23880 - FINDESA

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Summary of Proposed Investment

Project Number

23880

Company Name

Banco del Exito S.A.

Date SPI Disclosed

Mar 16, 2006

Country

Nicaragua

Industry

Financial Markets

Projected Board Date

May 12, 2006

Status

Completed

Sector

Commercial Banking - Microfinance and Small Business

Department

Regional Industry FIG LAC & EUR

Environmental Category

Previous Events

Approved : May 11, 2006
Signed : Jul 11, 2006
Invested : Sep 11, 2006

Project Description

The project involves the extension of a senior loan of up to US$3.0 million and a convertible equity investment of $2.0 million in preferred shares of FINDESA, one of Central America's leading regulated microfinance institutions. The purpose of the investment is to: - support FINDESA's transformation to a bank, while scaling up its micro and small enterprise (MSE) loan portfolio in preparation for regional expansion. The purpose of the investment would be to support FINDESA's continued loan portfolio growth in Nicaragua.

Sponsor / Cost / Location

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

Development Impact

The developmental impact of FINDESA is expected to be very strong and far reaching in terms of its economic support for productive micro enterprises, stimulus for employment generation and confidence building for the financial sector. Microfinance in Nicaragua and throughout Central America is in its infancy and there is ample opportunity for portfolio growth. In Nicaragua, there are about 200,000 small and microentrepreneurs operating in sectors that represent a significant percentage of the Nicaragua’s GDP. This project is expected to reach an estimated 3000 new small businesses and microentrepreneurs during the tenor of the credit line through FINDESA’s 12 branch offices located throughout the country. The FINDESA project clearly fits IFC’s strategy because of its contribution to GDP growth and its employment creation in the agriculture and industry sectors.

This is a Category FI Type 1 project according to IFC''s environmental and social review procedure. The project must establish and maintain an Environment and Social Management System (ESMS) to the satisfaction of IFC, to ensure that its projects are in compliance with host country environmental, health and safety requirements and it does not make investments in areas that are on IFC’s Microfinance exclusion list. The project must designate appropriate individuals who will have responsibility for the implementation of the ESMS. The project must submit annual environmental performance reports to IFC, as per an IFC format to be provided.
Location of environmental documents in locally affected community

Contacts

For Inquiries About the Project, Contact

Gabriel Solorzano, President Busto José Martí 100 mts Oe. 150 mts N Fax (505) 222-6623

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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