Fichosa Sub-debt Partnership (IIC-12000-02)

Countries
  • Honduras
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • IDB Invest (IDBI)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Bank Risk Rating
FI
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
Dec 13, 2016
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
Banco Financiera Comercial Hondureña S.A. (“Ficohsa”)
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Amount (USD)
$ 18.00 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 @ IIC website

Updated in EWS Aug 23, 2018

Disclosed by Bank Nov 2, 2016

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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 Inter-American Development Bank Invest (IDB Invest), formerly the Inter-American Investment Corporation (IIC), the proposed Ficohsa Sub-debt Financing Partnership (the "Project") will contribute to increasing access to finance for small and medium enterprises ("SME") in Honduras, including women-led SMEs. The Project entails a subordinated financing of up to US$12 million from IDB Group and up to US$6 million from the China Co-financing Fund for Latin America and the Caribbean to Banco Financiera Comercial Hondurena ("Ficohsa"), which will strengthen Ficohsa's capital structure and support its continued expansion in the SME sector. The financing is expected to be complemented by an additional US$12 million subordinated financing from OFID. By partnering with Ficohsa, one of the leading private-sector banks in the country, the financing supports the bank's strategic goals in SMEs and women banking in Honduras.

The stated aim of the partnership is to provide medium term funding to SMEs, including women-owned businesses, and the IIC estimates there are likely to be minimal to moderate indirect environmental, social or health and safety (ESHS) and labor impacts and risks. Ficohsa’s SME portfolio is concentrated in commerce, services, and higher risk investments in agriculture and manufacturing. The country context of Honduras presents complex environmental and social issues, which can affect sub-loans directed towards larger corporate energy and agriculture borrowers, which the IIC says are not eligible under this operation.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.

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.

ACCOUNTABILITY MECHANISM OF IIC

The Independent Consultation and Investigation Mechanism (MICI) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an Inter-American Development Bank (IDB) or Inter-American Investment Corporation (IIC)-funded project. If you submit a complaint to MICI, they may assist you in addressing the problems you raised through a dispute-resolution process with those implementing the project and/or through an investigation to assess whether the IDB or IIC is following its own policies for preventing or mitigating harm to people or the environment. You can submit a complaint by sending an email to MICI@iadb.org. You can learn more about the MICI and how to file a complaint at http://www.iadb.org/en/mici/mici,1752.html (in English) or http://www.iadb.org/es/mici/mici,1752.html (Spanish).

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How it works