Grupo ASSA holds 55.2% of the total outstanding common shares. Grupo ASSA is a widely held and publicly owned company quoted on the Panamanian stock exchange. As of December 31, 2006, the Group reported revenues of $111.4 million, net income of $17.9 million and shareholders equity of $270.5 million. The Instituto de Previsión Social Militar is the second largest shareholder and holds 25% of the total common shares outstanding through a number of holding companies (Colony International Business, Caprix International Inc., Periples Corp., and Interim Investments Inc.) The Fund is one of Nicaragua’s most prominent institutional investors, with investments across different sectors. Banco de Finanzas Internacional was established in 1997 under an international banking license (which limits its charter to operation outside Panama). BdF Internacional subsidiaries are Invercen Panama and Delosa, both of these companies are dedicated to the development and promotion of housing projects in Nicaragua.

The project consists of a: - a $15 million senior secured loan BdF to support the expansion of the middle to low income mortgage market in Nicaragua, a frontier country by IFC’s definition; - a MSME loan of up to $5 million; - a traded line of $3 million.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

The Bank is headquartered in Managua and operates 35 branches in Nicaragua with an affiliate in Panama.

The project is expected to have a strong developmental impact in the following areas: - it will support BdF’s growth plans on the housing finance business by increasing the Bank’s penetration in the middle-income segment; - it will improve the financial fundamentals of the Bank by reducing its maturity mismatch and diversifying its funding sources; - it will support the market leadership of a local bank; - it will provide technical assistance in the areas of product development and best practices in mortgage lending; - it will expand the Bank’s trade operations to a wider array of companies; - it will enhance BdF’s ability to support the micro and SME segments.

In this project, IFC will play a key role by: - Providing support to local niche players in Central America. - Providing long-term funding to viable players for housing finance and to support longer-term on-lending without incurring asset-liability mismatches. - Supporting the expansion of the primary mortgage market in Nicaragua through the roll-out of a capacity building and product development support technical assistance program. - Helping diversify BdF’s income stream by increasing trade and MSME financing.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC analyzed the FI portfolio and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determined the Applicable Performance Requirements based on an analysis of the potential Social and Environmental risks associated with the FI portfolio and considering the nature of IFC’s investment. The Applicable Performance Requirements are:

- The IFC FI Exclusion List; and
- The applicable National Social and Environmental Laws and regulations.

Based on the Applicable Performance Requirements and FI SEMS and capacity review, the project will be required to:

- develop a Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC;
- identify responsible, qualified persons to manage and implement the SEMS;
- commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements;
- submit a periodic report to IFC as per a format to be provided by IFC.