IFC offers a wide variety of financial products for private sector projects in developing countries.
To be eligible for IFC funding, a project must meet a number of criteria. The project must:
• Be located in a developing country that is a member of the IFC. Projects in sectors such as information technology may be located in an industrialized country if the benefits of the project primarily accrue to a developing country or countries • Be in the private sector • Be technically sound • Have good prospects of being profitable • Benefit the local economy • Be environmentally and socially sound, meeting IFC environmental and social standards as well as those of the host country
IFC does not lend directly to micro, small, and medium enterprises or individual entrepreneurs, but many of our investment clients are financial intermediaries that on-lend to smaller businesses.
A company or entrepreneur seeking to establish a new venture or expand an existing enterprise can approach IFC directly by submitting an investment proposal. After initial contact and a preliminary review, IFC may proceed by requesting a detailed feasibility study or business plan to determine whether or not to appraise the project.
Although IFC is primarily a financier of private sector projects, it may provide finance for a company with some government ownership, provided there is private sector participation and the venture is run on a commercial basis.
To ensure the participation of investors and lenders from the private sector, IFC limits the total amount of own-account debt and equity financing it will provide for any single project.
For new projects the maximum is 25 percent of the total estimated project costs, or, on an exceptional basis, up to 35 percent in small projects. For expansion projects, IFC may provide up to 50 percent of the project cost, provided its investments do not exceed 25 percent of the total capitalization of the project company.
Like other private sector investors and commercial lenders, IFC:
• Seeks profitable returns; • Prices its finance and services in line with the market; and • Fully shares risks with its partners.
IFC's Access to Finance Advisory helps increase the availability and affordability of financial services for individuals and micro, small and medium enterprises. Our priorities are to help our clients provide broad-based financial services to individuals (such as credit, savings, payments and insurance products) and to promote growth and employment generation by supporting sustainable lending to small and medium enterprises. We also help build the necessary financial infrastructure such as credit bureaus and collateral registries.
We focus on:
Building banks and nonbank financial institutions, with emphasis on banks that serve small and medium enterprises or provide microfinance, agriculture finance, housing finance, leasing, trade finance, insurance and sustainable energy finance.
Improving financial infrastructure such as credit bureaus, securities markets and collateral registries.
Improving the legal and regulatory framework to help develop and improve the enabling environment for increasing access to finance.
IFC delivers advice on access to finance mainly through our regional offices, with more than 130 dedicated staff members. We also coordinate these services with the World Bank to deliver policy advice and joint interventions.