Established in 1998 in Bamako as a privately owned bank, Ecobank Mali (EBM or the bank) is part of one of the largest African financial services group (ETI) covering 20 countries. In an effort to streamline its shareholding and reduce the cross-ownership among its affiliates, ETI repurchased shares in EBM that were held by ETI’s affiliates in Benin, Togo and Burkina Faso in 2006. Therefore, EBM is now owned by its parent company ETI (92.76%) while the balance is split among local businessmen (4.87%), large local companies (2.02%), and Bank staff (0.35%).

EBM is the largest private bank and the fourth largest bank in terms of total assets in Mali and provides corporate finance (wholesale), retail banking, trade finance, money market activities and mortgage lending. Its network consists of 24 branches, including the headquarters at the end of the first quarter of 2008 while its staffing stood at 205 staff at end of 2007.

The IDA-IFC RSF will cover a portfolio of new loans to MSMEs generated by Ecobank Mali of up to $10 million. IDA-IFC will provide a guarantee directly to Ecobank Mali for the XOF equivalent of up to $5 million to cover 50% of all portfolio losses.

6.41 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	6.41
Loan
Equity

* These investment figures are indicative

The loans will be made to MSMEs in Mali.

Consistent with the objective of supporting sustainable private sector development, this RSF contributes to high development impact in two key, high-priority areas:

-Development of the financial sector in Sub-Saharan Africa:

Improving the capacity of banks can lead to increased efficiency and stability in the financial markets. A sound financial sector contributes to the development of the local economy and attracts foreign investment.

- Development of the MSME sector:

The MSME sector makes up a large share of Mali’s economic output and makes several vital contributions, including the creation of jobs and increasing economic activity. Increased access to finance and capacity building for this sector, facilitated by the RSF, can lead to higher levels of entrepreneurial activity, private sector development and improvement in economic output.

Furthermore, the project would support the GoM’s objective of accelerating poverty reduction by contributing to sustainable and equitable economic growth and it will:

- increase MSME access to medium term finance;
- promote the competitiveness of selected industries, including enhancing linkages and know-how transfer between large businesses and MSMEs and working within high potential value chains to alleviate critical bottlenecks identified through careful supply chain analysis.

IFC is expected to play two important roles:

- as an advisor to the GoM on the program design including setting criteria for selecting banks and AS; and
- as an investor providing financial support to the Bank.

IFC brings knowledge of best practices in structuring commercial risk-sharing instruments and will also play a strong role in administering the RSF.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. IFC will analyze the FI portfolio, 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 FI Exclusion List(s) and the applicable National Social and Environmental Laws and regulations. IFC will also review 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 an existing 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 are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.