Blue Financial Services Limited

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_x000C_Founded in 2001, Blue Financial Services Limited (Blue Financial or the company) operates in South Africa, Botswana and Zambia. Blue Financial along with its subsidiaries, Blue Incremental Home Loans and Blue Cell, and its associate company Greenstart Home Loans, is a leading consumer finance company which provides innovative and affordable credit solutions to its clients. The company has a network of 35 branches (10 in South Africa, 12 in Botswana, 10 in Zambia, 2 Tanzania and 1 in Uganda) and employs more than 300 staff members. In the next five years, the company plans to open more than 60 new branches. During the year, Blue Financial made an application to be listed on the Alternative Stock Exchange (AltX) of the Johannesburg Stock Exchange (JSE) and it received permission to list on the ALTX after meeting all the requirements. The company listed its shares on October 12, 2006 at a price of ZAR1 per share and as of November 9, 2006 the share price had increased to ZAR3.55 per share.The proposed project consists of an IFC investment of up to $20 million equivalent in the company consisting of: - an equity investment of up to $10 million equivalent in newly issued common shares representing up to 10% of the company''s common shares; and - a senior loan of up to $10 million equivalent. The IFC investment of up to $20 million is the revised IFC investment and initially, the proposed project consisted of a $10 million senior term loan. The IFC investment in Blue Financial Services Limited will be used to support the company’s consumer lending business in the Southern Africa region. Due to the staged growth in the total shareholders funds of the company, exposure on IFC’s proposed project will be limited to 50% so that it is in line with IFC’s investment guidelines.