Multibank Colombia

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 IDB Invest investment, please contact the client or IDB Invest using the contact information provided above. As a last resort, affected communities have access to the IDB Invest 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: 
12175-01
Expected Consideration Date by the Board: 
05/31/2018
Date Posted: 
04/09/2018
Financing Requested: 
Up to COP$14.000.000
Sector: 
Financial Services
Environmental and Social Category: 
FI-2
Scope Objective: 

Banco Multibank S.A. is a Colombian bank established in 2015 with the objective of specializing in the financing of small and medium enterprises. The objective of this Project is to support Banco Multibank in a bond issue of COP$40,000.000 through a partial credit guarantee of up to COP$14,000.000. The bond issue will be registered in the Colombian Stock Exchange with a tenor up to three years.

The Guarantee is unconditional and irrevocable and will allow the issuer to upgrade from a local AA rating to AA+. The proceeds from issuance will be used to provide financing to eligible small and medium-sized Colombian Enterprises in a variety of productive sectors.

Environmental Review: 

1. Overview of Scope of IIC E&S Review The environmental and social review of the proposed transaction was carried out through desk research of pertinent information from the client. This included a review of basic credit procedures applied by Multibank.

2. Environmental and Social Categorization and Rationale The portfolio of SME loans is considered low to medium risk, given the concentration in commerce and services (54%,) with some investments in higher risk sectors, such as small-scale manufacturing (25%) and construction (5%). Therefore, per the IIC’s Environmental and Social Sustainability Policy, this Financial Intermediary (“FI”) operation has been categorized as FI-2.

3. Environmental and Social Risks and Impacts The environmental and social risks relate to activities undertaken in higher risk sectors, namely small-scale manufacturing, construction, and agriculture.  These risks can relate to occupational, health and safety, water, land and air pollution, land conversion, generation of wastes, use of hazardous substances, and transport-related impacts, among others.  Multibank has not previously evaluated environmental and social risks in its credit process. 

4. Mitigation Measures Multibank will be required to evaluate, manage and monitor environmental and social risks through the application of an Environmental and Social Management System (“ESMS”). The ESMS will contain a policy statement, the IDB Invest Exclusion List, a matrix for categorizing risk, procedures for undertaking environmental and social due diligence, an action plan template for remedying high risks identified, specific legal clauses for incorporating into a loan agreement, and monitoring procedures.  Multibank will additionally assign responsibility for management of E&S risks to a given manager, and will take part in an IDB Invest (or equivalent) training on environmental and social risk management.

5. E&S Action Plan The below E&S Action Plan will be a requirement of IDB Invest’s financing.

Task

Description

Development of an ESMS

Multibank will develop and implement, with the support of a consultant, an ESMS consistent with the requirement of IIC’s Sustainability Policy.  The ESMS will align with Multibank Panama’s existing ESMS and will be implemented no later than nine months after signing.  A road map for implementation will be presented at signing.

Nomination of E&S Manager

Multibank will nominate an E&S Manager to oversee all issues related to the identification, management and monitoring of E&S risks.

E&S Training

The selected manager will attend the IDB Invest (or equivalent) Environmental and Social Risk Management training. 

 

Contact Information: 

For inquiries about the Project, contact:  

Client Contact Name: Marcela Bernal Peña
Title: Gerente de Tesorería
Phone number: (571) 608 00 33 Ext: 8313
email address: marcela.bernal@multibank.com.co