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| Fomento Agroindustrial Progresemos SFOM |
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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 | 26338 |
| Company name | Financiamiento Progresemos, SA de CV, SOFOM ENR |
| Country | Mexico |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Approval |
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| Date SPI disclosed | January 23, 2008 |
| Projected board date | February 25, 2008 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project is to extend a Mexican Peso (MXN) line of credit of up to MXN 40 million to Fomento Agroindustrial Progresemos, S.A. de C.V., SOFOM, ENR (Progresemos or the company) to support the Company’s loan portfolio growth. IFC will also provide Advisory Services of a form and nature to be agreed between IFC and the company. The clients that would benefit with this credit line are women entrepreneurs in the micro and small enterprise category located, initially, in the states of Oaxaca, Chiapas, Tabasco, Campeche, Morelos, Michoacan and Veracruz. |
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| Project sponsor and major shareholders of project company |
| Progresemos is a recently formed non-bank multi-purpose financial institution (Sofom) specialized in microfinance and focused on Mexico’s frontier regions. Progresemos is a small player in the market. As of September 2007, Progresemos’ total assets and total equity amounted to $3.6 million and $3.5 million equivalent, respectively. The company is owned 100% by a group of investors who are nine private individuals. |
| Total project cost and amount and nature of IFC's investment |
| The proposed project cost would be MXN40 million A loan, to support the company’s loan portfolio growth. |
| Location of project and description of site |
| Progresemos is headquartered in Mexico City. Through its strategic partners Progresemos has presence in the following states: Oaxaca, Chiapas, Tabasco, Veracruz, Morelos, Michoacan and Campeche. Some of the states, such as Oaxaca, Michoacan and Chiapas, have populations that are among the lowest in economic strata in Mexico, and with high potential for microlending to small entrepreneurs. |
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| Anticipated development impact of the project |
The expected development impacts of the project will be:
- Progresemos’ loan portfolio growth and the number of active clients in the target sector;
- The number of local MFIs partnered with Progresemos;
- The number of local MFIs benefiting from Progresemos’ technology platform and operating procedures;
- The number of local MFIs where Progresemos participates in the decision making process. |
| IFC's expected development contribution |
- Promote access to finance:
IFC’s loan would assist a new microfinance lending institution to be able to broaden its reach in extending loans to the unbanked segments of the Mexican population.
- Promote competition:
IFC’s partnership with Progresemos will foster competition in the microfinance sector in Mexico.
- Reduce interest rates over the longer term:
The fostering of competition in this sector will facilitate the reduction of interest rates charged for microlending over time. |
| 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 project 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 IFC Microfinance exclusion list;
- Identify qualified persons to manage and implement the procedure;
- Commit to establish a similar screening process to avoid supporting activities on the IFC Microfinance Exclusion List in MFIs which provide loan origination or servicing for Progresemos or in which Progresemos will take a controlling stake;
- Demonstrate commitment and resources to implementing the procedure; and
- Submit a periodic report to IFC as per format to be provided by IFC. |
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| For inquiries about the project, contact: |
Roberto Flores Athie
COO
Miguel Laurent 15-Bis, Desp. 103
Col. Del Valle
C.P. 03100, Mexico D.F.
Mexico
Telephone: +52 (55) 55752009 ext. 102
Fax: +52 (55) 5573605 |
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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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