MFP-CFLG-4G CAP

pending

The proposed investment is an unfunded risk-sharing facility structured as a financial guarantee between IFC and Fourth Generation Capital Limited (“4G”) in Kenya. It will provide first- and second-loss coverage for a new loan portfolio of up to $44.4 million (local currency equivalent) to eligible micro, small, and medium enterprises (MSMEs) with a focus on microenterprises and women-owned microenterprises. The first-loss amount will be up to US$2.2 million equivalent. Of this, IFC—acting for its own account and supported in its role as Implementing Entity of the IDA20 IFC-MIGA Private Sector Window Blended Finance Facility (“IDA PSW BFF”)—will cover up to US$2 million equivalent, while 4G will covers the remainder. The second-loss tranche of US$42.2 million equivalent will be shared on a pari passu basis, with IFC’s exposure capped at US$4.2 million equivalent and the remaining balance borne by 4G. Thus, IFC's maximum overall risk amount under the Facility will be up to US$6.2 million equivalent, representing the aggregate of the IFC first loss maximum risk amount and the IFC second loss maximum risk amount. IFC's first loss catalytic investment will provide support in helping to unlock core mobilization of a minimum of 21x and help scale up lending for MSMEs in Kenya (the Project). The Project will be processed under the Catalytic First Loss Guarantee envelope (“Catalytic FLG” which forms part of the MSME Platform), to expand lending to higher-risk and underserved MSME segments, thereby promoting financial inclusion and contributing to a more inclusive and resilient MSME ecosystem. The Catalytic FLG benefits from the support of IDA PSW BFF in PSW eligible countries, including Kenya. IDA PSW BFF was created by the Word Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict affected states.