Project detail - IMF BAOBAB RDC SA

Who is our prospective customer?

IMF Baobab RDC S.A. ("Baobab") is a microfinance institution providing micro-loans and SME loans up to USD200K to businesses in urban areas with individual liability. Baobab is operating in the DRC with ten branches (five in Kinshasa, two in Lubumbashi, one each in Kikwit, Bukavu and Kolwezi). Baobab is part of the Paris-based Baobab Group (“Group”), active in MSME lending in several African countries. Baobab Group's mission is to “broaden access to funding among those underserved by traditional banks”.

What is our funding objective?

The funds will be used for on-lending to micro and SME companies, who are underserved in the DRC.

Why do we want to fund this investment?

The financing fits very well into FMOs Reducing Inequalities strategy, which is focused on improving access to finance. The RI label is applicable.

What is the Environmental and Social categorization rationale?

This facility has been categorized as category C in accordance with FMO's Sustainability Policy. The lending activities, primarily to small business in trade and services in urban areas, do not create any exposures in high-risk E&S sectors. FMO analyses risks from different perspectives and assessments. In the case of microfinance investments, the E&S classification is typically low because the exposure generally is limited to retail and micro-entrepreneurs. The risks that might come with microfinance investments, such as over-indebtedness, transparency of interest rates, responsible pricing, etc., are covered by FMO in other assessments, such as Client Protection Principles (CPPs).