (iv) significant occupational health and safety risks. Thus, the environmental and social (E&S) risks of the company’s portfolio are low and carry minimal or no adverse environmental and social impacts. The project has therefore been categorized as FI-3 in accordance with the IFC’s Sustainability Policy. The main E&S risks and impacts of this investment relate to IMON having adequate systems and capacity in place to manage E&S risks in micro- and small loans portfolio in line with IFC’s applicable E&S requirements. The project requirements are the IFC's Exclusion List, and E&S Laws and Regulations of Tajikistan. Additionally, IMON will be required to maintain alignment with life and fire safety requirements, and the requirements of the IFC’s Performance Standard 2 on Labor and Working Conditions. As an existing client, IMON operates an Environmental and Social Management System (ESMS), which is sufficient to cover E&S risks associated with the transaction. The ESMS is applicable to the company's entire portfolio and mandates assessing portfolio's alignment with the Exclusion List, national E&S and OHS requirements, and any potential E&S risks; the ESMS staff is appointed. HR policies are in accordance with Performance Standard 2 requirements and the company follows the applicable Life and Fire Safety requirements.

Contacts

For Inquiries About the Project, Contact

Closed Joint Stock Company Microcredit Deposit-Taking Organization “IMON International
Iso Abdusamiev
Head of Investor Relations Unit
+992927127444
iabdusamiev@imon.tj
17 Microdistrict, building 2, Khujand, Tajikistan
www.imon.tj

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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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