Daycoval was founded by the Dayan family which still owns 71% of the capital of the bank and holds 100% of the voting shares, directly controlling the Bank. The remaining 29% of the bank’s capital is publicly traded at Bovespa Stock exchange, since June 2007.

The proposed investment entails: - an up to $30 million-equivalent local currency-indexed note issued by the Bank and subscribed by IFC; - a $70 million B-Loan, which IFC would syndicate to international banks and hedge the resultant USD exposure for the Bank; and - an up to $5 million exposure related to the currency hedge.

35.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management	5.0
Guarantee
Loan	30.0
Equity

* These investment figures are indicative

Daycoval is headquarted in São Paulo, Brazil. The sales teams are distributed trough 21 branches in 13 states, providing coverage for a wide range of small and middle market businesses in Brazil.

Daycoval has expertise in credit operations secured by collateral, particularly involving SME borrowers. The Bank has been presenting a strong growth in its credit portfolio in the last years and is expanding its operations into less developed regions of the country. The project will help the Bank to continue its geographic expansion to regions outside the São Paulo financial hub. The two major development impacts embedded in this project are, making additional credit resources available to the underserved SME segment in less developed regions of the country and helping maintain a competitive environment in the concentrated Brazilian banking sector.

Long-term local currency funding, which will help the bank diversify its funding base and expand its operations in an underserved segment of the market.

During appraisal, IFC will analyze the FI portfolio and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determine the Applicable Requirements, if any, that would include a combination of:
- The IFC FI Exclusion List(s) and/or
- The applicable National Environmental and Social Laws and regulations and/or
- The IFC Performance Standards

IFC will also review, if required, the capacity of the FI to manage environmental and social risks and to establish and maintain a social and environmental management system (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS. Based on the review, the project will be required to:

- Develop an, or upgrade, if necessary, any existing 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 Requirements
- Commit to take action to remedy any gaps in SEMS implementation on an ongoing basis
- Submit a periodic report to IFC as per a format to be provided by IFC