INCOFIN SME Financing Agreement

For inquiries and comments to IIC, contact:
IIC’s Communications Group
E-mail: divulgacionpublica@iadb.org

For project inquiries, including environmental and social questions related to an IIC investment, please contact the client or the IIC using the contact information provided above. In addition, project affected communities have access to the IIC Independent Consultation and Investigation Mechanism.
Tel:+1 (202) 623-3952
Fax: +1 (202) 312-4057
Address: 1300 New York Ave. NW Washington, DC. USA. 20577
E-mail: mecanismo@iadb.org or MICI@iadb.org

Project Number: 
12093-01
Expected Consideration Date by the Board: 
12/05/2017
Date Posted: 
10/12/2017
Company: 
Incofin S.A.
Financing Requested: 
Hasta US$10 millones
Sector: 
Financial Markets
Environmental and Social Category: 
FI-3
Location: 
Chile
Country: 
Scope Objective: 

The proposed operation consists of a credit facility for up to US$10,000,000, for which there will be a period of up to five years during which disbursements may be made in the form of unsecured revolving loans with terms of up to one year. The Project’s objective is to finance small and medium enterprises (“SMEs”) through factoring and financial leasing operations in Chile.

Environmental Review: 

1. Project Description. Incofin’s main business is factoring, effected through various instruments such as invoices, checks, promissory notes, letters, and other instruments. The company entered the financial leasing business in mid-2012 through its subsidiary Incofin Leasing.

2. Environmental and Social Categorization and Rationale. This operation is classified as a Category FI-3 operation given that the use of funds from this Loan presents a low risk.

3. Environmental and Social Risks and Impacts. Incofin’s financing operations are short-term; thus, the company seeks to require compliance with local and international environmental and social (“E&S”) regulations and standards ratified by the Chilean government. The company works with about 1,100 factoring clients and 400 financial leasing clients.

4. Mitigation Measures/E&S Action Plan. Incofin implemented an Environmental and Social Management System that seeks to reduce the credit risk of its loan portfolio by evaluating its clients’ level of social-environmental risk, applying IIC exclusion list, and also excluding clients that fail to comply with environmental and labor legislation, as well as those that present a high environmental and social risk.