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This Summary of Project Information is prepared and distributed to
A Documents Project Database FAQ Project
the public in advance of the IFC Board of Directors’ consideration of
Features IFC Procurement Contacts
the proposed transaction. Its purpose is to enhance the transparency
of IFC’s activities, and this document should not be construed as
presuming the outcome of the Board decision. Board dates are
estimates only.
Summary of Project Information (SPI)
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Project number 23919
Project name Factoring Egypt
Country Egypt
Sector Finance & Insurance
Department Reg Ind, Financial Markets, EMENA
Company name Egypt Factors
Environmental category C
Date SPI disclosed February 2, 2005
Projected board date March 30, 2005
Status Active
Previous Events Invested: August 17, 2006
Signed: June 2, 2005
 Approved: March 30, 2005
Project sponsor and major shareholders of project company
Commercial International Bank –

CIB was established in 1975 as a joint venture between National

Bank of Egypt and the Chase Manhattan Bank. In 1993 CIB was listed
in the local exchange and subsequently privatized. CIB’s shareholders
as of November 2004 are as follows:

Shareholding
Individuals (all less than 1%) 25.3%
Foreign Fund Managers 22.5%
National Bank of Egypt 18.8%
Bank of New York’s GDRs 17.4%
Private Sector 5.6%
Public Sector Companies 4.0%
Government entities 3.2%
IFC 3.2%

Total 100%

CIB’s core market segment has traditionally been large corporations

and it is currently the largest private bank in Egypt. The bank has
followed a good credit policy, tight cost control procedures, a
thorough training program and employs high quality staff. With a
strong brand name and market position, the Bank has successfully
invested in other JVs ranging from insurance, corporate finance,
leasing, asset management and brokerage activities and is now
expanding into retail lending. CIB is the highest rated Egyptian bank
by the biggest International Rating Agencies: Standard and Poor’s
(S&P) assigned CIB a rating of BB+/Negative/B, Moody’s a rating of
Ba2 and Capital Intelligence a rating of BB+/Negative/B. This rating
represents the national (sovereign) ceiling for Egypt.

First International Merchant Bank –

FIMBank was established in 1994 by Kuwaiti Interests for Financial

Investments (KIFFI) together with a group of institutional investors.
The Bank is registered under the laws of the Republic of Malta and
was granted its banking license in November 1994. The license
enables FIMBank also to conduct full banking activities in all
currencies, except the Maltese Lira. The bank is supervised by the
Maltese Financial Services Authority (MFSA). Fitch Ratings assigned
FIMBank a long-term FCY rating of BB with a stable outlook.

As of June 2004 FIMBank’s shareholders are as follows:

Shareholding
Global Financial Holdings NV Kuwait 23.63%
Kuwaiti Interests for Financial Investment KSC Kuwait 26.08%
Mohammed Ibrahim Marafie Kuwait 5.30%
Astrolabe General Trading Contracting Co. Kuwait 6.52%
Kuwaiti Consulting and Investment Company KSC Kuwait 3.03%
Mehdi Ouazzani Hassani Morocco 3.03%
Fouad M T Alghanim 3.03%
Bank of Valletta plc 9.46%
Other private individual and corporate holdings 19.92%
Total 100.00%

FIMBank's core activities include international trade finance, including

ship scraping finance, trade finance for banks and trading companies,
and commercial lending to trade-related customers. While FIMBank
operates from Malta, it has also promoted its services through a
representative office in London and through regional business
representatives in New York, Sao Paulo, Istanbul and Moscow.

Total project cost and proposed IFC investment

The projected growth of the company’s operations estimates that the
total capital required by the company will be $15 million. IFC’s
shareholding of 20% will correspond to a total investment amount of
$3 million. The disbursement of the equity investment will be
staggered over a period of four years – to match the growth in
volume of new business.

Location of project and description of site

The company’s offices will be located in Cairo, Egypt.

Description of company and purpose of project

The proposed project involves establishing a non-bank finance
institution (the company) that will provide factoring and forfaiting
(exclusively for trading purpose) services for export-oriented
businesses in Egypt. The initial capitalization of the company is
expected to be $5 million and will be expanded to $15 million by the
end of its fourth year. The sponsors of this project include First
International Merchant Bank (FIMBank) as a 40% equity investor,
Commercial International Bank Egypt S.A.E. (CIB) as a 40% equity
investor, and IFC holding the remaining 20% of the company’s
shares. FIMBank will play the key role as technical partner
capitalizing on its international expertise in factoring. CIB will bring
its local market expertise and client base into the new venture by
leveraging on its existing market presence. The company plans to
start its operations with international factoring representing between
50-60% of the total business volume, and the rest divided between
local factoring and small-ticket forfaiting. Initially, the company will
fund itself through equity, going forward other funding sources will be
sourced at the local level.

