B Loan

IFC created the B Loan structure in 1959 to allow private banks to participate in our loans to emerging market borrowers. Today, the B Loan enables commercial banks, investment funds, and other private investors to access direct impact lending opportunities in more than 60 countries while benefiting from the same preferred creditor treatment as IFC’s own loans.

Now a market standard for development finance institutions, the B Loan mobilizes billions of dollars each year in private capital for developing countries.

How It Works

When an IFC financing includes a B Loan, IFC retains a portion of the loan on its own account (the "A Loan") and sells participations in the remaining portion to eligible private lenders (the "B Loan"). The borrower signs a single loan agreement with IFC, while IFC signs separate participation agreements with each lender.

Benefits to Lenders

• IFC’s risk mitigation role is recognized by regulatory and ratings agencies, including Basel II and III, and private insurance providers.
• Increased deal flow through IFC’s global origination capacity.
• Access to IFC’s impact investing expertise and structuring and restructuring capabilities.
• Investments aligned with IFC Operating Principles for Impact Measurement and Performance Standards.
• Transparent lender participation acknowledged by the borrower and reflected in transaction communications. 
• Pro-rata allocation of borrower payments between IFC and participating lenders.

Benefits to Borrowers

• Access to longer tenor loans and exemption from withholding tax.
• Time and cost savings as IFC remains sole contractual lender and Lender of Record.
• A comprehensive financing package arranged by IFC, including mobilizing other partners.
• Introductions to new banking relationships through IFC’s global network.
• IFC’s “stamp of approval,” including strong and environmental and social standards.