MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Loan $50m to Jiangsu Financial Leasing of China for On-lending to Small and Medium-Sized Enterprises (SMEs) in Education, Healthcare

The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, has agreed to provide a loan of USD 50 million to Jiangsu Financial Leasing, which was founded in 1985 and is controlled by the Chinese government. The loan is intended to increase access to finance for small and medium-sized enterprises (SMEs) in the education and health care sectors in less-developed regions of China. This is the first loan to be funded through the Renminbi Swap Facility, a contract through which IFC reportedly became the first multilateral institution authorized to conduct transactions with Chinese banks in the domestic currency swap market.

IFC invested a total of USD 38.9 million in Jiangsu Financial Leasing between 2010 and 2011, and it owns a 10-percent stake in the firm. As of 2011, SMEs accounted for 82 percent of the company’s leasing portfolio, and businesses in frontier regions made up 44 percent. By 2016, Jiangsu Leasing aims to double its financing to SMEs. Compared to commercial banks, its packages reportedly have longer maturities and less collateral requirements. Financial details on Jiangsu are not available.

As of 2011, IFC has 182 member countries, total assets of USD 68.5 billion and USD 12.2 billion mobilized to 518 projects.

By Mihaela Grindeanu, Research Associate

About International Finance Corporation (IFC): A member of the World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries, total assets of USD 68.5 billion and USD 12.2 billion mobilized to 518 projects.

About Jiangsu Financial Leasing: Jiangsu Financial Leasing Company, which was established in June 1985 and obtained its Financial License in 1988, is a state-controlled non-bank finance institution specializing in the financial leasing business. IFC invested a total of USD 38.9 million in Jiangsu Financial Leasing between 2010 and 2011, and it owns a 10-percent stake in the firm. Financial details on Jiangsu are not available.

Sources and Additional Resources:

Ifc.org story: “IFC’s First Loan under New Renminbi Swap Facility Expands Financing for Small Businesses in China”, http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/3AF3AF5A628E339585257A28000D9184

MicroCapital.org story, June 18, 2012: “MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Invest $1.6m in Chinese-Mongolian Microcredit Company Urumqi Tianrong”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-to-invest-1-6m-in-chinese-mongolian-microcredit-company-urumqi-tianrong/

MicroCapital.org story, April 9, 2012: “MICROCAPITAL BRIEF: Loans to Small- and Medium- Sized Enterprises in China Increasing, but Demand Still Significantly Exceeds Supply”, https://www.microcapital.org/microcapital-brief-loans-to-small-and-medium-sized-enterprises-in-china-increasing-but-demand-still-significantly-exceeds-supply/

MicroCapital Universe Profile: About International Finance Corporation, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

 

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