IFC extends $4-billion loans to private companies to fight pandemic

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Mumbai: The International Finance Corporation (IFC) on Friday said it has so far extended USD 4 billion to private sector businesses in the poorest countries to help fight the coronavirus pandemic.

The IFC, which is the largest global development institution focused on the private sector in emerging markets, in March committed USD 8 billion in fast track financing to help pandemic-hit private sector companies.

"Of the USD 8-billion pandemic fast track financing approved by our board in March, USD 4 billion have been committed to date, of which close to half is expected to benefit the people in the poorest countries," Mengistu Alemayehu, IFC's regional director for South Asia, said in a statement.

He added that the rest will go to support the fight against the pandemic in other developing countries and emerging markets.

The multilateral lender did not specify how much it has given to Indian businesses, except mentioning a USD 40-million loan to DCM Shriram for mitigating its supply chain disruptions and protecting jobs.

IFC's pandemic response is focused on reaching the most vulnerable people in the developing world.

"Supporting the private sector will be crucial to helping developing countries achieve an inclusive, sustainable and resilient recovery, and stem the current rise in extreme poverty," World Bank Group President David Malpass was quoted as saying in the statement.

He added that IFC's goal is to fast-track its pandemic facility to provide needed liquidity for corporate and financial institution clients, which will provide working capital, support jobs and facilitate trade.

Of the USD 8-billion said amount, USD 2 billion is under the trade-finance envelope of the fast track facility and, today, it said the entire facility has been deployed most of which has gone to small businesses.

"By supporting the private sector, we are hoping in the longer term to help reignite economic growth, paving the way for a better, more resilient and sustainable future once pandemic recedes," said Stephanie von Friedeburg, interim managing director of IFC.

Apart from the fast track loans, IFC has also committed an additional USD 2 billion for financing healthcare providers, tourism players, and everything that helps save jobs.

The World Bank Group has the financial capacity to deploy USD 160 billion over the next 15 months, including a potential USD 47 billion, from the IFC in overall support for the private sector.

In August, IFC also launched the USD 4-billion global health platform to help developing countries expand access to medical supplies such as masks, ventilators, test kits and, eventually, a vaccine for the pandemic.

In 2019-20, IFC invested USD 22 billion in private companies and financial institutions in developing countries, to end extreme poverty and boost shared prosperity.

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