Company name
Fedecredito Remittance Funding Company
Project number
11932-02
FI-2 operations are those where the risk potential is considered medium: the FI’s current or future portfolio consists of or is expected to consist of, business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures; or includes a very limited number of business activities with potential adverse environmental or social risks or impacts that are diverse, irreversible, or unprecedented.
E&S category
FI-2
Country
El Salvador
Sector
Financial Institutions
Status
In implementation
Disclosed date
10/25/2017
Projected date at which a project will be put forward for the Board of Executive Directors’ approval.
Projected board date
02/11/2017
Approval date
01/17/2018
Signed date
09/19/2018
Sponsoring entity
Federacion de Cajas de Credito y Bancos de los Trabajadores
Investment Operations Department Contact
N/A
Investment type
Syndicated amount
N/A
Financing amount
USD $ 15,000,000
Currency
USD
Project scope and objective
The IIC’s participation will consist of a US Dollar denominated note subscription to Fedecredito Remittance Funding Company Ltd. (the “Issuer”) in an amount of up to US$15 million (the “Note”). IFC and responsibility have already purchased US30 million in notes of this issuance. IIC’s Note will have an individual maximum tenor of 7 years with a 2-year grace period (the “Financing”). The proceeds of the Financing will be used to increase its lending activities for low-income housing and MSMEs.
Brief Project Description:
The Fedecredito System (“FDCS”) comprises 48 Cajas de Credito (“CC”) and 7 Bancos de los Trabajadores (“BDT”). Fedecredito is a second-tier FI, 100% privately-owned and supervised by El Salvador’s “Superintendencia del Sistema Financiero”. It was established in 1943 and its mission is to help develop an effective FDCS by providing its members with training and specialized technical services. The FDCS in turn constitutes the largest network of financing service providers in El Salvador, present in 187 of the 262 municipalities of the country. Fedecredito only provides financing to their member entities. The CCs and BDTs funnel this funds into the local market. As of December 2016, the FDCS was the 5th largest lender in the country with a loan portfolio of US$1.4 billion (market share of 11%), deposits of US$740 million and more than 961k credit users serving mainly low-income families and MSMEs. FDCS’ portfolio distribution is as follows: MSMEs 35%; consumer loans 53% and housing 12%
Fedecredito is an existing client of the IDBG. In 2010, the Bank approved a US$19 million A/B Loan to increase financing for municipal market modernization. Fedecredito has also received funding and technical assistance from the Multilateral Investment Fund (“MIF”) to improve its ability to serve the poorest segments of the country’s population; and support modernization and institutional strengthening.
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Contact information
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Client Contact
N/A
PHONE NUMBER
N/A
POST OFFICE ADDRESS
N/A
IDB Invest Contact
requestinformation@idbinvest.org
PHONE
+1(202)-566-4566
ADDRESS
1350 New York Ave NW, Washington, DC 20005
COUNTRY OFFICES
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Environmental and social review
IDB Invest conducts an environmental and social due diligence (ESDD) commensurate with the nature, scale, and stage of the project, and with its level of environmental and social risks and impacts. The ESDD will confirm the project E&S categorization and assess the project with respect to the client requirements in IDB Invest Environmental and Social Sustainability Policy. The results of the ESDD, including any identified gaps are described in the Environmental and Social Review Summary (ESRS) provided below. For projects approved as of 2016, any gaps with respect to IDB Invest's Environmental and Social Sustainability Policy at the time of the ESDD are addressed in the Environmental and Social Action Plan (ESAP) presented below, to comply with the date mentioned above.
ENVIRONMENTAL AND SOCIAL REVIEW SUMMARY
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