30598 - Jain NBFC

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Summary of Proposed Investment

Project Number

30598

Company Name

Sustainable Agro-Commercial Finance Limited

Date SPI Disclosed

Apr 28, 2011

Country

India

Industry

Financial Markets

Projected Board Date

Jun 6, 2011

Status

Completed

Sector

Finance Companies

Date Revised SPI Disclosed

May 16, 2011

Department

Regional Industry - FIG Asia & Pac

Environmental Category

Previous Events

Approved : Jun 10, 2011
Signed : Jun 23, 2011
Invested : Aug 22, 2013

Project Description

The proposed project involves an equity investment by IFC in a new Non-Banking Finance Company (NBFC) being set up by the sponsors of Jain Irrigation Systems Limited (JISL) - an existing IFC client – subject to receipt of relevant regulatory approvals. The NBFC will finance the purchase of micro drip irrigation (MIS) and other agri-productivity tools in rural India. The project is intended to create a viable player in the rural financing space with support from an established industrial player that has significant rural presence.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	4.44

Development Impact

1. Increased Access to Finance in Rural Areas: The project shall increase access to finance among smaller farmers who currently have limited access to credit in purchase of agricultural productivity tools. 2. Improved Utilization of Water Resources: MIS and drip irrigation is capital intensive from the point of view of most small farmers. With improved credit access, it is expected that increased number of farmers would install MIS systems which would improve Water Use Efficiency which is a critical consideration as water resources start becoming scarce. 3. Demonstration Effect: The proposed project shall demonstrate a commercially viable financing model for agricultural credit needs in rural India. This project brings together a strong sponsor and management team, institutional shareholders and an existing distribution set-up which improve its chances of creating a strong demonstration effect.

1. Sector Expertise: IFC's presence shall support the company in developing relationships in the financial sector and in establishing appropriate risk management and control systems. 2. Credible Long Term Partnership: IFC's involvement at an early stage shall diversify shareholding and potentially attract other shareholders. This further expands IFC's role with the JISL group as it starts partnering across sectors and across products.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. The Applicable Performance Requirements include The IFC Exclusion List and The applicable National Social and Environmental Laws and regulations. Based on the review and the activities proposed to be supported, the project is required to:

· Develop a Social & Environmental Management System (SEMS), 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
· Demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions and ensure that the HR Policy and Procedures to be developed are consistent with the IFC PS 2 and National Requirements
· Submit a periodic report to IFC as per a format to be provided by IFC

Contacts

For Inquiries About the Project, Contact

Mr. A.V. Ghodgaonkar Jain Irrigation Systems Ltd 7, First Floor, Kumtha Street, Ballard Estate Mumbai – 400 001

For Inquiries and Comments About IFC, Contact

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