Use of proceeds of IFC’s targeted FI investments are primarily directed to micro, small and medium enterprises (MSMEs), women-owned businesses, climate-related projects and housing finance. For the purpose of IFC’s investments these sectors are defined as follows.
MSME
An enterprise qualifies as a micro, small or medium enterprise if it meets two out of three criteria of the IFC MSME Definition (employees, assets and sales), OR if the loan to it falls within the relevant MSME loan size proxy.
IFC MSME Definition |
MSME Loan Size Proxy |
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INDICATOR |
EMPLOYEES |
TOTAL ASSETS US$ |
ANNUAL SALES US$ |
LOAN SIZE AT ORIGINATION |
Micro enterprise |
< 10 |
<$100,000 |
<$100,000 |
<$10,000 |
Small enterprise |
10-49 |
$100,000 - < $3 million |
$100,000 - < $3 million |
<$100,000 |
Medium enterprise |
50-300 |
$3 million -$15 million |
$3 million -$15 million |
<$1 or $2 million[1] |
Agriculture Finance
Agriculture Finance (AgFin) refers to the provision of financial services, including credit, investment, insurance, and risk management, tailored to support agricultural activities and rural development. It encompasses agricultural business (agribusiness) finance, which focuses on financing agricultural firms and their processes. AgFin helps smallholders, producer groups, input suppliers, agribusiness, processors, and other actors across the agriculture value chain access the capital needed to invest in new technologies, improve productivity, manage risks, and expand operations, among other objectives.
Woman-Owned Enterprise
An enterprise qualifies as a woman-owned enterprise if it meets the following criteria:
(A) ≥ 51% owned by woman/women; OR
(B) ≥ 20% owned by woman/women; AND (i) has ≥ 1 woman as CEO/COO/President/Vice President; AND (ii) has ≥ 30% of the board of directors composed of women, where a board exists.
Housing Finance
Loans used for the construction of housing, the acquisition of new or existing housing, home improvements, energy and water efficient (green) housing, and the provision of rental housing.
Climate-Related Financing
“Climate-related Activity” means any of the eligible operations or activities listed in the Common Principles for Climate Mitigation Finance Tracking (version dated 5 December 2023) or the Common Principles for Climate Change Adaptation Finance Tracking (version dated 30 November 2023), as may be amended or supplemented from time to time, with guidance on the eligibility of specific sub-projects to be provided by IFC.
[1] US$2 million for more advanced countries including: Argentina, Brazil, Chile, China, Colombia, India, Korea, Mexico, Morocco, Peru, Russia, South Africa, Thailand, Tunisia, Turkey, and all EU accession countries—Poland, Hungary, Czech Republic, the Baltics and Slovenia.