|
|  |
| Vision Banco EQ |
|
| 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 | 28039 |
| Company name | Vision Banco S.A.E.C.A. |
| Country | Paraguay |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Approval |
|
| Date SPI disclosed | June 16, 2009 |
| Projected board date | July 22, 2009 |
|
| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The proposed project will consist of an IFC investment of up to $5 million in ordinary common shares, another convertible instrument or a combination thereof.
The primary objective of the project is to develop a long-term partnership with a leading microfinance institution with a strong presence in the interior of the country, while providing support to a key local player to further expand the access to financial services to those segments that remain highly underserved by other financial institutions, such as MSMEs. In addition, in the presence of the existing market dynamics, IFC’s investment constitutes a favorable alternative to strengthen the capital base of Visión Banco, which will contribute to improve the risk profile of the Bank, eventually deriving in a better risk rating and overall lower funding cost. In this context, IFC’s investment will have a strong demonstration effect by sending a positive signal to the market and enhancing the investors’ confidence vis-à-vis Paraguayan risk. |
|
| Project sponsor and major shareholders of project company |
| Visión Banco was originally created by 11 Paraguayan shareholders who also became responsible for its management. 7 founding members are in the Executive Committee, in charge of day-to-day business, top management and main strategic decisions, and are currently members of its Board. Over time, the Bank incorporated institutional investors (Acción Investment in Microfinance first, and more recently, Oikocredit). |
| Total project cost and amount and nature of IFC's investment |
| The proposed project will be an investment of up to $5 million in ordinary common shares, another convertible instrument, or a combination thereof. |
| Location of project and description of site |
| Headquartered in Asunción, capital city of Paraguay, Visión Banco currently operates an extended network of 41 branches across the country. |
|
| Anticipated development impact of the project |
- Support the development of the banking system.
IFC’s support to Visión Banco will contribute to foster its engagement with the Paraguayan financial system, at a time when financial institutions are facing increasing concerns on the verge of the global financial crisis.
- Enhance access to finance for unattended and priority sectors.
The Project will allow Visión Banco to provide its MSME client base access to funding with longer maturities, enabling these to undertake capital investments at longer tenors and attractive costs. By partnering with Visión Banco, the microfinance market leader, IFC can leverage on an extensive national coverage to efficiently reach those segments of the population with limited access to financial services, therefore improving the living standards of these sectors.
- Support the growth of Visión Banco.
IFC will be supporting the growth of a local player in a strategic market which constitutes a key driver of the economic growth of the country, developing a long-term relationship with a strong partner who shares IFC’s vision and commitment to broaden the depth and range of financial services available in Paraguay. |
 |
| IFC's expected development contribution |
| In a very important counter-cyclical role, through this project IFC will be able to fill a funding void due to the tightening of capital markets in emerging countries, including Paraguay. Unavailability of long-term and diversified sources of funding has traditionally been one of the critical issues in the Paraguayan financial system, and has been recently magnified by the current financial turmoil, therefore limiting access to finance to several underserved segments. |
| 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 analyzed the FI portfolio and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determined the Applicable Performance Requirements based on an analysis of the potential social and environmental risks associated with the FI portfolio and considering IFC’s investment. The Applicable Performance Requirements are the IFC MFI Exclusion List and the applicable national social and environmental laws and regulations. Based on the Applicable Performance Requirements and FI SEMS and capacity review, the project will be required to:
- Develop a 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; and
- Submit a periodic report to IFC as per a format to be provided by IFC. |
|
| For inquiries about the project, contact: |
Mr. Luis A. Maldonado Renault, Executive Director
Visión Banco
Palma esq. Ntra. Sra. de la Asunción
Asunción, Paraguay
Tel: (59 5 21) 415-3162 |
|
| 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 |
|
|
|
|
|