Supporting financial institutions that serve the base of the pyramid
Micro, small and medium enterprises (MSMEs) and the informal sector are essential to economic growth, job creation, and poverty alleviation in emerging markets. Many small businesses were already credit constrained before the COVID-19 pandemic arrived, and now face increased risks and uncertainty. As the largest private sector focused international funder in the financial inclusion space, IFC is well positioned to help financial service providers sustain their operations through the crisis and continue to support their MSME clients.
IFC’s Base of the Pyramid Facility is a $600 million global financing facility to help financial services providers deliver funding to small businesses, informal enterprises, and low-income households—supporting economic growth, job creation, and a resilient recovery from the COVID-19 pandemic.
About the Base of the Pyramid Facility
By facilitating access to finance, financial service providers that serve these enterprises will play a critical role in aiding MSMEs in emerging markets to recover from the economic shock of the pandemic. The Base of the Pyramid Facility provides funding in the form of senior loans up to three years in tenor to microfinance institutions, non-bank financial institutions, and MSME-focused banks. Up to 50 percent of the program’s investments are targeted in low-income countries that are eligible borrowing countries of the International Development Association (IDA).
The program is supported by the IDA Private Sector Window (IDA-PSW) to help mitigate risks and uncertainties of projects in IDA PSW eligible countries. Resources from the IDA PSW Local Currency Facility may be made available to help provide local currency solutions in eligible countries.
How to Participate in the Base of the Pyramid Facility
IFC invites interested, eligible financial institutions to contact us to explore partnerships under the Base of the Pyramid Facility. For more information, please contact bopf@ifc.org.
Frequently Asked Questions
1. What are the eligiblility requirements to participate in the Base of the Pyramid Facility?
Microfinance Institutions, Non-Bank Financial Institutions/Companies, and MSME-focused banks that serve the base of the pyramid, both existing and new IFC clients, are eligible to participate. To be eligible for IFC funding, a project must:
- Be located in a developing country that is a member of IFC;
- Be in the private sector;
- Be technically sound;
- Have good prospects of being profitable;
- Benefit the local economy; and
- Be environmentally and socially sound, satisfying IFC environmental and social standards as well as those of the host country.
2. What type of loans does the Facility offer and what are the terms?
- Senior loans up to five years in tenor.
- IFC investments typically start at $1 million (or equivalent in local currency) with a limited number of investments below that amount.
- Pricing is on commercial terms and market-based.
- The purpose of IFC’s loan must be to support the growth of the institution’s MSME portfolio.
3. How long will the program be available?
The program will run through June 2023, or when $600 million has been fully allocated.
4. How do I work with the Facility?
Please reach out to bopf@ifc.org and our team will be in touch.