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Company name

Unik S.A.

Project number

BR3736A-01

N/A

E&S category
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N/A

Country

Brazil

Sector

Financial Institutions

Status

Inactive

Disclosed date

10/12/2007

Projected date at which a project will be put forward for the Board of Executive Directors’ approval.

Projected board date
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11/13/2007

Approval date

11/19/2007

Signed date

N/A

Sponsoring entity

N/A

Investment Operations Department Contact

Portfolio Management Division

Investment type

Syndicated amount

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Financing amount

USD $ 8,000,000

Currency

USD

Project scope and objective

The objective of this project is to provide equity and funding to Unik S.A., which will allow the company to complete a comprehensive recapitalization of its liabilities, thereby positioning it to more effectively pursue various product development, growth, and expansion opportunities.


Unik is Brazil’s leading issuer of payroll cards. It provides basic financial services to under-banked, lower-income Brazilian workers as well as pensioners, and makes working capital financing available to commercial establishments that sell basic necessities to these types of consumers. The payroll card business in Brazil effectively acts as a mechanism for interest-free wage advances to lower-income workers in Brazil, who otherwise might not have any other form of contact with financial sector services and entities.


Approximately 250,000 employees at 3,000 companies that are currently part of the Unik network have activated Unik payroll cards, which can be used to make purchases at approximately 16,000 commercial establishments that are now affiliated with Unik and linked to its IT systems. Commercial establishments affiliated with Unik tend mostly to be local food stores and pharmacies, given the fact that a relatively high proportion of spending by lower-income workers is allocated towards food and health-related expenditures (as opposed to bigger ticket, consumer finance items). Employees can make purchases at commercial establishments that are part of the Unik network up to a R$150 per month limit, as long as this amount is less than one third of the relevant individual’s current, unpaid monthly salary. After purchases are made by payroll cardholders, the relevant commercial establishment receives (via the Unik network) a cash payment from employers (for goods and services sold to employees). Thus, Unik effectively performs a billing function between its affiliated commercial establishments on the one hand, and employers on the other hand, thereby taking the settlement/credit risk of employers in its network when it assumes the obligation to pay commercial establishments for goods and services purchased by employees using its payroll cards.


The project has two main developmental impacts. First, it increases the access of large numbers of un-banked, lower-income Brazilians to basic credit resources and financial services (Unik has a relevant presence in the Brazilian Northeast). Second, it makes more working capital resources available to large numbers of commercial establishments who sell basic necessities to lower-income Brazilians.


Unik’s largest shareholder is the Rio Bravo Group, a leading Brazilian fund management firm. Other shareholders include senior management of the firm, as well as the Santa Cruz Group, one of the biggest wholesalers of medication and personal care products in Brazil.


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Environmental and social review

IDB Invest conducts an environmental and social due diligence (ESDD) commensurate with the nature, scale, and stage of the project, and with its level of environmental and social risks and impacts. The ESDD will confirm the project E&S categorization and assess the project with respect to the client requirements in IDB Invest Environmental and Social Sustainability Policy. The results of the ESDD, including any identified gaps are described in the Environmental and Social Review Summary (ESRS) provided below. For projects approved as of 2016, any gaps with respect to IDB Invest's Environmental and Social Sustainability Policy at the time of the ESDD are addressed in the Environmental and Social Action Plan (ESAP) presented below, to comply with the date mentioned above.

ENVIRONMENTAL AND SOCIAL REVIEW

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Contact information

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Request information

Alternatively, you may also use the following contact information :

Client Contact

EMAIL

N/A

PHONE NUMBER

N/A

POST OFFICE ADDRESS

N/A

IDB Invest Contact

EMAIL

requestinformation@idbinvest.org

PHONE

+1(202)-566-4566

ADDRESS

1350 New York Ave NW, Washington, DC 20005

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