30905 - Progresemos III

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Summary of Proposed Investment

Project Number

30905

Company Name

FINANCIAMIENTO PROGRESEMOS SA DE CV SOFOM ENR

Date SPI Disclosed

Oct 27, 2011

Country

Mexico

Industry

Financial Markets

Projected Board Date

Nov 30, 2011

Status

Completed

Sector

Microfinance and Small Business - Non Commercial Banking

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Jan 5, 2012
Signed : Jan 16, 2012
Invested : Feb 23, 2012

Project Description

Progresemos III (the “Project”) will extend a Mexican peso (MXN) line of credit to support the microfinance loan portfolio growth and an equity investment in Financiamiento Progresemos, S.A. de C.V., SOFOM, ENR (“Progresemos” or the “Company”). The Project will reach women micro-entrepreneurs in frontier regions and will (i) enhance micro lending competitiveness of the private sector; (ii) help deepening the financial sector since a high portion of the sub-borrowers served are outside the formal financial sector; and (iii) encourage a sustainable social and environmental development.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	2.51
Equity	1.79

Development Impact

The development impact of IFC''s financing to Progresemos is expected to be high:
(i) Increase Access to Finance: Progresemos provides financial services to low income segments of the Mexican population living in rural areas with limited or null credit opportunities. Moreover it will contribute to build up a credit culture amongst this low-income population; and
(ii) Greater Commitment to Creating Opportunities to Disadvantage Groups: This project will support productive low-income micro entrepreneurs which consequently will positively impact employment and income generation in the frontier regions where Progresemos operates.

(i) Long-term Funding to Support Scale-up of Business Model: The Company has limited access to commercial sources of funds. IFC would provide not only the funding to fuel the Company''s growth but also a stamp of approval that would allow them to access other sources of funds;
(ii) Knowledge Sharing: Through this project IFC will continue to bring and share its global and local microfinance expertise with the Company; and
(iii) Strong Developmental Impact: IFC''s investment would assist the Company to reach micro-entrepreneurs in frontier regions and help deepening the financial sector since a high portion of the sub-borrowers served are outside the formal financial sector. Rural development is key to Mexico''s management of population migration into ever-growing cities and abroad.

As an existing IFC client, Progresemos, a non-bank multi-purpose financial institution specialized in microfinance, has developed an Environmental and Social Management System (SEMS) to comply with the IFC Exclusion List and has generally satisfactory labor practices. Under this Category FI project, Progresemos will be required to: (i) maintain and/or upgrade an Social & Environmental Management System (SEMS) to ensure that all of its activities are in compliance with Applicable Requirements, which will likely be the IFC FI Exclusion List; (ii) maintain responsible, qualified persons to implement the SEMS; (iii) apply the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions; and (iv) submit an annual E&S report to IFC as per a format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Roberto Flores Athie, COO
Miguel Laurent 15-Bis, Desp. 103
Col. Del Valle
C.P. 03100, Mexico D.F.
Mexico
Telephone: +52(55)55752009

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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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