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| FINEM Edu Loans |
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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 | 25362 |
| Company name | Financiera Educativa de Mexico S.A. de C.V. |
| Country | Mexico |
| Sector | Finance & Insurance |
| Environmental category | C |
| Department | Health and Education |
| Status | Active |
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| Date SPI disclosed | October 12, 2006 |
| Projected board date | November 12, 2006 |
| Previous Events | Invested: November 9, 2007
Signed: November 22, 2006
Approved: November 21, 2006 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Financiera Educativa de Mexico SA de CV (Finem) is a specialized non-bank financial institution that focuses on financing the education sector in Mexico. IFC previously committed financing facilities to support the initiation of Finem’s business, which is aimed at providing peso denominated loans to privately-owned schools and higher education institutions, to help fund their expansion and modernization programs. In addition, Finem also provides advisory services or technical assistance in a wide range of managerial or technical disciplines, to help qualifying clients reinforce the quality of their management and become more viable and competitive firms.
The Project presented herein is a $15 million equivalent loan facility aimed at supporting Finem’s new student loan business. Finem’s goal at this stage is to finance loans originated at the university level. This will enable Finem to gain expertise in the business without initially having to build full servicing capabilities, which could be developed at a later stage. |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Consorcio Pro-Desarollo SA de CV, a private Mexican company that has established business interests in the real estate, construction, agribusiness, biotechnology and security areas. Consorcio Pro-Desarollo SA de CV is Finem’s majority shareholder, owing 82% of its share capital; IFC owns 17% of Finem’s capital. |
| Total project cost and amount and nature of IFC's investment |
The project corresponds to the initial phase of Finem’s student loan business and is expected to cover funding requirements for certain student loan products, for a period of approximately three years. IFC’s facility consists of a Mexican peso denominated loan facility up to the equivalent of $15 million. |
| Location of project and description of site |
| Finem is headquartered in Mexico City and does not plan to operate branches or local representation offices outside Mexico City at this stage. |
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| Anticipated development impact of the project |
The project will enhance access to higher education in Mexico by supporting the development of the private sector student loan market. Improved access to student financing will be critical in realizing the enrollment expansion rates that both Government and private sector analysts expect to take place in the medium term.
In addition to this, a well developed student loan market could help to improve equality in access to education in Mexico, by enabling mid and lower income students to finance their post-secondary education with long term loans. Finally, developing the student loan market deepens financial markets by adding a new asset class for financial institutions and investors. |
| IFC's expected development contribution |
| By providing long term financing, IFC will be supporting the early stage of Finem’s student loan initiative. This would allow Finem to strengthen its institutional profile by diversifying into a new line of business, which has important development implications. IFC’s involvement should also have an important demonstration effect for investors and financial institutions, showing that the education financing business can be viable/profitable. |
| Environmental and social issues - Category C |
| This project is a category C project with no expected adverse social or environmental impacts based on the environmental and social review. IFC has a previous investment in Finem, which is a non banking financial institution, and which for this loan will be providing student loans for university studies. Therefore there will be no further environmental or social review required. |
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| For inquiries about the project, contact: |
Mr. Francisco Gonzalez-Cos General Manager Financiera Educativa de Mexico S.A. de C.V. Bosque de Alisos 45-A, Edificio Oriente Col. Bosques de las Lomas Tel. 9177 9380 E-mail: fgonzalezcos@finem.com.mx |
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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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