Mercantile is a wholly owned subsidiary of Mercantile Bank Holdings Limited (“MBHL”), a registered bank controlling company and investment holding company. MBHL’s shareholders are Caixa Geral de Depósitos S.A. (“CGD”) (91.75 %), a company registered in Portugal; Public (7.91%) and Employees, Trustees of share incentive schemes (0.34%). MBHL also owns Mercantile Insurance Brokers (Proprietary) Limited, a company that offers life insurance and short-term broking services to the Group (MBHL and the subsidiaries) and external parties through third party agreements. MBHL’s ordinary shares have been listed on Johannesburg Stock Exchange (JSE) since 1998. Mercantile’s headquarters is in Sandton, Johannesburg. The Bank has a selected branch network across South Africa.

The proposed project is a senior loan of up to up EUR 50 M equivalent. EUR 48.4 million is for IFC’s own account and EUR 1.6 million will be financed by the Clean Technology Fund (“CTF”)."

69.87 million (USD)

Product Line	IFC Investment (million USD)
Risk Management	0.16
Guarantee
Loan	69.71
Equity

* These investment figures are indicative

The proposed IFC investment will support the expansion of the SME /Mid Market clients lending and promote development of sustainability businesses. The Bank will provide long term funding to Mid Market and SMEs clients for projects that result in environmental benefits and GHG emission reduction, throughout South Africa. Mercantile’s headquarters is in Sandton, Johannesburg. The Bank has a selected branch network across South Africa.

IFC's investment in Mercantile is expected to yield the following key developmental impact: (i) Development of SMEs / Mid Market clients in South Africa, through increased access/reach of financial services; (ii) Promote the development of sustainability business through providing long term financing to projects that result in environmental benefits; and (iii) Assist Mercantile to manage asset/liability mismatch by providing long term local currency funding

(i) Help promote the development of the SME sector in South Africa by providing scarce long-term funding and increase access to finance to SMEs; and (ii) IFC is enforcing its important role of establishing and demonstrating the viability of sustainability-related financing to South African banks. This makes it likely that other financial institutions will pursue similar types of sustainability-related projects.

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 for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, which will likely include the IFC Exclusion List, the applicable National Social and Environmental laws and regulations, and the IFC Performance Standards. IFC will also appraise the FI’s labor practices according to the IFC’s Performance Standards 2: Labor and Working Conditions and review the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS).

The project will be required to: (i) Provide a Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC, (ii) Identify responsible, qualified persons to manage and implement the SEMS, (iii) Commit to implement the SEMS, to ensure that financing provided is in compliance with the Applicable Performance Requirements, (iv) Maintain the Bank’s current labor standards which are in line with the IFC Performance Standard 2: Labor and Working Conditions and (v) Submit a periodic report to IFC as per a format to be provided by IFC.