The International Finance Corporation (IFC) says an estimated 2.5 billion adults and 200 million Micro, Small and Medium Enterprises (MSMEs) worldwide lack access to credit or savings.
Accordingly, IFC says its Financial Institutions Group is committed to providing universal access to finance by 2020. It hopes to achieve the target by working through financial intermediaries to support far more micro, small, and medium enterprises than we would be able to on its own.
“We work with a network of 900 financial intermediaries in more than 120 countries. Using a combination of investment and advice, we help strengthen financial institutions and overall financial systems – including capital markets – to enable them to play a constructive role in economic growth.”
The Financial Institutions Group’s total committed portfolio is about $20 billion. At the end of 2012, its financial-intermediary clients provided about 30 million MSME loans to companies which in turn employed more than 180 million people.
“IFC believes that sound, inclusive, and sustainable financial markets are essential to building shared prosperity and eradicating poverty. They ensure efficient resource allocation, create jobs, spur economic growth and play a critical role in private sector development. IFC investment and advisory teams offer joint solutions to our financial intermediary clients that address their financing needs and offer know-how and tools to use the capital to their best advantage.”
The Corporation says it also encourages financial institutions to become more involved in strategic sectors that, while important to the development agenda, might not ordinarily attract much private sector capital. These include women-owned businesses, climate change and agri-finance and underserved regions such as fragile and conflict-affected states.
“Through our investment clients, we help support a full range of financial services such as insurance, housing, capital market development, trade finance as well as loans for individual micro entrepreneurs and small businesses.”