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| CGCCD |
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| Summary of Proposed Investment |
| 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. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 27377 |
| Company name | Chengdu Small Enterprise Credit Guarantee Co., Ltd |
| Country | China |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | June 4, 2008 |
| Projected board date | July 17, 2008 |
| Previous Events | Invested: June 2, 2009
Signed: October 30, 2008
Approved: July 31, 2008 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Chengdu Small Enterprise Credit Guarantee Company Limited (Chengdu CGC) was established in 2001 with a mandate of helping SMEs access finance. Chengdu CGC was initially funded by Chengdu municipal government and UK government through a donation. The State Secretariat for Economic Affairs of Switzerland (SECO) took an equity stake in Chengdu CGC in 2004. The IFC has been providing technical assistance and other training programs to Chengdu CGC since 2002.
CGC’s main business is to provide partial guarantee on loans extended by local banks to SMEs in Chengdu metropolitan area. Its target clients are those who otherwise meet banks’ lending criteria but are unable to provide sufficient collateral as normally required by local banks. Over the past six years, CGC has provided loan guarantees amounting to RMB6.2 billion ($887 million), creating or maintaining employments for at least 60,000 people. At present, the company has about 780 SME clients and more than 1000 individual clients (e.g., unincorporated small businesses).
The purpose of the project is to help SMEs in the greater Chengdu metropolitan area get much needed financing to restore and/or expand their production and operation capacity in the aftermath of recent earthquake in Sichuan Province, China. Three satellite cities in Chengdu metropolitan area, Dujiangyan, Pengzhou and Chongzhou, were among the hardest hit cities by the earthquake. |
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| Project sponsor and major shareholders of project company |
Chengdu CGC is currently 88% owned by Chengdu Municipal Government through two wholly-owned SOEs, Chengdu Industry Investment Group Co., Ltd (Chengdu IIG) and Chengdu SME Credit Guarantee Company Limited (Chengdu SMEG). SECO owns the remaining 12%.
SECO is a Swiss government agency for economic development co-operation. It was founded in 1999 by combining the offices for External and Internal Economic Affairs and is the centre of competency for economic policy of the Swiss Federal Department of Economic Affairs. |
| Total project cost and amount and nature of IFC's investment |
| It is proposed that IFC make an up to $15 million equity investment in Chengdu CGC, and provide an up to $15 million risk sharing facility. |
| Location of project and description of site |
| Chengdu CGC is headquartered in Chengdu, capital city of Sichuan Province, China. It currently does not have other branches. However, its business covers the greater Chengdu metropolitan area, which includes several hardest hit cities by the recent earthquake, such as Dujiangyan, Pengzhou and Chongzhou. |
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| Anticipated development impact of the project |
| The project will form a part of outpouring of international support to the earthquake hit Sichuan Province. It is expected to be one of the first commercial-based initiatives focusing on restoring private sector capacity, with most beneficiaries being SMEs. |
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| IFC's expected development contribution |
| In addition to equity investment, IFC will introduce a risk-sharing program to Chengdu CGC to help diversify its business risk. IFC will also provide technical assistance to Chengdu CGC to help improve its institutional capability. |
| Environmental and social issues - Category FI |
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 and the activities proposed to be supported with IFC financing] 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 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 investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Ms. Zhou Jing
7/F, Shuncheng Building
No. 229, Shuncheng Street
Chengdu 610016, China
Telephone: 86-28-86781533
Fax: 86-28-86786233
E-mail: zhoujing@cgccd.com
Website: http://www.cgccd.com |
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| 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: 202-974-4384
E Mail: Webmaster |
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