Alios Finance, incorporated in France, has subsidiaries in Cameroon, Gabon, Zambia, and Cote d’Ivoire, and branches in Senegal, Mali, and Burkina Faso, which provide companies with vehicle leasing, long-term equipment rental, investment loans, and consumer finance services. The group began in 1956 in Senegal as a single vehicle finance company SAFCA (Société Africaine de Crédit Automobile), established by Renault, Unilever, OPTORG, CFAO and SCOA. In 1998, a holding company was formed to hold the interests of the main shareholders in the subsidiaries, and a new group of financial sector and development institution shareholders entered the holding company. Today, Alios Finance’s ownership includes the following main shareholders, a blend of automotive and equipment distributors, financial sector institutions, and development finance institutions: CFAO (24%), AfricInvest (23%), FMO (18%), FinnFund (14%), OPTORG (12%), Tunisie Leasing (5%), Africa Financial Holdings (2%), and Gras Savoye (2%).

IFC’s investment will consist of a financing package with the following components for IFC’s own account: i.) a senior loan of up to $ 4 million available in USD or TZS to Alios Finance Tanzania, ii.) an investment of up to $400,000 in common shares (equity) of Alios Finance Tanzania, iii.) a senior loan of up to $ 5 million available in USD or KES to Alios Finance Kenya, and iv.) an investment of up to $800,000 in common shares (equity) of Alios Finance Kenya.

9.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	9.0
Equity

* These investment figures are indicative

The main offices of the two Alios Finance greenfield subsidiaries supported by the project will be located in Dar es Salaam, Tanzania and Nairobi, Kenya.

By supporting the expansion of this strong vehicle and equipment leasing, long-term rental, and consumer finance company into new markets such as the Tanzania and Kenya, IFC will improve access to financing for SMEs and job-producing companies in both countries. Participating in this expansion will enable IFC to add value to the project, based on its presence in the new markets, and its leasing experience in advisory services, legislative advisory services, and financial services in the region. The project is expected to have a strong development impact in the following areas: i.) Enhance Alios Finance’s ability to deepen access to financial services for SMEs in Kenya and Tanzania; ii.) Increase Alios Finance’s access to local currency financing; and; iii.) Subject to diagnostic work, strengthen the business environment for leasing in the region.

IFC is well-regarded for its value addition in the leasing sector, particularly for its technical assistance activities and its role as a catalyst for leasing companies. IFC has often been the first investor in a leasing company in a given market, and its investments have been followed by growth of the leasing market as a whole, not only for its investee clients. With respect to the proposed project with Alios Finance, IFC is uniquely positioned to provide both access to long-term financing as well as institution-building and leasing market expertise.

This project involves IFC support for the leasing business and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC analyzed the FI portfolio for types of transactions, size, tenor and industry sectors and determined as Applicable Performance Requirements based on an analysis of the potential social and environmental risks associated with the FI portfolio and considering IFC’s investment the IFC Exclusion list and the applicable national laws and regulations. IFC also reviewed the FI’s existing social and environmental due diligence procedures, and capacity to implement the same, and appraised the company’s labor practices. Alios Finance has an S&E policy for screening against the Exclusion List, which needs to be upgraded to comply with IFC’s policy requirements, and each subsidiary has a designated S&E Champion. Based on the review the client will be required (i) to develop a Social and Environmental Management System (SEMS), that is satisfactory to IFC, and that ensures that all its activities are screened and processed to avoid supporting activities on the FI Exclusion List, and ensures that the use of the leased equipment complies with the applicable national S&E laws, prior to disbursement; (ii) Demonstrate commitment and resources to implementing the SEMS; (iii) When leasing to business activities with potentially significant environmental and social risks inquire and review S&E information available in the public domain and avoid leasing to businesses that have substantial unresolved environmental and social issues. In such cases, the Company will also need to satisfy itself that the activity is being undertaken in compliance with the applicable national laws; (iv) Develop a HR Manual, including a sexual harassment policy and grievance mechanism, and demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions; and (v) Submit a periodic report as per a format to be provided by IFC.