IFC Unveils $8B Boost for Global MSMEs, Targets Women and Eco-Businesses

(Makhtar Diop, IFC MD)

In a bold move to bridge the financing chasm for micro, small, and medium enterprises (MSMEs), the International Finance Corporation (IFC) has rolled out an ambitious initiative. The MSME Finance Platform, backed by a hefty $4 billion from IFC's coffers, is set to channel funds into the hands of small businesses in developing markets, with a special nod to women entrepreneurs and eco-conscious ventures.

This financial lifeline, open to both new and existing IFC clients, is not just about direct funding. It's a multi-layered strategy that includes credit enhancements and a pioneering **Catalytic First Loss Guarantee** to entice another $4 billion from private financiers. The goal? To amplify lending to these vital yet underserved businesses.

Makhtar Diop, IFC's Managing Director, underscores the critical role MSMEs play in developing economies and the significant hurdles they face. The new platform is IFC's answer to these challenges, offering a much-needed boost, particularly to women-led and environmentally focused enterprises.

Despite MSMEs being the lifeblood of global economies—making up over 90% of all firms and contributing significantly to employment and GDP—they grapple with a staggering $5.7 trillion financing gap. The IFC's initiative is a timely intervention as financial service providers in emerging markets reel from recent crises, struggling with stringent lending norms and a risk-averse climate.

Leveraging its risk capital, IFC is extending first loss protection to financial service providers, encouraging them to tap into local currency liquidity and invest in MSMEs

. The platform also benefits from the support of the International Development Association's Private Sector Window (IDA PSW), which offers up to $100 million to mitigate credit and foreign exchange risks in low-income countries.

The IFC, a World Bank Group pillar, is the largest global development institution focusing on the private sector in emerging markets. With a record $43.7 billion commitment in fiscal year 2023, IFC continues to harness private sector dynamism to eradicate extreme poverty and promote shared prosperity amid ongoing global crises.

For more details on IFC's initiatives and partnerships, including the IDA Private Sector Window, the Global SME Finance Facility, and Goldman Sachs 10,000 Women, visit www.ifc.org.