Berlin, Germany, February 5, 2009—World
Bank Group President Robert B. Zoellick and German Development Minister
Heidemarie Wieczorek-Zeul today launched a $500 million facility that will
support microfinance institutions facing difficulties refinancing as a
result of the global financial crisis and ensure that low-income borrowers
in developing countries continue to have access to finance.
The Microfinance Enhancement Facility,
created by IFC, a member of the World Bank Group, and German development
bank KfW is expected to provide refinancing to more than 100 microfinance
institutions in up to 40 countries. It will support lending to as many
as 60 million low-income borrowers in many of the world’s poorest countries.
“Microfinance plays a critical role
in providing financial services to poor people and fighting poverty,”
said Zoellick. “The Microfinance Enhancement Facility will provide
vital funding and ensure that microfinance continues to stimulate growth,
create jobs, and overcome poverty in emerging markets. I am most
appreciative of the German Government’s support, through KfW, for this
innovative facility at a time of economic danger for the developing world.”
Wieczorek-Zeul, said: “Micro loans
are among the most effective instruments in development. Microfinance institutions
are doing great work around the world. We cannot allow the global financial
and economic crisis to threaten the work of these institutions. We have
to ensure now that those that contributed least to the financial markets
crisis do not suffer most from it. With the new facility, we are helping
to ensure that people continue to escape the poverty trap through microfinance.”
Dr. Norbert Kloppenburg, COO KfW Bankengruppe,
said, "Supporting micro enterprises is highly relevant for development
policy reasons because in developing and transition countries, the smallest
and small businesses act as a motor for growth and for jobs while also
laying the groundwork for safeguarding existing employment. With this facility
we can set a strong example and quickly counteract the current downward
trend in lending to microfinance institutions.”
The Microfinance Enhancement Facility is a short-to-medium term facility
of up to $500 million with initial contributions of $150 million from IFC
and $130 million from KfW. The facility will be managed by BlueOrchard
Finance, responsAbility Social Investments AG, and Cyrano Management, three
of the industry’s leading fund managers. Credit Suisse has been appointed
custodian and administrative agent.
The microfinance industry continues to perform well with microfinance institutions
maintaining healthy portfolios. However, some microfinance institutions
face problems refinancing debt as a result of the global financial crisis.
The Microfinance Enhancement Facility, created by IFC and KfW, is expected
to provide refinancing to strong microfinance institutions.
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous
year. For more information, visit www.ifc.org.
For more information about IFC’s crisis
response, visit www.ifc.org/financialcrisis.
KfW Entwicklungsbank is a competent and strategic advisor on current
development issues. Reducing poverty, securing peace, protecting natural
resources and helping to shape globalization are the main priorities of
On behalf of the German Federal Government
it finances reforms, infrastructure and financial systems for socially
and ecologically compatible economic growth. As part of KFW Bankengruppe
it is a worldwide financing partner, and it also employs funds of its own
for development projects. KfW Entwicklungsbank knows about the potentials
and problems in developing countries thanks to its close cooperation with
local partners and target groups. It actively seeks to cooperate with German
and International partners in order to further enhance the developmental
effectiveness and efficiency of its activities.