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| FGB MSME Loan |
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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 | 27009 |
| Company name | First Global Bank |
| Country | Jamaica |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | November 17, 2008 |
| Projected board date | December 19, 2008 |
| Previous Events | Invested: April 1, 2009
Signed: February 27, 2009
Approved: February 26, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project involves partnering with First Global Bank Limited (“FGB”or the “Bank”), a Jamaican bank, in offering loans to micro, small and medium size enterprises (“MSMEs”) across Jamaica. The Bank is the fifth largest bank in Jamaica by assets size and has a network of five branches across the island.
Jamaica’s banking penetration (21% as of March 2008) is still moderate; accordingly there is an unmet financing demand from local MSMEs. FGB plays an important role in reducing this gap as it provides financing solutions to this underserved segment. |
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| Project sponsor and major shareholders of project company |
FGB is a wholly owned subsidiary of First Global Holdings Limited, an indirect 100% subsidiary of GraceKennedy Ltd. (“GK” or the “Company”), one of the largest groups of companies of the Caribbean with its primary businesses in the food and financial services sectors. GK started operations in Jamaica in 1922 and besides Jamaica, the company has its shares listed on the Trinidad, Barbados and Eastern Caribbean stock exchanges. FGB was established in 1970 and as of December 2007 had over $365 million equivalent in assets, $206 millions equivalent in deposits and an equity base of $42 million.
Shareholder Composition:
First Global Holdings Ltd ……. 100% |
| Total project cost and amount and nature of IFC's investment |
| The proposed investment which is subject to sign off by the Jamaican regulators, consists of an equity investment in common shares for up to $10 million and a straight senior loan earmarked for MSME financing for up to $10 million. This investment is expected to assist FGB in the implementation of the growth plan put forth by the management and shareholders. |
| Location of project and description of site |
| FGB is located in Kingston, and its branch network spans throughout Jamaica. |
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| Anticipated development impact of the project |
The successful implementation of the project will
- promote lending to MSMEs;
- increase the number of products and services available for the MSME market and
- underpin the overall growth in the economy, as higher loan volumes for MSMEs should have a significant impact on Jamaica’s economic growth. |
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| IFC's expected development contribution |
IFC is expected to play an important role, as it will:
- enhance FGB’s ability to support the micro and SME segments contributing to deepening the financial services sector in Jamaica;
- provide access to the formal credit for small business owners in Jamaica.
- help to reduce income inequality while fostering domestic demand and economic growth. |
| 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 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. The Applicable Performance Requirements are:
- The IFC FI Exclusion List
- The applicable National Social and Environmental Laws and regulations and
- The IFC Performance Standards
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 are in compliance with the Applicable Performance Requirements
- 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: |
Mr. Wayne Wray
CEO
First Global Bank Limited
28-48 Barbados Avenue, Kingston 5
Jamaica, West Indies
Telephone: + 876 9293383-6
Fax: +876 929 3654 |
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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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