KIF Loan 2020 International Finance Corporation (IFC) is proposing to extend an up to US$5 million senior loan facility with revolving feature, comprising of a loan of up to $2.5 million from IFCs own account (the A Loan) and a loan of up to $2.5 million from IFC in its capacity as the Implementing Entity of the IDA-PSW BFF (the IDA-PSW BFF Loan), for a total tenor of up to four years to Kaebauk Investimentu no Finansas, SA (KIF or the Company). KIF is the largest micro finance institution (MFI) in Timor-Leste. The project exhibits strong fit with IFC's and World Bank Group (WBG) strategic priority in Timor-Leste to accelerate private-sector led growth in the non-oil economy to drive job creation and inclusion through improved productivity in agribusiness and deepening inclusion. The proceeds will be used by the Company to develop its agri-financing business targeting farmers and supply chain participants in the agri-sector with prioritization to women borrowers.  KIF is a valued client of IFC since 2013 and was formerly known as Tuba Rai Metin (TRM), a leading non-governmental organization (NGO) MFI. The Company went through a transformation to become a regulated MFI during 2013-2016 and after obtaining Other Deposit Taking Institution (ODTI) license in Mar-16, KIF was instituted as TRMs subsidiary and the microfinance operations of TRM were transferred to KIF. IFC had been contributing an instrumental role during the transformation process. The Company provides inclusive financial services primarily to poor rural Timorese women and small businesses, supported by nationwide presence across all TLs 13 districts and more than 300 employees serving more than 14,000 clients as of December 2019 with a strong gender focus with more than 70 % of the clients being women. The expected development impacts of the Project are as follows: (1) Market creation and demonstration effect: The proceeds from the facility will be used by KIF to grow its agri-financing business, a product that is at a nascent stage in Timor-Leste despite the importance of the sector to the country's non-oil economy and large gap. IFC anticipates that the Project, along with a holistic approach between IFC's investment and advisory services cutting across sectors to complement this Project, will enable the development of systemic changes to existing markets that deliver sustainable development impact by creating "Farming-to-Financing" model with the ultimate objective to promote the livelihood of the agri-sector participants from subsistence economy to market economy. Based on KIF's reputation as the leading and trusted MFI in the country, the Project is also expected to have a demonstration effect and encourage the replication of "Farming-to-Financing" model by other financial institutions; (2) Deepening financial inclusion among agri-players: The Project is expected to address the significant financing gap faced by smallholder farmers in Timor-Leste through agri-financing and developing supply chain solution for agri related economy activities to improve the productivity of the smallholder farmers, which is expected to increase the flow of bankable agri-financing and further deepen financial inclusion among agri-players; (3) Improve financial access for women micro-borrowers: The Project will support KIF to grow its agri-financing portfolio while at the same time continue supporting the Company's strong gender focus in expanding its reach to women borrowers, which are still facing financial constraints in Timor-Leste; (4) Promote gender equality in the workplace: In line with the country's high level of gender gap, the nature of the business model and operational impediment to women to assume certain roles have made it challenging for KIF to achieve gender equality in the workplace. Through this Project, KIF is encouraged to develop action plan to address the gender-based job segregation, which have been identified as the key to improve gender equality in the workplace.