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IFC provides $4bn to businesses amid Covid-19

  • Published at 12:11 pm October 30th, 2020

Mymensingh Agro Ltd receives $25m investment

The International Finance Corporation (IFC) of the World Bank has provided $4 billion in support to businesses in poorer countries as part of the $8bn in Covid-19 fast-track financing approved by the IFC Board in March 2020.

The financing will help support the fight against Covid-19 across developing countries and emerging markets. The pandemic response is focused on reaching the most vulnerable people in developing countries. 

“Supporting the private sector will be crucial to helping developing countries achieve an inclusive, sustainable and resilient recovery, as well as stemming the current rise in extreme poverty,” World Bank Group President David Malpass said.

 “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,” Maspass added.

The IFC Board in March approved $8 billion in financing to help companies affected by the Covid-19 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,” Stephanie von Friedeburg, interim managing director, EVP and COO of IFC said. 

“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,”Friedeburg said.

IFC has committed an additional $2bn 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.

Strengthen pandemic response

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.

Some IFC projects under the fast-track financing

· 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.

· 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 Ukraine, IFC helped a leading agricultural producer finance its working capital to limit potential input supply chain disruptions in meat production due to the pandemic, thereby supporting domestic food security.

· In Brazil, IFC helped preserve jobs and lessen the economic shocks through a $100 million loan to Daycoval, a bank that will provide credit to SMEs, included women-owned businesses.

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