24759 - Mibanco III

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Summary of Proposed Investment

Project Number

24759

Company Name

MIBANCO, BANCO DE LA MICROEMPRESA S.A.

Date SPI Disclosed

Apr 25, 2006

Country

Peru

Industry

Financial Markets

Projected Board Date

May 25, 2006

Status

Completed

Sector

Commercial Banking - Microfinance and Small Business

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Jun 26, 2006
Signed : Jun 27, 2006
Invested : Jul 5, 2006

Project Description

The proposed project involves a $29 million loan to Banco de la Microempresa S.A (Mibanco), Peru’s largest specialized microfinance institution. Mibanco offers its 165,000 clients, a majority of which live below the poverty line, a range of financial services, including working capital loans, credit cards, consumer loans, savings accounts, term deposits and checking accounts. Mibanco employs over 1,800 staff, and has a branch network consisting of 65 offices located in Lima and seven other regions of the country. Mibanco’s average loan balance is approximately $1,300 equivalent, and over half of these loans are to women.

The project is expected to:

- diversify Mibanco’s funding base;
- provide it with longer term financing;
- expand its loan portfolio; and
- offer longer maturities to its microenterprise clients.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	29.0
Equity

Development Impact

The development impact of IFC’s financing to Mibanco is expected to be high, as it will support productive microenterprises and employment generation. Sponsors such as Mibanco are good partners for IFC, as they work towards providing much needed financial services to low income households, helping address the widening inequality within the different segments of society, which is driving some of the political changes being witnessed in the LAC region. Given Mibanco’s average loan size of approximately $1,300, IFC’s financing is expected to enable Mibanco to provide about 100,000 loans during the life of the project. The beneficiaries of these loans will be low-income microentrepreneurs, many of them women. For 2006, the institution projects a 48% portfolio growth and a 37% increase in the number of clients; hence, the project will be instrumental in Mibanco achieving these targets.

This is an FI Type 1 project according to IFC''s environmental and social review procedure. As part of a previous investment by IFC, Mibanco committed to establish an environmental management system (EMS) as required by IFC. For the proposed new investment by IFC, Mibanco will be required to confirm that it has established the EMS as required by IFC; that the EMS is functioning as required; and that the EMS will remain in place for the length of the new investment. Mibanco staff currently designated with responsibility for environmental issues will be required to have gone through environmental management training provided or approved by IFC, and Mibanco will be required to provide annual environmental performance reports to IFC for the duration of the new investment.
Location of environmental documents In locally affected community

Contacts

For Inquiries About the Project, Contact

Mibanco
Domingo Orue 165
Surquillo
Lima – Peru

Attention: Ricardo Gordillo
Email: rgordillo@mibanco.com.pe

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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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