The project sponsor, and majority shareholder of BICICI, is BNP Paribas (“BNPP”), a leading French-based banking group with key positions in its three core businesses: Retail banking, Corporate & Investment Banking and Investment Solutions. Listed on the Paris stock exchange, BNPP stock is widely held. The Group is currently rated AA- by Standard & Poor’s, Aa3 by Moody’s and A+ by Fitch. As of December 2011, BNPP’s shareholders’ equity stood at EUR 75.3billion and total assets EUR 1,965 billion. The Group has over 200,000 employees and a presence in 80 countries.

The total size of the Risk Sharing Facility is estimated to be XOF20 billion. Under the proposed terms of the Facility, BICICI would be responsible for generating a portfolio of loans that satisfy certain criteria set by the Bank and IFC. IFC’s participation would involve sharing the risk on up to 50 percent of the Facility.

20.47 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	20.47
Loan
Equity

* These investment figures are indicative

Headquartered in Abidjan, Côte d’Ivoire, BICICI has 27 branches in 9 cities. The SME portfolio covered under the RSF will include loans to SMEs across the country.

This project is expected to have significant development impact by:
(i) Supporting the resumption of lending in CDI and helping spur economic growth through the increase in lending to SMEs;

(ii) Promoting lending to viable SMEs in a post-conflict environment where it has been increasingly difficult to access financing.

With this facility, IFC will help the bank increase its presence in a riskier market segment, while gaining greater comfort in lending to and a better understanding of the SME market. This is an underserved market which is in great need of new funding following the post-election conflict which effectively shut down the country''s banking system. There are few private sector partners like IFC with the requisite experience supporting banks in post-conflict, developing countries like Cote d''Ivoire in growing their SME business segment, and IFC has a unique role to play in this market.

During the appraisal, IFC determined that this Category FI project is considered medium risk based on the potential E&S impacts associated with SME operations in Cote d''Ivoire, which would be targeted under IFC''s proposed risk sharing facility to support the SME sector. However, this project is also considered to carry a reputational risk to IFC given the Bank''s existing exposure to clients active in the cocoa sector with associated labor and forestry risks. Therefore, the key issue in this project is whether the Bank can develop adequate capacity for conducting the necessary E&S risk management of SME clients and to identify clients with exposure to the cocoa sector. The Bank will be required to ensure compliance of the activities financed with the IFC Exclusion List and the national E&S laws and regulations of Cote d''Ivoire. The Bank will also be required to demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions.

Based on IFC''s appraisal of the project, the Bank currently does not have any E&S risk management practices in place including qualified E&S staff and E&S due diligence procedures. The Bank’s current HR policies and practices were found to be largely in compliance with the PS2 requirements. In addition to IFC’s usual E&S requirements for FI investments (designation of qualified E&S staff, development and implementation of an ESMS, and annual E&S reporting) and to mitigate the reputational risk to IFC from the Bank''s exposure to clients in the cocoa sector, the Bank would need to further enhance its capacity to mitigate risks associated with clients in the cocoa sector if these types of clients were to be considered for financing under the proposed project.