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| Mi-Bospo CL II |
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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 | 27435 |
| Company name | MI-BOSPO |
| Country | Bosnia and Herzegovina |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
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| Date SPI disclosed | February 12, 2009 |
| Projected board date | March 16, 2009 |
| Previous Events | Signed: June 17, 2009
Approved: June 9, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project consists of an investment of up to EUR 7 million in Micro Credit Foundation Mi-Bospo (“Mi-Bospo”). The investment would be in the form of either a senior IFC loan and/or a full guarantee by IFC of a loan by another lender, in each case to support Mi-Bospo’s lending activities to women entrepreneurs (the “Project”). In addition, IFC will seek an undertaking from Mi-Bospo to enable IFC to subscribe for up to 20% of the capital of Mi-Bospo JSC, when and if formed.
Mi-Bospo is distinguished for targeting women entrepreneurs and stands as one of the largest and most profitable microfinance institutions (“MFIs”) in Bosnia and Herzegovina. It commands approximately 7% of the market share and has nearly 35,000 active loans. Mi-Bospo’s loans and services are targeted at small businesses, crafts, services and agricultural activities. As of December 31, 2008, Mi-Bospo had a loan portfolio of $54.2 million equivalent which has more than doubled since 2006, and an equity base of $13.4 million equivalent composed of donated capital and retained earnings. As of that same date, ROAA and ROAE stood at 5.2% and 22.1% respectively.
This project is aimed at complementing IFC’s advisory support and initial investment in Mi-Bospo, a EUR$2 million senior loan granted in 2006. |
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| Project sponsor and major shareholders of project company |
| Mi-Bospo was founded by the Bosnian humanitarian organization, the Bosnian Committee for Help (Bospo - with the help of Danish Refugee Council). Microcredit program (2001 - MI-BOSPO an independent microcredit organization) was established with the help of the World Bank. In 1999, Mi-Bospo became an affiliate of Women’s World Banking (“WWB”). WWB is a microfinance network headquartered in New York and created in 1979. The network provides support, advice, training and information to a global network of 54 microfinance institutions and banks in 30 countries worldwide. |
| Total project cost and amount and nature of IFC's investment |
| The proposed project consists of investment of up to EUR7 million in the form of either a senior IFC loan with a 3.5 years tenor and/or a full guarantee by IFC of a loan by another lender. In addition, IFC will seek an undertaking from Mi-Bospo to enable IFC to subscribe for up to 20% of the capital of Mi-Bospo JSC, when and if formed. |
| Location of project and description of site |
| Mi-Bospo is headquartered in Tuzla, Bosnia and Herzegovina. Mi-Bospo has 27 offices covering rural areas across the country. However, its operations are concentrated in the Tuzla Canton. |
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| Anticipated development impact of the project |
| In this project, IFC will be supporting a successful commercially oriented microfinance company in its mission to provide access to finance for women micro entrepreneurs. Specifically, through this investment there will be a significant direct contribution to poverty reduction – as the loan is expected to reach an estimated 3,000 new micro entrepreneurs during the life of the loan. Therefore, the project’s development impact is expected to be high and far reaching in terms of its economic support for productive micro enterprises, of its stimulus for employment generation and for confidence building for the Bosnian microfinance sector. |
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| IFC's expected development contribution |
| IFC has an important role to play providing sustainable medium-term financial resources that complement short-term loans from the domestic banks and that will enhance Mi-Bospo’s capacity to serve more customers and expand its outreach. In addition, IFC’s support and commitment to Mi-Bospo in its transformation stage will signal confidence and a seal of approval of its future strategy of becoming a self-sustainable for-profit MFI. |
| 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.
Mi-Bospo is an existing IFC client with requirements to establish a process to screen investments against IFC’s microfinance exclusion list and applicable national environmental and social regulations, and to appoint responsible staff.
Mi-Bospo will be required to:
- Revise its environmental procedures prior to disbursement to the satisfaction of IFC to include processes to:
i) screen against IFC’s Microfinance Exclusion List,
ii) monitor borrowers’ compliance with national and local laws, and
iii) assign environmental risk categories
- Continue to ensure that qualified persons are appointed to manage and implement the procedure
- Demonstrate commitment and resources to implementing the procedure
- Demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions
- Continue to 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. Nejira Nalic, Director
Micro Credit Foundation MI-BOSPO, Tuzla
Bosne Srbrene bb
75000 Tuzla
Bosnia and Herzegovina |
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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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