In Dushanbe, Tajikistan's capital, Muhabbat Islomova runs a small firm producing decorative quarry tiles and pipes. In order to expand the business, she has in the past few years taken out several loans totaling $110,000 from IFC-client Access Bank
Women-owned businesses represent 40 percent of small and medium-sized enterprises in Turkey, but only 15 percent have access to finance. IFC has partnered with local banks and committed $60 million to change this.
The financial and Eurozone crises and the recent troubles in emerging economies have led to high volatility in the Europe and Central Asia region (ECA), underscoring the value of strong local capital markets. In response, IFC is providing critical support to banking and financial sectors in the region, easing unemployment and ensuring that companies and individuals continue to have access to the financing they need.
The World Bank Group announced in 2012 that it is making $27 billion in funding available over the next two years for countries of Emerging Europe and Central Asia. In case of market need and with a focus on supporting economic growth and job creation, IFC’s investment and advisory program in ECA could reach $10 billion of commitments in FY13-14 with approximately $8 billion for IFC’s own account and approximately $2 billion in mobilization.
Since 2011, IFC has invested more than $1 billion in 16 capital markets projects in ECA. These include short-term financing and trade products to address immediate liquidity concerns, mezzanine and equity investments to shore-up capital shortfalls, and strengthened SME financing to fill funding gaps. In some cases, IFC helps companies access domestic investors with groundbreaking deals. Last year, IFC invested $37.6 million in a $159 million local currency bond with Unicredit Romania, the first bond issued by a financial institution in Romania since the start of the financial crisis. IFC also helps companies access funding overseas, and served as an anchor investor in the $450 million Eurobond issued by Mersin International Port, Turkey’s first single asset infrastructure Eurobond. IFC also supported Russian infrastructure firm Brunswick Rail’s first Eurobond issue, a $600 million bond, for which IFC provided $25 million.
A coordinated IFI response provided critical support during the 2008 crisis and remains important today. IFC is working with other European institutions on a second Vienna Initiative which aims to ensure coordination between institutions and to avoid a messy deleveraging situation in Europe. IFC, along with other members of the World Bank Group, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), recently launched the Joint IFI Action Plan 2013-2014 to support growth in Central and South Eastern Europe. As part of this initiative, IFC will support the private sector through its investments and advisory services in sectors including banking, infrastructure, manufacturing, agribusinesses, services and trade.
Vibrant, efficient domestic capital markets are the foundation for shared prosperity and lasting growth. They provide long-term funding for key economic sectors such as infrastructure, and protect against capital-flow shocks. Developing such markets is a cornerstone of our strategy and a priority for IFC.