The project would create Egypt’s first factoring company and is

expected to cater to the needs of Egyptian exporters who currently
require additional liquidity to fund their growing business needs. With
38% of Egyptian exports flowing to the United States and Europe
(countries with significant factoring activity), Egypt’s export-oriented
firms would be ideal for export factoring, given the exporters’ short-
term financing requirements and the relatively lower importer risk.
The company would aim to be a one-stop-shop for exporters in Egypt
and is expected to have a strong positive impact by enhancing the
level of credit being made available to exporters in Egypt.

Environmental and social issues - Category C

This is a category C project according to IFC's environmental and
social review procedure. There will be minimal environmental and
social impacts associated with this project. Therefore, no further
environmental or social analysis is required.
 To contact the project company, please write to:
Adel Meer – ameer@ifc.org
International Finance Corporation
2121 Pennsylvania Avenue
Washington DC 20433

Overview of Construction Receivables Factoring Finance Program

The construction receivables factoring program is designed for subcontractors in the construction
industry who perform work for general contractors with good credit. It can also be used by contractors
whose business or government customer or client has good credit. This program allows subcontractors
and contractors to acquire working capital from invoices they have submitted for completed work. The
working capital acquired in this way can be used to pay employees, make tax withholding payments,
buy materials for another project, take advantage of cash or quantity discounts for materials, or buy
equipment.

You should consider using this program if slow payment from your general contractors or customer is
preventing your company from taking advantage of new business, or is just making it difficult for you
to stay in business. With this program you can concentrate on growing your business rather than
worrying about when you are going to get paid for the work you have already done. Once your account
is set up, you can get an advance of up to 70% for completed work in as little as 24 to 48 hours.
Compare this with weeks you would normally wait to get paid.
The types of subcontractors that can take advantage of this program include but are not limited to the
following.

• carpenters
• roofing
• flooring and carpet
• plumbing
• HVAC
• underground utilities
• electrical
• tile
• fire sprinkler
• steel fabricators
• landscapers
• excavators
• ceiling and drywall
• paving
• security
• engineers
• architects
• appraisers
• inspectors
• supply houses
• space planners

The following table summarizes the key features of the construction receivables factoring funding program.
Program Feature
Preferred Client
Type of Financing
Minimum Invoice Volume
Maximum Invoice Volume
Credit Worthiness
Funding Time
Advance Rate
Fees on the Face Value of the
Invoices
Fund progress payments?
One time due diligence fee
Personal Guarantee Required
Explanation of Program Feature
Subcontractor or contractor doing work for a customer or client with good credit.
Work must be done on commercial or development projects. Home improvement
projects for consumer clients is not covered by this program.
Invoices are being purchased at a discount. This is not a loan. You are not
creating new debt with this program.
None but there is a $250 minimum discount per transaction. A preferred
minimum is about $10,000 per transaction.
None (based on the credit worthiness of the customer or client)
Funding decision is based on credit worthiness of the subcontractor's or
contractor's customer
Initial transaction takes 5 to 7 days because of the due diligence checks. After
that funding can be done in 24 to 48 hours after the invoices are presented.
Deposit of funds can be done via a wire transfer.
Up to 70% of the invoiced amount less the retainage amount
4% for the first 30 days. 1% for each 10 days thereafter
Yes
This varies (depends on the underwriter) from no fee up to a fee of $750 (used
for account setup processing and UCC and Dun and Bradstreet reports) (This is
requested after the underwriting company has determined that they are
interested in pursuing a financing relationship with the client, but it does not
guarantee that they will advance on all invoices).
sometimes
 This is a non-recourse program meaning if the general contractor does not pay
Type of recourse the invoice due to credit problems, the subcontractor is NOT responsible to repay
the advance.
The funding company must be able to obtain a first position lien on all assets. A
Lien Position
blanket UCC-1 is filed.
Excluded contractors Home remodeling contractors cannot be funded.

