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| Summary of Project Information (SPI) |
| This Summary of Project Information 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. |
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| Project number | 24441 |
| Project name | FONDEP |
| Country | Morocco |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | FONDEP MicroCredit |
| Environmental category | FI-1 |
| Date SPI disclosed | December 1, 2005 |
| Projected board date | January 3, 2006 |
| Status | Active |
| Previous Events | Signed: February 28, 2006
Approved: February 28, 2006 |
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| Description of company and purpose of project |
The project involves IFC providing Foundation for Local Development and Partnership (FONDEP or the company) with a comprehensive developmental financing and technical assistance package that will complement the company’s strong growth potential and expansion plans in the coming years.
FONDEP is a microfinance institution operating in Morocco. It began its microfinance activities in 1997, targeting rural and semi-urban regions in Morocco by providing solidarity group lending. Since its inception in 1996, FONDEP has built a loan portfolio of MAD 41 million as at end of August 2005 divided among more than 25,000 borrowers.
The project has two components:
- a Partial Credit Guarantee Facility (the “Guarantee”) to enable the company to source much- needed local currency financing from local banks, and
- and a technical assistance package (“TA”) to develop the company’s internal controls and risk management system, and strengthen its human resources function. Moreover, the TA is aimed at enabling the company to reinforce its operations and management structure to pre-empt its eventual transformation into a non-bank financial institution. |
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| Project sponsor and major shareholders of project company |
FONDEP was established in 1996 as a nonprofit nongovernmental organization (“NGO”) dedicated to the provision of credit facilities to micro-entrepreneurs in urban and semi-urban areas in Morocco. The company aims at integrating disadvantaged individuals, particularly women and unemployed youth, into the economic and productive sectors in the country, by extending micro-credit facilities to finance revenue-generating micro-projects and businesses. FONDEP’s mission aims at enhancing the livelihoods of individuals and economic groups who have no formal access to credit services.
FONDEP is also engaged in social services such as literacy and micro-entrepreneurial training campaigns, aimed at sensitizing disadvantaged economic groups to the fundamentals of enterprise and business creation.
As FONDEP is organized as an NGO, it relies primarily on donor funding and long-term debt to finance its lending activities. |
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| Total project cost and proposed IFC investment |
The Guarantee Facility is intended to cover up to 50% of up to MAD 60 million worth of credit lines extended by local commercial banks over the course of two years. The Guarantee Facility will partially cover the principal and interest payments and is expected to have a tenor of up to ten years.
The Guarantee is intended to help FONDEP build its credit history among the local creditor institutions. |
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| Location of project and description of site |
| FONDEP’s head office is based in Rabat, Morocco. The company has 41 branch offices located across the country. |
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| Project Development Impact and IFC's Role |
The developmental impact of FONDEP is expected to be far reaching in terms of its economic support for productive micro businesses, stimulus for growth, and employment generation and confidence building for the banking sector.
The proposed Guarantee will allow FONDEP to source much-needed local currency funding of up to MAD 60 million to on-lend to micro-entrepreneurs. This project will allow FONDEP to expand its microfinance activities, expanding its outreach to over 300,000 new clients. Moreover, FONDEP, with the help of IFC, and in coordination with local agencies and the other local microfinance players, will work with the regulatory agencies to develop new laws and modify existing once to create a conducive legal framework that fosters easier access to credit by the poor.
IFC Role:
- To meet the company’s critical funding needs; and
- to support the growth and development of microfinance in Morocco through its support of FONDEP. |
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| Environmental and social issues - Category FI-1 |
This is an FI type 1 microfinance project. FONDEP will be required to apply IFC's microfinance exclusion list and develop appropriate procedures to ensure that its borrowers are in compliance with any applicable host country environmental requirements.
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| To contact the project company, please write to: |
Mr. Mouatassim Belghazi, Chairman / CEO
Telephone: 212 (0) 37 75 62 81
Fax: 212 (0) 37 75 63 18
Address: 17, rue Cadi Sanhaji – Pinède, Souisso II – Rabat 10000, Morocco
E-mail: contact@fondep.com |
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