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Tanner factoring and leasing SMES II

Project number 11363-06

Country Chile

Sector Financial Institutions

Status Proposed

Basic information

Company name
Tanner Servicios Financieros S.A.

Investment type Loan

E&S category
FI-3

Disclosed date
10/26/2020

Projected board date
11/24/2020

Team Leader
Paredes, Cristina

Financial Summary

Financing Requested
Approximately US$100 million

Financing Currency

USD

Client
information

Client Contact name: Gustavo Inostroza
Title: Finance Manager
Phone number: +56 2 33257150
Email address: gustavo.inostroza@tanner.cl

Project
Scope
and
Objective

The Project aims to finance Small and Medium-sized Enterprises (“SMEs”) through factoring and financial leasing operations in Chile. The proposed operation consists of a credit facility for approximately US$100 million. The loan will have a tenor for up to five years, and consisting of: (i) an A Loan of up to US$40 million to be financed by IDB Invest; ii) a co-loan of up to US$20 million; and (iii) a B Loan of up to US$40 million to be financed by participating investors. The project will also enable Tanner to expand the financial services it offers to its clients, diversify its sources of financing, and, at the same time, improve the structure of its assets and liabilities.

Environmental
and
Social
Review

1. Scope of Environmental and Social (“E&S”) Review

Tanner is an existing client of IDB Invest. The review was based on the evaluation of the latest information received (2019 - Annual Environmental and Social Performance Report) and on updating the E&S summary of the factoring transaction approved in 2017 (12218-01).

2. Environmental and Social Categorization and Rationale

The sub-projects/transactions to be supported have a low risk potential (factoring and leasing). Therefore, per the IIC Environmental and Social Sustainability Policy, the FI has been categorized as FI-3.

3. Environmental and Social Risks and Impacts

Tanner's main business is factoring and leasing operations with SMEs to finance working capital. Tanner's portfolio as of June 2020 comprises: 40% automotive, 26% traditional credit, 24% factoring, 7% leasing, and 3% other. The placement by economic sector in factoring comprises: 20% real estate, 14% commerce, 14% non-metallic manufacturing, 12% agriculture and livestock, 11% education, 10% construction, etc. The average amount of factoring loans is US$80,000 and the average duration is 60 days.

4. Mitigation Measures

Tanner implements, since 2016, an Environmental and Social Management System (“ESMS”), called Environmental and Social Policy and Procedure, which allows it to identify and manage the E&S risks of its portfolio following local legislation. The ESMS includes the exclusion list, an E&S policy, categorization procedures, relevant national regulations, and compliance monitoring, and enforcement responsibilities. Tanner's staff has participated in IDB Invest (formerly IIC) trainings.

Tanner will not finance with IDB Invest resources companies with activities included in the Exclusion List, or transactions categorized as High Risk (category A) and will verify that the companies comply with Chilean environmental, labor and tax laws. In order for Tanner to update knowledge of the IDB Invest requirements, the personnel in charge of supervising and implementing the ESMS must take the IDB Invest online course for financial intermediaries.[1] The online course “Environmental and Social Management Systems” will help your staff to incorporate E&S practices into the Bank's risk management.

5. Environmental and Social Action Plan Not apply.

Contact Information For project inquiries, including E&S 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.

[1] https://cursos.iadb.org/es/indes/sistema-de-gesti-n-ambiental-y-social-una-oportunidad-de-negocio