Catalytic First Loss Guarantee Facility

Micro, small, and medium-sized enterprises (MSMEs) make up over 90% of all firms and account, on average, for 70% of total employment and 50% of GDP worldwide. The MSME finance gap now stands at $5.7 trillion – a number that swells to $8 trillion when informal enterprises are included. Expanding access to finance for MSMEs contributes to GDP and boosts exports, helps create and sustain jobs, and is crucial in supporting a key engine of growth in emerging markets.

To address this need, IFC has introduced the Catalytic First Loss Guarantee (FLG) Facility. The FLG is designed to incentivize financial service providers (FSPs) to increase their lending activities to underserved MSMEs by providing first loss coverage for portfolios that support women-owned businesses, rural and agrifinance, and climate finance. In addition to increasing access to finance to MSMEs, the Facility is expected to demonstrate the commercial viability of these underserved segments.

How can interested financial service providers participate in IFC’s Catalytic First Loss Guarantee Facility?

The FLG will be accessible to eligible financial service providers selected through a competitive process. Eligible FSPs include regulated banks, non-bank financial institutions, digital lenders, leasing companies, and microfinance institutions authorized to carry out lending or leasing activities. FSPs must comply with IFC's qualification criteria, including satisfactory Environmental & Social Risk Rating (ESRR) and Integrity Due Diligence (IDD), financial capability, developmental impact, and operational capability.

In each country where the Facility is available, Expression of Interest proposals will be assessed to by IFC. For more information and to submit an Expression of Interest, please click on the appropriate country below (additional countries will be added as the FLG becomes available):