New Delhi, June 3 (KNN) The International Finance Corporation (IFC), a member of the World Bank Group, on Tuesday announced the launch of the US$8 billion MSME Finance Platform aimed at micro, small and medium enterprises (MSMEs). Therefore, financing should be increased.

The MSME Finance Platform will provide financing packages of up to USD 4 billion directly from IFC to financial service providers who prefer to lend to MSMEs, particularly women-owned or focused on agriculture and climate solutions. Focus.

The platform uses an innovative approach to mobilize additional private capital through credit enhancements such as catalytic first loss guarantees.

These increases are expected to mobilize an additional USD 4 billion in MSME financing from participating lenders, doubling the program’s overall impact to USD 8 billion.

“MSMEs are the backbone of most developing economies, yet access to financing remains a critical barrier to their potential,” said IFC Managing Director Mukhtar Diop. “This new platform provides critical support to these critical businesses by empowering financial institutions to address these challenges directly.”

Despite comprising more than 90 percent of firms globally and generating an average of 60-70 percent of employment and 50 percent of GDP, according to the SME Finance Forum, a financing gap of US$5.7 trillion remains for MSMEs worldwide.

In emerging markets in particular, strong MSME sectors are essential drivers of economic growth, job creation, and poverty reduction.

Recent crises have weakened the ability of many financial institutions to meet stringent lending standards, leading to tighter credit conditions that disproportionately affect MSMEs.

As the largest development finance institution focused on private sector development, IFC aims to leverage its risk capital through this platform to mobilize growing MSME credit.

The International Development Association’s Private Sector Window will provide up to USD 100 million to support platform activities in low-income countries.

Additional funding from IFC’s SME Finance and Women Entrepreneurs facilities will encourage lending to agribusiness and women-owned MSMEs, respectively.

(KNN Bureau)

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