IFC Initiative to Help Financial Institutions
Latest News Middle East & Africa

IFC Pledges $400million To Help Finance Providers Support Small Businesses

The International Finance Corporation (IFC) has stepped in to help financial services providers deliver funding to pandemic-hit small businesses and low-income households with a $400million support package.

The IFC, the World Bank’s investment arm, says its ‘Base of the Pyramid Program’ will provide funding to microfinance institutions, non-bank financial institutions and banks that focus on micro, small, and medium enterprises (MSMEs).

MSMEs and the informal sector are essential to economic growth, job creation and poverty alleviation in emerging markets, according the IFC. For the financial institutions that serve these enterprises, the crisis has triggered new liquidity pressures, especially for non-deposit taking institutions.

Filling the financing gap

There is a $5.2trillion financing gap for MSMEs in developing countries – rising to $8trillion when informal enterprises are included.

Available to new and existing IFC clients, the new initiative builds on the $8billion Fast-Track COVID Facility that launched in 2020 as part of the World Bank Group’s response to the coronavirus pandemic. The bulk of the IFC financing is focused on helping client financial institutions to continue to offer trade financing, working-capital support and medium-term financing to private companies struggling with disruptions in supply chains.

Stephanie von FriedeburgStephanie von Friedeburg, interim managing director and executive vice president, and chief operating officer of IFC, said: For so many micro and small businesses, quick access to relief funds during the pandemic is not just a matter of support— it is a matter of survival. This is exactly what this program aims to tackle, offering these businesses a chance to weather the storm and emerge stronger and more resilient, particularly in some of the poorest and most fragile countries.”

The Base of the Pyramid Program will be supported by the International Development Associations Private Sector Window (IDA PSW) to help de-risk the credit and foreign currency exposures in projects in low-income countries.

Up to $130million is up for grabs, including a pooled first-loss guarantee of up to $80million from the IDA-PSW Blended Finance Facility to support senior loans. Additionally, $50million from the IDA-PSW Local Currency Facility will boost local currency lending.

Last year, the IFC invested $22billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.


  • Claire works across print and online as Editor for The Fintech Times.

Related posts

PDG Announces Plans To Develop New JC2 Data Centre in Jakarta, Indonesia

Tyler Smith

2 Days to Go till the PSD2 Deadline: Exclusive TFT Interview

Mark Walker

Bank Cost Savings via Chatbots to Reach $7.3 Billion by 2023, Says Research

Manisha Patel