Agrofinanzas was created in April 2005 by the shareholders of Agroindustrias Unidas de Mexico SA de CV (AMSA). Agrofinanzas, a specialized financial intermediary, started by providing financing to AMSA’s suppliers of cocoa, coffee, cotton and grain throughout Mexico, thereby separating suppliers’ financing from AMSA’s core trading operations. In order to scale up Agrofinanzas, AMSA’s shareholders partnered with Société Générale in 2006.

AgroFinanzas´ shareholding today is shared equally between a Société Générale Group company and individual investors who are also the shareholders of AMSA and ECOM. ECOM was established in 1849 as a cotton trader in Spain, and expanded later into other agribusiness commodities. Today, ECOM and its subsidiaries operate in 30 countries, including Latin America, Africa, Asia, the United States and Europe. Société Générale is one of the largest banking groups in Europe.

Total project cost and IFC’s investment is approximately $10 million, and may be made in US Dollars or in Mexican Peso.

11.14 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	9.14
Equity	2.0

* These investment figures are indicative

Agrofinanzas is headquartered in Mexico City, Mexico. The loan proceeds will be distributed throughout the country.

The project supports rural development and access to finance for Mexico’s Agri-SMEs, which are traditionally underserved by the financial sector. The monitorable indicators of the development impact of the project will be:

- the number and amount of loans and clients reached;
- the company’s portfolio sectorial and geographical diversification,
- the company’s market share amongst specialized agribusiness financial intermediaries, and
- the company’s ability to diversify its funding.

IFC is supporting the agribusiness Sofoles sector to promote access to finance in rural areas in Mexico. This is a young institution that needs to expand its scope and will serve rural customers that currently do not have consistent access to commercial banks financing. IFC’s involvement through the project will be the company’s first step to diversify its funding and will provide credibility in the market for its future financial needs. IFC’s financial support will lead to the strengthening of an agribusiness SME finance institution, which should result in increased market penetration and better access to finance for agribusiness in Mexico.

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

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 Performance Requirements, if any, that would include a combination of the IFC Exclusion List; the applicable National Social and Environmental Laws and regulations; and the IFC Performance Standards.

IFC will also review, if required, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & 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 or upgrade, as 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 Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.