Washington, September 12, 2011—IFC,
a member of the World Bank Group, will invest $100 million in a capital
release fund, marking the first time IFC will join private investors
to help banks free up existing capital and use it to boost loans to small-
and medium enterprises in emerging markets.
The fund, established and managed by New York- and London-based Christofferson,
Robb & Company, is raising an additional $300 million from private
investors, in conjunction with IFC’s investment. The fund’s investments
will provide risk protection for unexpected credit losses on portfolios
of loans to small- and medium-sized firms in emerging markets. In exchange
for the protection, banks will be able to use capital that otherwise would
be tied up to comply with global banking rules and extend more loans to
SMEs in developing countries.
The investment reflects IFC’s commitment to improving access to finance
for SMEs in developing countries. These firms play an important role in
stabilizing economic and political environments in emerging markets—by
helping expand the middle class. SMEs are also a primary engine of job
creation and retention, innovation, and poverty alleviation. Inability
to obtain financing is a main constraint to growth for these businesses.
"This innovative fund will enable banks to increase lending to small-scale
firms in developing countries at a time when it might otherwise be difficult
to raise capital,’’ said IFC Executive Vice President and CEO Lars Thunell.
“Going forward, this fund and others like it will provide businesses in
emerging markets access to the financing they need to expand and employ
Richard Robb, CEO of Christofferson, Robb & Company, said: "IFC
is playing a key role in attracting private investment to this fund. This
will enable more financing for small- and medium-sized firms in emerging
markets, where investors are under exposed. We anticipate that the scope
for such transactions will grow considerably."
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. We help developing
countries achieve sustainable growth by financing investment, providing
advisory services to businesses and governments, and mobilizing capital
in the international financial markets. In fiscal 2011, amid economic uncertainty
across the globe, we helped our clients create jobs, strengthen environmental
performance, and contribute to their local communities—all while driving
our investments to an all-time high of nearly $19 billion. For more information,
About Christofferson, Robb & Company
For more information, visit www.christoffersonrobb.com