Advantages of this program:

• fast and easy

• no long term contracts to sign
• improves availability of working capital
• may allow access to cash or volume discounts for materials
• may allow you to take on new business
• limited only by ability of the subcontractor to generate new invoices for work done
• does not depend on subcontractor's credit rating
• protect or improve your credit rating by paying your bills sooner
• does not create new debt
• does not give up equity interest in the subcontractor's or contractor's company
• no personal guarantees in some cases
• allows credit terms to be offered to clients or customers
• get credit reports on prospective customers and continuous monitoring of the credit status of existing
customers
• assistance with collections
• invoices can be presented for advance part way through the payment cycle to reduce the fees (e.g. submit
an invoice that normally would be paid in 90 days at day 50 in order to cut the fees in half)
Example:

An electrical subcontractor has completed work on a project where the invoiced amount is $100,000. The contract
specifies that 10% will be held back as retainage to allow for correction of defects in the work performed. The
contract also says that payment terms are net-60. The electrical subcontractor cannot wait 60 days to receive
payment because cash is needed to pay the subcontractor's employees. The electrical subcontractor decides to
seek accounts receivable factoring under the program described above. The underwriting company reviews the
application from the subcontractor and credit worthiness of the general contractor, and decides to advance 60% of
the invoiced amount less the amount held for retainage. The following table shows how the numbers work out for
this example.

Invoiced Amount $100,000

Amount Held for Retainage (10%) $10,000 (Computed as 10% of $100,000 = $10,000)
Amount Used to Compute Advance $90,000 (Computed as : $100,000 - $10,000 = $90,000)
Advance Percentage 60%
Amount Advanced $54,000 (Computed as: 60% of $90,000 = $54,000)
7% (Computed as 4% for the first 30 days and 1% for each of the
Fee percentage
next 3 10-day periods)
Fees for 60 day advance $7,000 (Computed as: 7% of $100,000 = $7,000)
Amount Rebated To Subcontractor When The
$29,000 (computed as: $90,000 - $54,000 - $7,000 = $29,000)
Invoice Less Retainage Amount Is Paid
Total Amount Received By The Subcontractor $93,000 (Computed as: $54,000 + $29,000 + $10,000 = $93,000)
After All Defects Are Corrected And The Full
Retainage Amount Is Paid To The
Subcontractor.

If you are subcontractor or contractor who needs working capital to grow your business or just to stay in business,
and you have invoices for completed work on which you are awaiting payment from a customer with good credit,
then please contact us today to see if this program would be a good fit for your company.
 A PROJECT REPORT
ON
(Study of Cash management at Standard Chartered Bank)

SUBMITTED IN THE PARTIAL FULFILLMENT OF

DEGREE OF BACHELOR IN BUSINESS ADMINISTRATION2006-09

2006-09
Guided By: Submitted by:
Mrs. Jyoti Goel Mr. Avnish Mehra
(Project Guide)

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES

(Aff. to Guru Gobind Singh Indraprastha
University)

CERTIFICATE
This is to certify that the summer training project (MS/BBA-CODE) entitled Study of cash
management at Standard Chartered Bank done by Mr. Avnish Mehra, Roll No. 1371591706 is
an authentic work carried out by her at Rukmini Devi Institute of Advance Studies under my
guidance. The matter embodied in this project work has not been submitted earlier for the award
of any degree or diploma to the best of my knowledge and belief.

Date:
Mrs. Jyoti Goel
(Project Guide)
RDIA
 ACKNOWLEDGEMENT

I sincerely record my appreciation to all, who have contributed in preparing this report with
suggestions and critical evaluation. I am extremely thankful to Mr. AMIT AGGARWALA
(Associate Director, standard chartered) who zestfully monitored the growth of this project. He
from time to time guided me in the right direction and took care that I had enough time to
complete my project. As an amateur in this field I am indebted to those who have readily
responded to my request for expert guidance

( )
AVNISH MEHRA

ABSTRACT

In a business anything done financially affects cash eventually. Cash is to a business is

what blood is to a living body. A business cannot operate without its life-blood cash, and without
cash management, there may remain no cash to operate. Cash movement in a business is two- way
traffic. It keeps on moving in and out of business. The inflow and outflow of cash never coincides.
Important aspect which is unique to cash management is time dimension associated with the
movement of cash. Due to non-synchronicity of cash inflow and outflow, the inflow may be more
than the outflow or the outflow may be more than the inflow at a particular point of time. This
needs regulation. Left to itself cash flow is apt to follow monsoonic pattern, and showers of cash
may be heavy, scanty or just normal. Hence there is a dire need to control its movement through
skillful cash management. The primary aim of cash management is to ensure that there should be
enough cash availability when the needs arises, not too much, but never too little