South Asia is home to 1.3 billion people, of which 30% live on less than $1 a day. In recent years, economic growth has accelerated to nearly 7% per year, reducing poverty levels. Continued strong growth offers the best prospect for further poverty reduction, but this depends on expanded provision of social infrastructure and improvements in environmental sustainability, so that the benefits of growth are widely shared, and the growth is sustainable. South Asia receives the lowest amount of FDI as a proportion of GDP of any region in the world. Growth is largely generated by domestic investment, fueled by rising savings rates. Recently, India’s strong growth and relatively well developed capital markets have attracted record inflows of portfolio capital and private equity.
To grow opportunities for the underserved, IFC in South Asia has concentrated on low-income, rural, and fragile regions while building infrastructure and assisting public-private-partnerships; facilitating renewable energy generation; promoting cleaner production, energy and water efficiency; supporting agriculture; creating growth opportunities for small businesses; reforming investment climate; encouraging low-income housing; and making affordable healthcare accessible.
IFC is undertaking focused business development efforts to find investment opportunities in frontier countries in the South Asia region and frontier regions within India. In Bangladesh, Nepal and Sri Lanka prospects for new investments are improving rapidly.
Through these strategic investments and advisory interventions in the region, IFC aims to promote inclusive growth, particularly in the low income states of India and post-conflict and frontier parts of the region; help address climate change impacts; and encourage global and regional integration including promoting investments from South Asia into Africa. Inclusion, Climate Change, and Integration are three pillars of our strategy in the South Asia region.