Lending to strengthen governance structures. Good corporate governance—well-defined shareholder rights, strong internal controls, high levels of transparency and disclosure, and an empowered board of directors—can improve a company’s performance and profitability, and make it more attractive to investors and lenders. For this reason, corporate governance has become a hot topic in the business world, especially in emerging markets where governance improvements can improve a firm’s access to capital and access to international markets. Financial institutions can offer corporate governance-targeted finance aimed at strengthening client business performance while enhancing credit quality and bottom line portfolio returns. This market has great potential and IFC specialists are uniquely qualified to help banks access it.
How can IFC help?
IFC is developing corporate governance lending with leading banks in Brazil, Colombia, Mexico, Peru, and South Africa. IFC’s offering includes:
-Global expertise in corporate governance: IFC is a leader among multilateral financing institutions in integrating corporate governance into all phases of the investment process. IFC works with partners across the financial spectrum to implement international corporate governance standards.
-Flexible financing: IFC offers medium- to long-term credit lines to support financial institutions to implement corporate governance-targeted lending to clients aimed at improving credit risk and business performance.
-Corporate governance methodology: IFC provides the methodological framework for financial institutions to implement corporate governance projects with clients. Adapted to banks’ needs, IFC’s framework measures client company management commitment, accountability and transparency over an agreed period at escalating performance levels.
-Technical Assistance: IFC can provide customized training and assistance to financial institutions during project implementation. In addition, IFC may be able to provide corporate governance technical assistance to banks’ client companies.
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