IFC provides $5B to East Asia, Pacific MSMEs

THE World Bank Group’s private sector arm, the International Finance Corporation (IFC), has provided over $5 billion to micro, small and medium-sized enterprises in the East Asia and Pacific region.

The amount, the highest it has allocated for the region, includes $3 billion in long-term finance and just over $2 billion in mobilization to help sustain and create jobs, improve services, and protect small and medium sized companies.

The announcement came as Ruth Horowitz assumed the role of IFC’s Regional Vice President for Asia and Pacific—covering both East and South Asia—taking over from Alfonso Garcia Mora, who is now IFC’s Regional Vice President for Europe, Latin America, and the Caribbean.

“I am very excited to join the region and to work closely with its fantastic staff, clients and stakeholders, and look forward to building on the region’s strong history of impactful private sector engagements,” said   Horowitz.

Horowitz is a global investment professional with over 30 years of experience. Most recently, she served as the Vice President of IFC’s Equity Mobilization Division—IFC Asset Management Company (AMC), which has raised over $10 billion from investors across 13 funds. Prior to joining IFC as the Chief Operating Officer and Director of AMC, Horowitz worked for Lehman Brothers.

IFC’s record financing for the East Asia and Pacific region included $2.34 billion in equity, loans and bonds, including social bonds for financial institutions to support the region’s micro, small and medium-sized (MSMEs) enterprises. MSMEs—collectively EAP’s largest employer—are the region’s growth engine.

Supporting the region’s businesses suffering the impacts of the pandemic, IFC delivered $600 million in long-term finance in Covid-response deals, combined with $100 million in short-term finance to help local exporters and importers increase trade activities, including food and commodities trade during a turbulent global economic period.

Overall in the East Asia and Pacific region, from FY20 to FY22, IFC has committed $2.5 billion in response to Covid-19, including $400 million in short-term finance.

“With unprecedented global challenges, IFC’s record commitments helped the region weather the impacts of the Covid-19 pandemic, preserve jobs, and focus on a green, resilient, and inclusive recovery path,” said Kim-See Lim, IFC Regional Director for East Asia and  Pacific.

“The past financial year saw many firsts in the climate space, including blue bond issuances to help address marine pollution and support countries’ climate goals. IFC’s first-ever sustainability-linked bond was in the Asia and Pacific region,” she added.

IFC’s commitments included $1.2 billion to support climate projects across the East Asia and Pacific region, including funding for innovative green and blue transactions, and for renewable energy and climate-smart urban infrastructure projects.

Some of these projects included two in the Philippines which were done with Ayala Corporation and e-commerce start-up Growsari.

IFC invested $100 million in the first social bond by Ayala Corporation in the health-care sector to help increase availability of much-needed affordable health-care in the Philippines.

The project with Growsari aimed to protect farmers, micro-retailers, and MSMEs, that are especially vulnerable to economic shocks through the digital transformation of MSMEs.

In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the Covid-19 pandemic.

Cai U. Ordinario