Banco Mercantil S.A. - Credit Line

completed

Summary Of Project Information (SPI)Project NameBolivia-Banco Mercantil S.A. (“Mercantil”)     RegionLatin America and CaribbeanSectorProject No005126Projected Board DateMarch 15, 1996Company NameBanco Mercantil S.A.Technical Partner and/or Major Shareholders Mr. Javier Zuazo, the Chairman of Banco Mercantil, controls about 75 percent of the company’s shares. Six executives own a combined 17.44 percent, while two other members of the Board of Directors own a combined 3.70 percent. The remaining shares are owned by various Bolivian institutional and individual investors.Project Cost Including proposed IFC investment Project cost: US$10 million. The IFC investment will consist of a US$10 million line of credit. Location of project and Description of site Different locations in Bolivia.Description of Company and Purpose of Project Founded in 1906, Mercantil is a full-service commercial bank with an established track record of long-term lending to domestic private sector companies. Currently, it ranks as Bolivia’s fourth-largest private bank (out of 19), with assets of approximately US$407 million. Mercantil has a wide geographic presence, with stable and diversified deposits and loans. The proposed IFC credit line to Mercantil is for on-lending to small and medium-scale private productive enterprises in Bolivia. IFC will also provide technical assistance and training to strengthen Mercantil’s term lending capabilities and help it adopt prudent credit, loan provisioning, liquidity risk management, and environmental policies. While modest in amount, the credit line would address the shortage of US dollar medium-term financing to small and medium-scale enterprises in the Bolivian industrial and service sectors.Environmental Category and Issues This is a Financial Intermediary (FI) category project under IFC’s environmental review procedure. Mercantil will be required to undertake an environmental review of eligible borrowers’ environmental performance and each sub-project’s compliance with national and local environmental, health and safety requirements as well as applicable World Bank policies and guidelines. Date SPI sent to PIC February 28, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365