Micro, Small and Medium Enterprises (MSMEs) Financing

The Role of Global Financial Markets
MSMEs are critical to the development of the private sector in IFC's client countries. Increasingly, IFC has recognized the importance of these firms to our developmental and economic impact. Since 2000, IFC has shifted away from direct investments in SMEs to a more focused, efficient, and effective approach relying nearly exclusively on our investments in financial intermediaries to reach SMEs. This puts the Global Financial Markets department at the forefront of the Corporation's strategy to reach this important market segment.

Investments in MSME finance institutions represent 56 percent of Global Financial Markets' portfolio. These are primarily banks, but include leasing companies and non-bank microfinance institutions such as microfinance investment vehicles.

Products
IFC has a variety products that we use in a variety of combinations to support MSME FIs.

Investments. At the end of FY07, the Global Financial Markets portfolio in MSME financial institutions was over $3.9 billion. These investments are processed through the department's standard investment procedures.

Technical Assistance. More than 75 percent of financial markets technical assistance are focused on expanding MSME access to finance by (1) developing banks and non-bank financial institutions that serve MSMEs and (2) creating financial infrastructure such as credit bureaus which help financial institutions better manage MSME risk. IFC's FM TA work is increasingly being delivered through the Corporation's regional facilities.

Special Initiatives. IFC is also developing a number of programmatic approaches to and SME finance, which combine investments, technical assistance in a more packaged approach across multiple institutions.

Resources
MSME Lending FY07: Global and Regional Fact Sheets
--- Global
--- Frontier Markets
--- Conflict-Affected Countries
--- Central and Eastern Europe
--- East Asia and Pacific
--- Latin America and Caribbean
--- Middle East and North Africa
--- South Asia
--- Southern Europe and Central Asia
--- Sub-Saharan Africa

For further information on Micro, Small and Medium Enterprises Financing, contact:
Tony Lythgoe | T: 202.473.7072
Ary Naim | T: 202.458.1471
Ghada O. Teima | T: 202.458.0716