Press Releases

IFC, U.K. Government Invest in Global Facility to Finance Small Businesses in World’s Poorest Countries

In Washington, D.C.:
Name: John McNally

Phone: (202) 458-0723


Washington D.C., April 20, 2012—IFC, a member of the World Bank Group, today announced a $200 million investment in the new Global SME Finance Facility, the first global platform of its kind to blend donor funding with funding from international development institutions to expand lending to small businesses in emerging markets.  

The United Kingdom’s Department for International Development (DFID), with an investment of $63 million, is the facility’s first donor. The facility will support high-impact projects with higher risk profiles, such as in conflict-affected areas of Africa and South Asia, women-owned businesses, and those engaged in sustainable-energy and climate-change activities. It is expected to fund about 600,000 small businesses—a quarter of which will be women-owned—over its 10-year lifetime.  

Lars Thunell, IFC Executive Vice President and CEO, said, “Small and medium enterprises are a vital engine of job creation in developing countries. Yet they face a huge financing gap—especially in Africa, where SMEs need three times more funding than is currently available. This facility will help narrow the gap, creating opportunity for entrepreneurs who need it most.”

Andrew Mitchell, U.K. Secretary of State for International Development, said, "We have no chance of defeating global poverty unless we unblock commercial lending and allow entrepreneurs the chance to thrive in some of the most neglected parts of the world. Entrepreneurs don’t want handouts. They want opportunities to help them pull themselves out of poverty. To do this, they need investment to build their businesses and create stable jobs. Using expert banking knowledge and new technology we will be able to kick start the engine of growth."

By blending funds from DFID and other anticipated donors with commercial funds from international financial institutions, the facility aims to reduce the risks and costs of lending to small and medium enterprises (SMEs) by sharing risks with banks, improving their ability to identify and underwrite SMEs, and strengthening critical financial infrastructure. DFID will also provide $52 million for an advisory component to strengthen the business environment, develop financial infrastructure and commercial banks’ capacity for SME financing. DFID will provide $4 million for grants to winners of the G-20 SME Finance Challenge and for operational support of the Global SME Finance Forum, a knowledge Web-platform.

The facility will be a global platform for international development institutions to collaborate to address the SME finance gap in developing markets. It reflects the importance placed by IFC on small and medium businesses and responds to the G-20 call for an improved financing framework for SMEs in developing markets.

IFC and other development institutions will invest a combined $600 million through the facility in the first phase, of which $200 million is from IFC’s own account. Over time the facility could grow to $1.8 billion with funds from additional development institutions and donors.  

Over the last 10 years, IFC has played a significant role in expanding access to finance for SMEs and has worked in an advisory capacity to the G-20. IFC provides investment and advisory services to SMEs in more than 80 countries and focuses on every phase of SME development—investment-climate reform, building management skills, access to finance, and access to markets.

About IFC

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, visit

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