22118 - Factorline

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Summary of Proposed Investment

Project Number

22118

Company Name

Tanner Servicios Financieros S.A.

Date SPI Disclosed

Mar 2, 2005

Country

Chile

Industry

Financial Markets

Projected Board Date

Apr 4, 2005

Status

Completed

Sector

Commercial Banking - Microfinance and Small Business

Department

Global Industry, Financial Markets

Environmental Category

C - No Impact

Previous Events

Approved : May 27, 2005
Signed : Jun 27, 2005
Invested : Jul 29, 2005

Project Description

The project consists of a loan of up to $5 million to Factorline S.A. (Factorline or the company), one of the leading factoring companies in Chile. Factorline was founded in 1993 and it is the fifth factoring company in Chile by volume of overall factoring operations and the largest factoring company in Chile by volume of international factoring. Through its factoring operations, the company provides key financing to over 1,600 medium and small enterprises in Chile, enabling them to grow their sales, revenues and employment.

The purpose of this investment is to enable Factorline to diversify its funding with a longer term and more stable funding source, and to support the growth of Factorline’s international factoring operations.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
Equity

Development Impact

The development impact of IFC’s loan to Factorline is expected to be significant in terms of its support for productive small businesses and its stimulus for growth and employment generation. Given the limited interest among traditional Chilean banks in serving small businesses, smaller niche players like Factorline fill an important role in the Chilean market. These niche players often find themselves constrained in their funding, because some of them are not deposit-taking institutions and because potential lenders are avoiding the small business sector.

IFC financing will address these issues. The financing will allow Factorline to continue to expand its factoring program while counting on a significant and stable US$ denominated credit line. Apart from providing predictability and diversity in the funding of Factorline, IFC’s financing will also facilitate the company’s foreign exchange and asset-liability management. Finally, IFC financing will also provide a level of credibility that Factorline can leverage with institutional creditors to obtain better terms in the local capital markets.

Contacts

For Inquiries About the Project, Contact

Julio Nielsen
Manager of International Business
E-mail: jnielsen@factorline.cl

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

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