27102 - St. Louis Finances S.A.

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Summary of Proposed Investment

Project Number

27102

Company Name

FIDES MICROFINANCE SENEGAL

Date SPI Disclosed

Feb 12, 2009

Country

Senegal

Industry

Financial Markets

Projected Board Date

Mar 31, 2009

Status

Completed

Sector

Commercial Banking - Microfinance and Small Business

Department

Regional Industry - FIG Africa

Environmental Category

Previous Events

Approved : Jul 17, 2013
Signed : Jun 25, 2010
Invested : Mar 17, 2011

Project Description

The proposed project involves the creation of a rural based microfinance institution, St. Louis Finances S.A., (the “Company”) with headquarters located in the regional capital of northern Senegal, St. Louis. The Company will be the first commercially orientated microfinance institution in Senegal to focus on providing financial services to rural communities. The relatively large number of microfinance institutions operating in Senegal (approx. 800) are based on the cooperative model and serve mainly an urban and semi urban clientele; only 8% of the rural population has access to finance. The Company will establish 8 branches and projects to service up to 30,000 clients by year 5 (“Project”).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	0.0
Loan	7.70
Equity	3.90

Development Impact

As microfinance has been shown to play a major positive role in reducing poverty and unemployment in developing countries, the development impact of the project is expected to be very high. St. Louis Finances will be the first commercially run institution in Senegal to focus on providing microfinance services to the rural population. The region’s economy is characterized by cross border trading between Senegal and Mauretania. Small to medium scale farming (cultivation of rice and vegetables) is a second major activity in the region bordering the Senegal River. Both small scale traders and farmers are currently dependent on refinancing through the informal economy at prohibitive rates. This in turn lowers productivity of the farmers as necessary investments in infrastructure are either deferred or canceled due to lack of financing. The Project will also benefit small scale enterprises located in the rural towns and provide them with refinancing alternatives at more reasonable rates.

IFC’s package of equity and TA funding is unique as few organizations are willing or able to provide this combination of resources to this type of project. With its knowledge and expertise in microfinance greenfielding, IFC brings significant value-added to the proposed project. IFC has participated as founding shareholder in some 25 microfinance banks and has in the process accumulated significant experience. There are few, if any, organizations with the same level of experience in microfinance greenfielding.

IFC has a unique credibility among prospective microfinance investors and local banking authorities. As the operating license for St. Louis Finances is still in the process of being issued, IFC’s credibility among industry players and government authorities could be a crucial factor to facilitate the issuance of the banking license to St. Louis Finances.

The proposed operating policies of St. Louis Finances will incorporate IFC’s social & environmental and anti-money laundering requirements.

This project involves IFC support for the business of microfinance and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Considering the nature of activities supported, the Project will be required to:

- Develop a procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the IFC Microfinance exclusion list;
- Identify qualified persons to manage and implement the procedure;
- Demonstrate commitment and resources to implementing the procedure;
- Submit a periodic report to IFC as per format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

FIDES/ SMH: Konrad Ellsaesser, Managing Director
Route de la Fonderie 2, 1700 Fribourg – Switzerland
Tel : 0041 26 422 34 40

For Inquiries and Comments About IFC, Contact

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IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

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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