MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Contribute $200m to IFC Financial Institutions Growth Fund (FIG Fund), Bringing Total Funding to $345m at First Close

The International Finance Corporation (IFC), a member of the US-based World Bank, recently announced that it will devote up to USD 200 million to the IFC Financial Institutions Growth Fund (FIG Fund), an investment vehicle that will make equity investments that aim to increase access to capital for small and medium-sized enterprises (SMEs) in developing markets [1]. For the first close, IFC will provide USD 150 million, bringing the fund to a total of USD 345 million. Other investors include the State Administration of Foreign Exchange of China, the Japan Bank for International Cooperation and the Hungarian Export-Import Bank. These investors have made an additional USD 105 million in commitments for subsequent closings, however the specific amount committed by each investor is undisclosed.

Jin-Yong Cai, IFC’s Executive Vice President and CEO, said, “Global and local financial institutions increasingly need more capital to keep up with the rapid growth of economies in emerging markets, and to finance expansion opportunities to remain competitive. This fund will support these institutions with core capital, helping promote economic growth and development while aiming to achieve strong returns” [1].

As of 2014, IFC has 184 member countries that drive its policies and approve disbursements. In June 2014, IFC reported net income of USD 1.4 billion, total assets of USD 84.1 billion, return on assets (ROA) of 1.8 percent and total investment mobilization of USD 38.1 billion.

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments and advisory and risk mitigation services to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2014, IFC has 184 member countries that drive its policies and approve disbursements. In June 2014, IFC reported net income of USD 1.4 billion, total assets of USD 84.1 billion, return on assets of 1.8 percent and total investment mobilization of USD 38.1 billion.

The FIG Fund, created in 2015 by the International Finance Corporation (IFC) in collaboration with other investors, is an investment fund designed to support emerging market financial institutions. It aims to increase access to funding for small and medium-sized enterprises (SMEs). At the first closing, the FIG Fund totaled USD 345 million, with USD 150 million from IFC and the remaining undisclosed amounts from the State Administration of Foreign Exchange of China, the Japan Bank for International Cooperation and the Hungarian Export-Import Bank.