DCM NSIA ABS The proposed project consists of a securitization of loans originated and serviced by NSIA Banque Cote dIvoire (NBCI or the Bank). Under the Project, IFC will purchase up to XOF17.5 billion local currency-denominated asset-backed securities (the ABS) to be issued by a Fonds Commun de Titrisation de Créances, a securitization special purpose vehicle (the SPV) incorporated in Côte dIvoire. The ABS will have a scheduled maturity of up to 5 years and will be placed publicly (Appel public à lEpargne) and listed on the BRVM, the regional stock exchange. The issuance will be rated, and the proceeds will be used by NBCI for on-lending to small and medium enterprises (SMEs).  The Project will be supported by the Local Currency Facility of the IDA18 IFC-MIGA Private Sector Window (IDA PSW LCF), created by the World Bank Group and implemented by IFC, to catalyze private sector investment in IDA countries, with a focus on providing long-term local currency investments in countries where capital markets are not developed and market solutions are not sufficiently available.   In addition, IFC as implementing entity of: (i) IDA PSW LCF would provide up to [US$1.32 million] to mitigate the risk associated with the USD/XOF cross-currency swap, and (ii) the Global SME Facility is expected to provide a performance based incentive of up to 25 basis point of the IFC investment amount in the form of a rebate payment to incentivize the client to expand its on-lending to SMEs in Côte d'Ivoire (the Rebate Incentive). IDA PSW LCFs support under this Project will enable IFC to provide the long-term local currency financing needed to unlock financing for SMEs by supporting the development of asset backed securities, a new asset class in the WAEMU capital markets, starting with Côte d'Ivoire. In addition, the Rebate Incentive to be provided by the Global SME Facility will incentivize the client to expand its SME lending.  In aggregate, the level of concessionality (i.e., subsidy) of US$1.78 million to be provided by IDA PSW LFC and the Global SME Facility is estimated to be 2.66% of the Banks ABS issuance of US$67 million. In the case of the Global SME Facility, the estimate is based on the assumption that the Project will fully achieve the agreed stretch targets and shall only be paid out upon achievement of such pre-defined targets. Further details and historical information on estimated subsidy levels in IFCs blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all of IFCs blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017.  Further information on these Enhanced Principles and IFCs blended finance approach and governance can also be found at:  www.ifc.org/blended finance Project Outcome: Increased Access to Finance for SMEs. The Project is expected to increase access to finance for SME as it will help NBCI scale up its lending towards SMEs, which in turn is expected to drive economic growth and job creation.
Market Creation: IFC's role as an anchor investor is expected to provide comfort to investors, mostly regional institutional investors, on the new asset class being introduced, not only for the successful completion of the transaction but also for future investment in similar ABS issues. In addition, the successful completion of the ABS issue anchored by IFC is expected to demonstrate that capital markets can be leveraged by commercial banks to raise much needed long-term funding for SME lending.