The International Finance Corporation (IFC) has said it has so far extended USD 4 billion to private sector businesses in the poorest countries to help fight the coronavirus pandemic.
The IFC, which is the largest global development institution focused on the private sector in emerging markets, in March committed USD 8 billion in fast track financing to help pandemic-hit private sector companies, reports BSS.
Of the $8 billion in IFC COVID-19 fast-track financing approved by the IFC Board in March 2020, $4 billion has been committed to date, of which close to half is expected to benefit people in the poorest countries and fragile states, with the remainder helping to support the fight against COVID-19 across other developing countries and emerging markets.
“Supporting the private sector will be crucial to helping developing countries achieve an inclusive, sustainable and resilient recovery and stem the current rise in extreme poverty,” said World Bank Group President David Malpass.
“Our goal with IFC’s fast-track COVID-19 facility is to provide needed liquidity for corporate and financial institution clients, which will provide working capital, support jobs and facilitate trade,” he added, said an IFC press release.
IFC’s Board in March approved $8 billion in financing to help companies affected by the outbreak. IFC, the largest global development institution focused on the private sector in emerging markets, has since fully deployed the $2 billion allocated under the trade-finance envelope of the fast-track facility.
This support is helping client financial institutions keep liquidity flowing to businesses that depend on trade, especially micro, small and medium-sized enterprises (MSMEs), a major source of employment.
“IFC’s fast-track COVID-19 facility was designed to provide immediate liquidity to our financial institutions and real sector clients to preserve jobs and prevent short-term damage,” said Stephanie von Friedeburg, Interim Managing Director, Executive Vice President and Chief Operating Officer of IFC.
“By supporting private sector clients and interventions, we are hoping in the longer term to help reignite economic growth, paving the way for a better, more resilient and sustainable future once COVID-19 recedes.” added Stephanie.
IFC has committed an additional $2 billion under the facility, benefiting every region in which IFC operates. This financing is being used for a range of purposes, from bolstering healthcare providers to helping the battered tourism sector and keeping viable businesses afloat, thus saving jobs. Another $623 million has been mobilized for these clients from private sector partners.
Additionally, the IDA Private Sector Window (PSW), a tool developed by the World Bank Group to catalyze private-sector investment in the world’s poorest countries, has provided $281 million in guarantees supporting trade-finance and working-capital loans to small and medium-size enterprises (SMEs) in eligible countries since March.
IFC’s response is part of the World Bank Group’s effort to take broad, fast action to help developing countries strengthen their pandemic response, increase disease monitoring and improve public-health interventions. The World Bank Group has the financial capacity to deploy $160 billion over the next 15 months, including a potential $47 billion from IFC in overall support for the private sector.
Looking ahead, IFC will work with its partners to help restructure and recapitalize viable businesses and set the stage for an inclusive, sustainable and resilient recovery. In August, IFC also launched the $4-billion Global Health Platform, which is helping developing countries expand access to medical supplies such as masks, ventilators, test kits and, eventually, a COVID-19 vaccine.
The release said there are some examples of IFC projects committed under the fast-track financing facility with a focus on helping small to medium-sized businesses:
It said, In Bangladesh, IFC supported Mymensingh Agro Limited, a company within the PRAN Group, to expand its capacity to manufacture affordable and quality food products with a $25 million investment. In Vietnam, IFC offered relief to businesses, including more than 300 SMEs, by providing $75 million to the Phu My Hung Development Corporation.
In Uganda, IFC strengthened services to hundreds of thousands of hospital and clinic patients through a $4-million loan to International Medical Group. In Nigeria, IFC helped SMEs across several sectors facing working-capital or trade-finance challenges with a combined $200 million loan to FCMB, Access and Zenith banks.