Investment process

MIDF’s decision and investment process for providing financing to eligible beneficiaries is depicted in the below chart.

GENERAL MIDF DECISION & INVESTMENT PROCESS
MIDF’s investment process is streamlined to add a maximum value for both the participating banks and the beneficiaries.

For risk participation instruments, the investment process consists of four main phases, which ensure a fast and efficient credit approval process:

1. Preliminary phase

The participating bank identifies the investment project for MIDF financing. MIDF’s technical assistance consultants (Technical Assistance) support the participating bank in scoping the project and starting further project preparation. Once a project has been confirmed as eligible for MIDF financing, the second phase can be pursued.

2. Transaction appraisal phase

The participating bank and the beneficiary draw on the technical assistance expertise provided by qualified engineers and investment specialists. Consultants support the participating bank in studying the technical, financial, social and environmental feasibility of the project. Additionally, the beneficiary can be supported in preparing a financing tender in compliance with requirements tailored to the local legislation.

3. Financial close phase

Once the project is fully prepared, the beneficiary launches the tender for project financing and the participating bank submits a financing bid. If the bid is successful, the participating bank negotiates the loan documentation with the beneficiary, independently from MIDF. Following credit approval at the participating bank, the loan proposal is submitted to MIDF’s Investment Committee for final approval.

4. Post signing monitoring phase

The participating bank performs the post-signing monitoring of the loans in line with banking standards such as maintenance of a credit file, review of project implementation, procurement and environmental/social monitoring. MIDF assists the participating banks during the monitoring process as needed.

For credit line instruments, MIDF does not approve individual loans which are made independently by the participating bank after careful assessment according to their own procedures. However, this process might be supported by technical assistance on a needs basis.