IFC’s Growth Strategy: Promoting the Private Sector to meet World Bank Group Goals
IFC Executive Vice President and CEO, Lars Thunell, today affirmed that the Corporation’s growth strategy is central to the World Bank Group’s efforts to fight poverty.
IFC’s growth is a reflection of the role that the private sector plays as an effective engine for economic growth and job creation, particularly in the poorest countries.
In fiscal 2007, 37 percent of IFC’s investments were in IDA countries, and the Corporation has set a 50 percent goal for this fiscal year. IFC’s growth and financial success allowed it to contribute $1.75 billion to IDA over the next four years. IBRD contributed an equal amount.
“IFC’s growth allows us to be more effective where we are needed most, particularly in poorer countries and those affected by conflict. That is where we can add value and demonstrate development impact,” Thunell said at a press conference held during the World Bank Group’s Annual Meetings. ”We are working hard to serve our clients and allow them to build successful businesses that create opportunities for poor people.”
Highlighting IFC’s work in providing microfinance to entrepreneurs in developing countries as a good example of our contribution to private sector development, Thunell announced that the Corporation will double its total commitments in the sector to reach $1.2 billion over the next three years. This will improve access to finance for entrepreneurs in developing countries, create jobs, and raise incomes. It will also make housing, health care, and education more affordable for their families. IFC’s support will allow its microfinance institution clients to provide $30 billion in business loans to over 25 million people, boosting lending in developing countries.
“IFC is focused on creating and supporting commercially viable microfinance institutions that can attract the private capital needed to grow and respond to demand,” said Thunell.
IFC is also working to expand access to finance for small and medium sized businesses, which are critical for creating jobs. IFC works through banks and equity funds to increase the availability of finance to those businesses.
Most of the world’s poor still live in rural, agricultural areas. In its agribusiness investments IFC focuses on supply chains to create strong links between large businesses and local farmers.
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