MICROCAPITAL BRIEF: IFC Boosts COVID-19 Response to $8b for Working Capital, Risk-sharing, Trade Finance, “Real Sector” Finance Worldwide; Including $294m Deployed to Target SMEs in Vietnam

The World Bank Group’s International Finance Corporation (IFC) recently increased to USD 8 billion its financial commitment to counter the effects of COVID-19. David Malpass, President of the World Bank Group, said, “It’s essential that we shorten the time to recovery.” He added, “Support operations are already underway, and the expanding funding tools…will help sustain economies, companies and jobs.”

The funding package is divided into four categories, with USD 2 billion allocated each to: (1) cash for banks in emerging markets to lend to businesses for working capital; (2) guarantees for local banks increasing credit lines to private companies in emerging markets; (3) risk-sharing for lenders to import-export firms, including small and medium-sized enterprises (SMEs); and (4) loans and equity for existing clients in the health, farming, infrastructure, manufacturing and service industries.

Given “fast-track” status, the intervention has extended support to clients including banks in Vietnam that have accessed an additional USD 294 million to date to lend to SMEs and other clients.

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 2019, it reported total assets of USD 94.3 billion.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2020, it has 189 member nations. The group encompasses: (1) IFC; (2) the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes.

Sources and Additional Resources

IFC press release
https://ifcextapps.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/CCCB1EAC6F61E32C8525852E0068124B

IFC homepage
https://www.ifc.org/

World Bank Group homepage
https://www.worldbank.org/

More news on COVID-19
https://www.microcapital.org/?s=covid

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