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| MicroCred Parallel Facility - Nanchong |
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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 | 25940 |
| Company name | MicroCred Nanchong |
| Country | China |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
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| Date SPI disclosed | March 16, 2007 |
| Projected board date | April 19, 2007 |
| Previous Events | Signed: December 15, 2007
Approved: December 13, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
MicroCred Nanchong is a greenfield microfinance institution (MFI). It will propose a range of products from micro-loans for micro-enterprises to loans for small and medium-sized enterprises (SMEs). It will target local entrepreneurs with limited access to formal financial services in China. It will focus its activities around the city of Nanchong, in the Sichuan province of China.
MicroCred Nanchong will be managed by local and international staff with prior experience in micro and small business lending. It will also be supported by technical assistance from MicroCred S.A. (MicroCred Holding). |
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| Project sponsor and major shareholders of project company |
MicroCred Holding is an investment company, based in Paris, France and sponsored by PlaNet Finance, that aims to create a network of commercial MFIs offering financial services to low-income entrepreneurs who do not have access to the traditional financial sector. It was created in 2005 and is designed to invest equity and subordinated debt in around 15 MFIs over the next 5 years.
MicroCred Nanchong will be fully-owned by MicroCred China, a Hong Kong based holding company. MicroCred China will be initially owned by MicroCred Holding (49% shareholding), AIG (18% shareholding), KfW (18% shareholding) and IFC (15% shareholding). |
| Total project cost and amount and nature of IFC's investment |
The total project cost will be around $37.2 million, composed of around $7.1 million of equity and around $30.1 million of debt.
The proposed IFC investment is:
- an equity investment of up to $1.1 million; and
- senior debt of up to $6 million equivalent.
The IFC loan will be denominated in local currency.
IFC is also planning to provide technical assistance trust funds for MicroCred Nanchong. |
| Location of project and description of site |
| MicroCred China will be headquartered in Hong Kong, whereas MicroCred Nanchong will be headquartered in Nanchong, China. The initial investment operations of the company will be based in Nanchong. |
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| Anticipated development impact of the project |
| The developmental impact of MicroCred Nanchong is expected to be far reaching in terms of its economic support for productive micro-entrepreneurs, small businesses and SMEs, employment generation and providing access to finance to an underserved segment of the market. |
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| IFC's expected development contribution |
| IFC's investment in MicroCred Nanchong will send positive signals to investors and local banks, to support this project and the microfinance sector. Through this project, IFC’s role will be to support a greenfield MFI in its growth strategy, and enable it to operate commercially with a wide funding base. |
| 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. MicroCred Nanchong is sponsored by MicroCred Holding, an IFC investee company (#22583). As part of IFC's investment in the holding company, MicroCred Holding has already committed to establish an SEMS for each MFI in which it invests, which includes screening against the IFC Microfinance Exclusion List.
In line with this prior commitment, MicroCred Nanchong will set up its SEMS prior to disbursement, ensuring that all its investments are screened and processed to avoid supporting activities on the IFC Microfinance Exclusion List, will appoint and maintain an Environment Manager, will demonstrate commitment and dedicate resources to implementing the procedures and take action to remedy any gaps in implementation on an ongoing basis and report to IFC in the form of an Annual Environment Performance Report. |
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| For inquiries about the project, contact: |
Mr. Arnaud Ventura, Managing Director and CEO
MicroCred S.A.
13 rue Dieumegard
93400 Saint-Ouen
Telephone: + 331 4921 2626
Fax: +331 4921 2627
E-mail: aventura@microcred.org
Website: www.microcred.org |
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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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