IFC MLF Project IFC, together with KfW, proposes to rapidly launch a global Microfinance Liquidity Facility (MLF or the Facility) designed to support sound MFIs worldwide that may face a funding shortfall during this time of unprecedented financial stress. The IFC MLF is a pure bottom-up initiative, fully based on specific funding needs of a detailed pre-determined pipeline of MFIs operating globally. The MLFs objective is not to support the impressive growth rates experienced by MFIs over the last decade, but to serve as a defensive facility to support strong institutions in the current credit freeze. This project will support over 100 MFIs operating in over 30 countries, including over 20 IDA countries. IFC will execute the program through the industrys largest and most experienced fund managers in order to:     - provide a rapid and flexible response to market needs;    - achieve maximum possible outreach; and    - ensure efficiency.  Backed by KfW, IFC proposes to launch the MLF, a two phased Facility to support over 100 MFIs for a total of $500 million. A detailed bottom-up analysis of the market indicates needs of up to $1.8 billion through year-end 2009. IFC and its partners propose to execute the MLF in two phases providing needed funding of $500 million. A key element of the phased approach is how IFC will leverage additional financing and mobilize other partners to participate in funding the Facility. Direct Contribution to Poverty Reduction: This project will provide access to finance millions of borrowers over the life of the proposed facilities. Supporting productive small businesses will in turn stimulate growth, employment generation and poverty reduction. Furthermore, IFCs proposed liquidity facility will:     - provide needed short-term funding so that MFIs can maintain operations and healthy portfolios;    - assure that MFIs can maintain their existing client base of micro-enterprises over the next 12-18 months;    - provide a reassuring signal to deposit taking clients of additional liquidity within MFIs; and    - maintain confidence in the microfinance asset class.  Support the Microfinance Industry in a Time of Crisis: By supporting the MLF, IFC will support over 100 MFIs operating in 30 countries (including 20 + IDA countries) by providing them with emergency commercial funding in order to maintain operations and provide comfort to their deposit clients. While IFC and other like-minded investors strongly support savings mobilization, by providing liquidity to financial institutions, IFC will also be providing confidence to microfinance deposit clients world-wide.  IFC will coordinate with CGAP and its partners to disseminate facility information.  Demonstration Effect: IFCs MLF should stimulate other local and international investors by demonstrating that MFIs represent a strong asset class in a time of crisis. This initiative will confirm IFCs role as the industrys lead investor and supporter through a rapid response to the market by implementing its counter-cyclical strategy.  Facilitate the Access of MFIs to Commercial Funding:  The current demand of credit by underserved micro enterprises in emerging markets far exceeds the funding provided by donors and commercial lenders.  In order to satisfy the demand and unleash the productive capacity of these micro enterp