Hero Fincorp TW (IFC-44200)

Regions
  • South Asia
Geographic location where the impacts of the investment may be experienced.
Countries
  • India
Geographic location where the impacts of the investment may be experienced.
Specific Location
New Delhi
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
U
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
May 7, 2021
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
HERO FINCORP LTD
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Transport
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 100.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 100.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Jul 22, 2021

Disclosed by Bank Apr 7, 2021

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the bank documents, the proposed investment comprises a secured debt investment of up to US$100 million in Hero Fincorp Limited (HFCL or the Company). HFCL’s core business lies pre-dominantly in the provision of financing two-wheeler loans and micro, small and medium enterprises (MSME) loans to clients in low-income states (LIS) of India. Its consolidated loan portfolio composition includes two-wheeler finance (37%), used car finance (7%), personal loans (11%), home loans (6%), MSME loans (21%) and corporate loans (18%).The proposed Project will allow HFCL to expand its two-wheeler financing to self-employed individuals or MSME borrowers (largely micro & small enterprises) in the low-income states (LIS) of India. The Company will also deploy three times the IFC loan amount, through its own resources and other sources of funding, towards the same target beneficiaries over the next 3 years.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

The investment comprises a secured debt investment.

Role of IFC:

1) Financing structure: derived through provision of long tenor, counter-cyclical financing, less easily available in a difficult market environment due to COVID-19, thus helping the Company diversify its borrowings profile. 2) Risk mitigation: IFC investment would signal comfort for capital providers and operational partners as the company positions for growth

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

HFCL is part of the Hero Group of companies in India (promoted by the Munjal family). The shareholders of HFCL include: Hero MotorCorp Limited (HMCL, 41.2%), investment companies of the Munjal family (38.3%), Credit Suisse (2%), Chrys Capital (10%) and Apis Growth (2%) and HFCL's dealers/employees (6.5%).

HMCL is the largest operating company of the Hero Group and is the largest two-wheeler manufacturer in the world (in terms of unit volumes), for the last 19 years with operations in 40 countries.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

No contact information given at the time of disclosure.

ACCESS TO INFORMATION

You can submit a request for information disclosure at: https://disclosures.ifc.org/#/inquiries

If you believe that your request for information from IFC has been unreasonably denied, or that this Policy has been interpreted incorrectly, you can submit a complaint at the link above to IFC's Access to Information Policy Advisor, who reports directly to IFC's Executive Vice President.

ACCOUNTABILITY MECHANISM OF IFC/MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org

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