25575 - Horus Ghana

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Summary of Proposed Investment

Project Number

25575

Company Name

Advans Ghana Savings and Loans Limited

Date SPI Disclosed

Mar 16, 2007

Country

Ghana

Industry

Financial Markets

Projected Board Date

Apr 16, 2007

Status

Completed

Sector

Commercial Banking - Microfinance and Small Business

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Apr 19, 2007
Signed : Sep 18, 2007
Invested : May 29, 2008

Project Description

The project consists of a senior loan (in local currency, if feasible), an equity investment and a technical assistance grant to Advans Ghana Savings and Loans Limited (or the company) a greenfield microfinance institution (MFI) sponsored by Horus Development Finance, a French consulting firm with recognized expertise in microfinance, and La Fayette Investissement (LFI), its associated investment company. The company will specialize in providing financial services to urban and semi-urban micro and small enterprises as well as low income groups and individuals in Ghana. It is expected that after five years, the company will have eleven branches, a portfolio comprising approx. 16,000 customers, and an outstanding loan portfolio of $14 million. The purpose of the project is to expand crucial financial services to a sector that rarely has access to services offered by formal financial institutions

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.70
Equity	0.52

Development Impact

The project will have a high development impact considering that microfinance has been shown to play a major positive role in reducing poverty and unemployment in developing countries. The initiative will strengthen the provision of microfinance services in Ghana, where access to finance is sporadic for low-income populations and existing MFIs lack breadth and depth, do not focus enough on credit extension, and for their vast majority are unprofitable. By creating a new institution able to sustain microfinance on commercial terms and following best practices, the project has the potential to generate a substantial increase in the long-term availability of financial services for the poor. The project will also show local banks that sound microfinance can be profitable and will demonstrate the commercial merits of transparency, HR and IT investments and strategic planning. As a consequence, it is expected that the interest of local banks in the microenterprise and SME sector will be strengthened.

This is a Category FI Type 1 project according to IFC''s environmental and social review procedure. The company must establish and maintain an Environment and Social Management System (ESMS) to the satisfaction of IFC, to ensure that it does not make investments in areas that are on IFC’s Microfinance Exclusion list. The company must designate appropriate individuals who will have responsibility for the implementation of the ESMS. The company must submit annual environmental performance reports to IFC, as per an IFC format.

Contacts

For Inquiries About the Project, Contact

Claude Falgon, Director & Manager
La Fayette Investissement SA
69, Route d’Esch, L 1470, Luxembourg
Telephone: +33 1 53 32 75 71
Fax: +33 1 53 32 75 76
E-mail: cfalgon@horus-groupe.com

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. 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 Policy on Disclosure of Information that went into effect April 30, 2006.

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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