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St. Georges Financing Partnership for SMEs

Project number 12412-01
Country Panama
Sector Financial Institutions
Status In implementation

Basic information

Company name
St. Georges Bank & Company Inc.
Investment type Loan
E&S category
FI-2
Disclosed date
Projected board date
Approval date
Signed date
Team Leader
Balevich Macarenko, Anna

Financial Summary

Financing amount $ 25,000,000
Financing Currency
USD

Client
information

Client Contact Name: Viviana Moreno
Title: Deputy Vice-President International Trade and Treasury
Phone Number: +507 322-2022
Email Address: vmoreno@stgeorgesbank.com

PROJECT
SCOPE
AND
OBJECTIVE

The proposed transaction consists of a senior unsecured financing to St. Georges Bank & Company Inc. (the “Bank”) of up to US$25 million which is expected to be comprised as follows: (i) IDB Invest Senior Loan of up to US$5 million to be funded by the IDB Invest with a three-year tenor; (ii) IDB Subordinated A Loan of up to US$20 million to be funded by the IDB Invest with an 8-year tenor. The Project will be complemented by supporting the Bank on developing a Sustainable Finance initiative that will include four layers of advisory services support. First, the development of corporate sustainability policy. Second, the establishment of procedures and capabilities that allow the Bank’s functionaries to identify and manage green investments in SME segment. Third, the analysis and improvement of risk policy on environmental, social and climate risk. Fourth, support the Bank on maximizing benefits from the previous three layers to increase SMEs credit origination in sustainable investments.

Environmental
and
Social
Review

  1. Scope of Environmental and Social Review. The environmental and social review of the proposed transaction was carried out through desk research, and an extensive review and audit of the client’s existing environmental and social management system.  Promerica group, of which St. Georges Bank & Company Inc. is a member, is an existing IDB Invest client with strong environmental and social management capacity and policies. 
  2. Environmental and Social Categorization and Rationale. The proposed operation is classified as an FI-2 per IDB Invest’s Sustainability Policy.  Underlying loans to be supported under the credit line will focus on SMEs.  The sub-loans average US$81,000.  Category A sub-projects, per IDB Invest’s definition, will be excluded.
  3. Environmental and Social (E&S) Risks and Impacts. The main E&S risks of this projects are associated with the Financial Institution (FI) capacity to identify and manage the E&S risks associated with its lending activities.  St. Georges Bank’s capacity in this respect is considered high based on previous work with other DFIs (see Mitigation Measures).  The Environmental Social Health and Safety (ESHS) impacts and risks associated with loans to SMEs are likely to be moderate in nature.  St. Georges Bank´s portfolio is concentrated concentrated in Construction (29%), Retail (25%), Services (23%), and Industry (9%).
  4. Mitigation Measures. St. Georges Bank & Company Inc. will be required to ensure that all loans supported under the loan comply with IDB Invest’s Exclusion List, applicable E&S local laws, and the bank’s existing Environmental and Social Management System (ESMS).  St. Georges Bank & Company Inc. existing management system consists of group wide environmental policy and set of procedures.  IDB Invest’s analysis indicated opportunity to strengthen St. Georges Bank´s local capacity to manage E&S risks, and a TC has been developed with Advisory Services to enhance overall environmental and social management.  High level themes related to this TC are detailed in the action plan below. 
  5. Environmental and Social Action Plan

Task

Description

Deadline

Policy Development

Design a comprehensive sustainability policy that sets our St. Georges Bank´s commitment to environmental and social risk management and sustainability objectives, consistent with the policies and best practices of Grupo Promerica. 

6 months post disbursement

ESMS Procedures Update

Undertake a portfolio analysis to develop enhanced E&S procedures, tools, and templates to address environmental, social, and climate risks relevant to overall risks identified within the portfolio.

12 months post disbursement

Capacity Building

Training of senior management, loan officers and credit analysts on enhanced ESMS functions, and green market opportunities. 

12 months post disbursement

6. Contact Information For project inquiries, including environmental and social questions related to an IDB Invest transaction please contact the client (see Investment Summary tab), or IDB Invest using the email requestinformation@idbinvest.org. As a last resort, affected communities have access to the IDB Invest Independent Consultation and Investigation Mechanism by writing to mecanismo@iadb.org or  MICI@iadb.org, or calling +1(202) 623-3952.

For inquiries, comments and requests about the project

For inquiries, comments and requests about the project

Information Request