IFC
Financial Institutions Group (FIG)

MSMEs

Industry Context

IFC Strategy and Portfolio

Micro, Small and Medium-sized

MSME financing is a significant part of IFC’s business.

Enterprises (MSMEs) are vital toIFC works across emerging markets to improve financial

economic growth, job creation,

infrastructure and scale new tools to deliver impactful financial

provision of goods and services, andproducts and services for MSMEs. Working through financial

poverty alleviation in emerging

intermediaries, IFC provides access to finance for millions ofmarkets. MSMEs make up over 90% ofMSMEs that would be challenging to reach directly. IFC has

all firms and account, on average, forlaunched innovative and complementary platforms targeting

70% of total employment and 50% ofMSMEs, including enhancing bank risk appetite for SME on-GDP worldwide. The MSME finance gap

lending, supporting micro-borrowers, increasing access to trade

now stands at $5.7 trillion – a number

finance, and support to supply chain finance.

that swells to $8 trillion when informal
enterprises are included. In emerging

IFC enables digital and embedded financial service providers

markets, 70% of MSMEs lack adequate

to better serve MSMEs by partnering with innovative banks,financing while 1.7 billion adults lack

FinTechs, and digital platforms. IFC also works with financial

access to basic transaction accounts.

intermediaries to provide training, mentoring, networking,Those without access are largely

and access to markets. These non-financial services have been

concentrated in Asia and Sub-Saharanshown to benefit the MSMEs as well as the financial institutions

Africa and are disproportionately poorthat serve them, and are particularly impactful for womenand female.

entrepreneurs who face constraints related to knowledge andnetworking.

FIG’S COMMITTED MSME PORTFOLIO(As of end-June 2024)$18billion
FIG’S IMPACT

74millionloans toMSMEs
65
millionloans to MSMEs

FIG boosts financing dedicated to MSMEs through equity,debt, and risk sharing facilities that support financial
institutions’ lending to MSMEs.

Strategic Initiatives

Project Examples

MSME Finance

AL BARAKA BANKPlatform

IN EGYPTIn May 2024, IFC launched the MSME Finance Platform, a
new financial package of up to $4 billion from IFC's own
account to help financial service providers deliver funds toMSMEs in emerging markets. This new platform will utilize
various forms of credit enhancement to mobilize private
capital, including an innovative Catalytic First Loss
Guarantee aiming to crowd in an additional $4 billion in
financing. The platform will be supported by theInternational Development Association's Private Sector

IFC’s $50 million investment in Al Baraka Bank Egypt will
enable the bank to increase financing to thousands of smalland medium businesses across a wide range of sectors
including tech, transport, communications, health, andothers, with at least 25% of lending earmarked for womenowned SMEs. As part of the investment, IFC will provide
support to Al Baraka Bank to develop and implement anenvironmental and social management system.

Window (IDA PSW), the Global SME Finance Facility(GSMEF) and the Women Entrepreneurs Opportunity
Facility (WEOF).

SMALL LOAN GUARANTEEPROGRAM (SLGP)In April 2018, IFC established the SLGP, a programmatic
approach to unfunded risk sharing which aims to enhanceand strengthen the capacity of financial institutions for risktaking and financing to SMEs/Very Small Enterprises in IDA
PSW eligible countries. The SLGP uses a pooled first loss
structure provided by the IDA PSW Blended Finance

BANQUE DE CRÉDIT DE BUJUMBURA(BCB) IN BURUNDI
MSMEs account for more than 90% of firms in Burundi andface a financing gap of approximately $491 million. To help
meet growing demand, IFC provided BCB with a $20 million
loan, of which $10 million is mobilized from institutional
investors, to support BCB’s strategy to grow its MSME
portfolio and become the leading bank serving small andinformal businesses in Burundi. The loan is supported bythe Base of the Pyramid Platform.

Facility, and incorporates product enhancements to offer
more efficient, competitive, and scalable risk sharing
facilities. As of June 2024, the SLGP has supported a total of
5,949 loans to SMEs totaling $527 million across 14
countries, focused on bridging financing gaps for businesses
operating in the most challenging environments.

BANCO ATLASIN PARAGUAY
IFC’s $50 million loan to Banco Atlas will finance SMEs inParaguay, with at least 25% earmarked for women-owned
businesses and informal enterprises. The project will
help build capacity and demonstrate to other financial

THE GLOBAL SME
FINANCE FACILITY
The Global SME Finance Facility (GSMEF) is a partnership

institutions the financial viability of lending to WSMEs. IFC
will also help identify opportunities and support a strategic
approach to reaching more women customers.

focused on helping to close the financing gap faced bySMEs in emerging markets. By providing investment andadvisory services to financial institutions, the Facility helps
them expand lending to SMEs in challenging markets andsegments. The Facility focuses on the most underserved
SME segments that are not normally reached by financial
institutions. These include SMEs in fragile countries, Very
Small Enterprises, climate-smart SMEs, and womenowned SMEs. In addition, the Facility aids governments
to improve their nations’ financial infrastructure, thus
enabling capital to flow more efficiently to SMEs. As ofJune 2023, the program has committed $140 million to 196
investment and advisory services projects in 43 countries,SIDDHARTHA BANK LIMITED(SBL) IN NEPAL
SMEs account for 22% of Nepal’s GDP and employ morethan 1.8 million people, yet the SME financing gap stands
at around $3.6 billion. IFC’s $55 million loan to SBL is IFC’s
largest investment in the country and will enable the bankto increase its on-lending to SMEs and WSMEs, especially inremote and rural areas, supporting up to 15,000 jobs. IFC
will also support SBL’s effort to identify and evaluate green
lending opportunities, and provide advisory assistancedesigned to further strengthen the bank’s operations.

of which 28% are fragile and conflict-affected states.

International Finance Corporation 2121 Pennsylvania Avenue NW, Washington, DC 20433
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