Banco Agrícola - PYMES
The Project consists of a total financing package of up to US$30 million to support the small and medium enterprises (“SMEs”) strategy of Banco Agrícola, S.A. (“Banco Agrícola”). The Inter American Development Bank Group (“IDB Group”) will participate through an unsecured A Loan of up to US$18 million with a four year term and includes the participation of B Lenders for up to US$12 million.
The purpose of the Loan is to provide medium-term financing to support the growth of Banco Agrícola’s SMEs portfolio. In the last year, Banco Agrícola has worked to strengthen its portfolio of services and support model to this segment with the purpose of strengthening its positioning as a strategic partner of SMEs. Banco Agrícola currently serves more than 35,000 SMEs with a particular focus on commerce and services sectors.
1. General description of the IIC Environmental and Social (“E&S”) Review. The Inter-American Investment Corporation (“IIC”) assessed Banco Agrícola’s ability to manage the environmental and social risks of the SME portfolio that will be financed with IIC funds. The evaluation was conducted in October 2017 based on a review of relevant client documentation.
2. E&S and social classification and rationale. This is a category FI-3 project according to the IIC Sustainability Policy due to the low risk and size (average of US$12,000) of subprojects in Banco Agrícola’s current or future portfolio. The sectoral breakdown of the SME portfolio is as follows: Housing (44%), Trade (22%), Services (13%), Family Consumption (11%), and Others (10%).
3. Environmental and social risks and impacts. Banco Agrícola has an Environmental Management Policy and System since 2009. The system and policy primarily establish the procedure for identifying and managing risks in operations larger than US$500,000 with environmental category “A,” meaning high environmental and social risk. In the context of the definition of a new Corporate Policy for the Analysis of Environmental and Social Risks of the projects and operations financed by Grupo Bancolombia, to which Banco Agrícola belongs, a new updated policy is expected to be implemented in 2018. Grupo Bancolombia has also adopted the Ecuador Principles. In the context of environmental and social due diligence, Banco Agrícola also uses a social-environmental management questionnaire for companies with exposure between US$250,000 and US$500,000 with environmental risk categories A and B. This only serves to describe the environmental and social management system in force at Banco Agrícola. It is important to emphasize that with IIC funds, Banco Agrícola will not be able to develop subprojects with high environmental and social risk, as such subprojects will be excluded.
Banco Agrícola has already been an IIC client in an earlier operation. Therefore, there is a track record with respect to monitoring and reporting by the institution, which has been adequate. The institution has an adequate complaints and claims mechanism for clients (holders of products or services). Banco Agrícola must expand this method to include all types of complaints or suggestions from anyone in the community who might wish to express an opinion regarding an operation with the Bank.
4. Mitigation measures/Environmental and social action plan. Banco Agrícola must ensure that all loans granted with IIC funds comply with the IIC List of Exclusions, applicable national environmental and social standards, and the IIC Sustainability Policy. Banco Agrícola must expand its claims mechanism to receive complaints from any member of the community, not just from its clients.
For inquiries about the Project, contact:
Client Contact Name: Mauricio Rivas
Title: Correspondent Bank Manager
Phone Number: +(503) 2267 5383
E-Mail Address: MaurRiva@bancoagricola.com.sv