This summary covers an investment by Equity Group Holdings Limited (EGHL) of Kenya in ProCredit Bank Congo SA in Democratic Republic of Congo (DRC). The investor has applied for a MIGA guarantee of $40.5 million for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance. MIGA also proposes to use its Conflict-Affected and Fragile Economies Facility on a first-loss basis.
The EGHL investment in DRC represents a new acquisition of the existing operations of ProCredit Bank Congo SA and would be an expansion of its own operations in the country. ProCredit Bank Congo SA has a diversified loan portfolio as a partner for micro, small and medium-sized enterprises.
Environmental and social risks (E&S) and impacts associated with the Pro Credit’s portfolio are considered limited, generally site-specific, and manageable through the implementation of mitigation measures. Key potential E&S risks and impacts are associated with client’s local capacity to manage E&S risks associated with its lending activities. The project is a category FI-2 under MIGA’s Policy on Environmental and Social Sustainability.
Pro Credit has an Environmental and Social Policy, an Environmental and Social Management System (ESMS), and a Human Resources Policy in place at the corporate level. During the acquisition of Pro Credit’s operations in DRC, EGHL will be required to implement an ESMS in accordance with MIGA’s requirements and to screen projects against MIGA’s Exclusion List, national environmental and social laws and regulations, and MIGA’s Performance Standards for its lending portfolio. EGHL will also be required to appoint an ESMS officer at the local level and complete training in an agreed timeframe. EGHL will update its human resources policies and procedures to ensure its compliance at all levels with the requirements of MIGA’s Performance Standard 2 on Labor and Working Conditions.
The DRC suffers from extremely limited access to finance. The project is expected to improve access to loans for micro, small and medium businesses, expand savings services for the general population, and increase financial penetration in one of the world’s poorest countries, thus contributing to private sector development, job creation, and the economic growth. It is also expected to play an important role in encouraging further foreign direct investment in the financial sector of the DRC.
The project is fully aligned with MIGA’s top priorities to support investments into IDA-eligible countries and fragile and conflict-affected situations. The project will also complement the efforts of the World Bank Group to develop the financial sector in a country that suffers from extremely limited access to finance.