TFG, an IFC partner since 1999, is a Mongolia-based financial holding company with operations in banking, financial leasing and insurance. TFG is the sole owner of XacBank, Mongolia’s 4th largest bank and the country’s leading microfinance lender. Currently IFC has a 13.5% stake in TFG. Xinjiang SME Center is a public service unit (“PSU”) registered under the local economic and information technology commission. The Center hosts the Xinjiang SME Association and operates a venture capital company, a HR company and an IT company. All these cater to small and medium sized businesses.

The registered capital of the Company is RMB60 million. IFC will contribute to about 10% of equity for RMB6 million (US$1 million).

1.59 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	1.59

* These investment figures are indicative

The Company will be registered in Urumqi and its business will be primarily operated in the city and its rural areas.

(i) expand access to finance to MSEs in one of China's most remote and poorest provinces; (ii) assist in the creation of jobs and promotion of entrepreneurship through MSEs; and (iii) support a South-South investment and the expansion of a key IFC strategic partner that seeks to be a leading microfinance institution across the region.

(i) unique position to introduce an internationally recognized MFI and existing IFC investee to a frontier market of China; (ii) substantial institutional experience in investing in China's rural banking and microfinance sectors; (iii) TA package to help build the MCC's initial internal capacity; and (iv) reputation to enhance the MCC and TFG's success.

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, if any, that would include a combination of: the IFC FI Exclusion List, the applicable National Social and Environmental Laws and regulations and/or 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, 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 an, or upgrade, if necessary, any 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 financing activities are in compliance with the Applicable Performance Requirements
Demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions
Submit a periodic report to IFC as per a format to be provided by IFC