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.
IFC aims to help South Asia integrate into the global economy by bringing foreign investors to South Asia and taking South Asian companies to other markets; share global best practices; and provide longer tenor/subordinated debt and equity to second tier companies, whilst adding value from mobilization, sustainability and IFC’s “seal of approval”. As of end FY11, IFC committed IFC committed $742 million for our own account and mobilized an additional $320 million from other investors. more..
Advisory services for small and medium enterprises development are IFC’s main contribution to private sector development in those parts of the region where investment opportunities are limited. Initiatives in Bangladesh, Bhutan, Maldives, Nepal, Sri Lanka and North East states of India aim at enhancing access to finance in partnership with local banks, improving the business enabling environment and encouraging the growth of small and medium enterprises in key sectors. The Advisory team works closely with the World Bank, including joint diagnostic work such as Investment Climate Assessments and joint private sector development programs. As part of a multidonor private sector development (PSD) program in Bangladesh, IFC has launched the IFC Bangladesh Investment Climate Facility to support implementation of investment climate reforms.