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What We Do

What We Do > Investment Services 

Intermediary Services

A large chunk of IFC financing is channeled to private sector projects in developing countries through intermediaries. IFC uses its full range of financial products to provide finance to a wide variety of financial intermediaries. Working through intermediaries allows IFC to extend its long-term finance to more companies, in particular to small and medium enterprises (SMEs) and microfinance entrepreneurs.

In many regions of the world, small private companies are the principal engines of economic growth and employment creation. But micro, small and medium-size investments carry high transaction costs, limiting smaller companies' access to long-term finance. By working with local or specialized financial institutions, IFC finance can reach these businesses.

IFC operates on a commercial basis. It invests exclusively in for-profit projects and charges market rates for its products and services.

Examples of investments in financial intermediaries include:

  • Credit and equity lines to banks for on-lending to local companies. These investments help the banks to provide working capital and investment financing for their corporate customers.
  • Private equity and investment funds, such as index funds and country funds. IFC also invests in venture capital funds which help channel flows to companies that generally are unlisted and do not receive the notice of large investors.
  • Leasing companies, which are essential to the development of SMEs as smaller companies typically lease costly capital equipment. Leasing plays a critical role in financial sector development in countries with small economies or low per capita incomes. IFC has actively helped establish leasing industries in countries all over the world.

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