|
|  |
| CFPA Microfinance Institution |
|
| 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 | 28702 |
| Company name | CFPA Microfinance Management Co. |
| Country |
|
| Sector | Microfinance and Small Business - Non Commercial Banking |
| Environmental category | FI |
| Department | Reg Ind, Financial Markets, ASIA |
| Status | Active |
|
| Date SPI disclosed | November 19, 2009 |
| Projected board date | December 21, 2009 |
| Previous Events | Invested: December 23, 2010
Signed: June 11, 2010
Approved: June 9, 2010 |
|
| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| Established in 1989, China Foundation for Poverty Alleviation (“CFPA”) is the first Non-Profit Non-Government Organization (“NGO”) in China that is specialized in microfinance. Its microfinance activities started in 1996 under a World Bank poverty alleviation project. To date it has cumulatively disbursed RMB600 million of micro loans to 150,000 households, directly benefiting more than 600,000 people. To expand its out-reach and to achieve commercial sustainability, CFPA endeavors to spin-off and transform microfinance operations into a commercially operated entity. CFPA has incorporated a subsidiary, CFPA Microfinance Management Co., (the “Company”), to serve as the vehicle for this transformation. CFPA has invited IFC and other investors to join an upcoming capital increase of the Company and to provide both capital and technical assistance. The project presents an opportunity for IFC to assist in an NGO transformation and to support developing a nationwide commercially operated microfinance franchise. |
|
| Project sponsor and major shareholders of project company |
CFPA, the Sponsor is a nationwide Non-Profit NGO registered with the Ministry of Civil Affairs. It has five major programs, namely Education, Health, Community Development, Disaster Relief and Microfinance. It used to be a Government unit, administered by the State Council Leading Group on Poverty Alleviation, but was separated from the government system in 1999 and became independent.
The other investors interested in the Project Company include a foreign microfinance company and private investors. |
| Total project cost and amount and nature of IFC's investment |
| The expected post-investment capitalization of the Company is RMB250 (approximately $36 million). IFC’s investment consists of equity of up to RMB 51 million (approximately $7.5 million) for a shareholding of 10-19%. |
| Location of project and description of site |
| The current microfinance operation is conducted through a network of 27 outlets in 10 provinces. It is expected that the Company will be operated at a national level. |
|
| Anticipated development impact of the project |
Expand access to finance in rural areas;
Establish standards for microfinance NGO transformations;
Support a nationwide microfinance provider to increase impact and out-reach; and
- Showcase the commercial sustainability of microfinance operations in China. |
| IFC's expected development contribution |
IFC’s global microfinance knowledge and NGO transformation experience are unique; and
IFC’s participation as a shareholder will bring credibility to the stakeholders. This is particularly meaningful for the Company to apply for a groundbreaking nationwide microfinance license.
|
| Environmental and social issues - Category FI |
This project involves IFC support for the business of Microfinance, and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Considering the nature of activities supported, the company will be required to:
- Develop a procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the Microfinance exclusion list
Identify qualified persons to manage and implement the procedure
- Demonstrate commitment and resources to implementing the procedure
- 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 |
|
| For inquiries about the project, contact: |
Mr. Liu Dongwen
5th Floor, South Building, 36 Shuangyushu Xili, Haidian Distrcit, Beijing 100086, China
Tel: 8610-82872688-107
Fax: 8610-62526268 |
|
| 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 |
|
|
|
|