IFC uses both investments and technical assistance to help build local financial intermediaries’ ability and willingness to lend to SMEs. Investments made by IFC in financial intermediaries focusing on SME lending have included equity investments, loans, revolving credit lines, and risk mitigation facilities.

Last year IFC also provided $15 million in technical assistance to the banking sector (excluding microfinance), representing 33 percent of all financial market technical assistance programs. Of this, $9 million specifically targets SMEs. More than half of all the banking technical assistance—60 percent—is provided in frontier countries, such as Azerbaijan, which received more than $2 million.

These projects include training and consulting that increases the capacity of banks to serve small businesses in the areas of:

• risk assessment,
• portfolio management,
• marketing,
• strategy, project and process design.

Linked to these efforts is IFC's work on legislative and regulatory changes that improve the environment for SME banking, for example by improving the reliability of secured financing systems or facilitating repossession of collateralized assets. IFC is also supporting the development of better credit bureaus through the Global Credit Bureau program. It has provided targeted technical assistance programs in over 30 countries, resulting in new or improved credit bureaus in six countries.

Such projects can be a “win-win” solution for all—opening up new access to capital for smaller firms that contributes to job creation and economic growth, while also helping commercial banks diversify their product portfolio and find profitable new lines of business.