IFC to infuse $4 billion in Covid-19 financing to help poor countries

Prashasti Awasthi Mumbai | Updated on October 30, 2020 Published on October 30, 2020

IFC believes this financial support is helping client financial institutions keep liquidity flowing to businesses

International Finance Corporation (IFC), daughter institution of World Bank, stated in the official release on Thursday that its response to the pandemic is focused on reaching the most vulnerable people in developing countries.

It maintained that of the $8 billion in IFC Covid-19 fast-track financing approved by the IFC Board in March 2020, $4 billion has been committed to date.

It claimed that of $4 billion, close to half is expected to benefit people in the poorest countries and fragile states, with the remainder helping to support the fight against Covid-19 across other developing countries and emerging markets. This includes Uganda, Nigeria, Bangladesh, Vietnam, among others.

Liquidity boost

IFC believes that this financial 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.

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

He added: “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.”

Stephanie von Friedeburg, Interim Managing Director, Executive Vice President and Chief Operating Officer of IFC said in an official statement: “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.”

Friedeburg added: “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.”

IFC has committed an additional $2 billion under the facility, benefiting every region in which IFC operates to bolster healthcare providers and help the battered tourism, it further claimed.

Supporting private sector

IFC noted that another $623 million has been mobilised for the clients from private sector partners.

Additionally, the IDA Private Sector Window (PSW), a tool developed by the World Bank Group to catalyse 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-sized enterprises (SMEs) in eligible countries since March.

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Published on October 30, 2020
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