MICROCAPITAL BRIEF: International Finance Corporation (IFC) Invests $300m in Equity in Postal Savings Bank of China (PSBC)

The International Finance Corporation (IFC), a member of the US-based World Bank Group that aims to increase economic growth in developing countries, recently announced that it has made an equity investment of USD 300 million in Postal Savings Bank of China (PSBC), a bank backed by the government of China. The transaction is coupled with plans for IFC to work together with PSBC on its “rural, micro and digital finance”[1] products.

Vivek Pathak, IFC’s regional director for the Asia Pacific region, said that “we believe this new partnership between IFC and PSBC will help facilitate access to finance for large segments of micro and small and medium enterprises and rural unbanked clients. Our institutions have an aligned mandate in driving financial inclusion and access in China, and through PSBC’s extensive network as well as the introduction of new products and channels we can further advance this agenda”[1].

As of 2014, IFC reported total assets of USD 84.1 billion, net income of USD 1.48 billion and return on assets of 1.8 percent. In China, IFC aims to contribute to the strengthening of financial institutions, promoting access to finance and job creation as well as climate change initiatives. The institution works with the Chinese government to reduce poverty as the country is home to 70 million poor people and 235 million individuals who do not have access to financial services. PSBC has 40,000 retail branches in China. Recent financial information on the organization is unavailable.

By Alíz Crowley, Research Associate

About Postal Savings Bank of China (PSBC)

The Postal Savings Bank of China (PSBC) is a government-owned commercial bank founded in China in 2007 that seeks to provide retail banking services to low-income customers. As of 2015, it has 40,000 branches in China. Recent financial information on the organization is unavailable.

About the International Finance Corporation (IFC)

The International Finance Corporation (IFC), a US-based member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2014, IFC has 184 member countries that drive its policies and approve disbursements. As of that same year, IFC reported total assets of USD 84.1 billion, net income of USD 1.48 billion and return on assets of 1.8 percent.

Sources and Additional Resources

[1] International Finance Corporation, News and Events, IFC Invests in Postal Savings Bank of China to Promote Financial Inclusion for Underserved

MicroCapital Universe Profile: Postal Savings Bank of China (PSBC)

MicroCapital Universe Profile: International Finance Corporation (IFC)

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