Washington, D.C., July 24, 2003—The
International Finance Corporation, the private sector arm of the World
Bank Group, is expanding its financial markets advisory services, establishing
IFC as a major provider of technical assistance to emerging markets in
creating sustainable, diversified financial systems.
According to Highlights 2002-03, the first annual publication on
IFC’s Financial Markets Advisory Services, the advisory services portfolio
has increased by $5 million each year since 1997. As of March 1, 2003,
the portfolio amounted to nearly $26 million in 70 countries, with a pipeline
of projects of another $28 million under review.
IFC’s technical assistance indirectly provides access to capital for corporations
and financial institutions as well as entrepreneurs, small businesses,
and home buyers around the globe. In Russia, for example, the Leasing Development
Project undertaken by the IFC-managed Private Enterprise Partnership and
completed earlier this year, involved drafting and promoting amendments
to tax provisions affecting leasing that were enacted in 2001 and 2002.
Those changes helped catalyze a competitive leasing industry in the country
that today approaches $2.3 billion in size.
“We strongly adhere to the view that finance is critical to economic and
private sector growth and that finance begins at home,” said Peter Woicke,
executive vice president of IFC. He noted that global capital is beneficial
but can create serious risks, can be volatile, and is often accessible
only to the largest companies. Technical assistance helps countries create
more stable, more diversified, and higher-quality financial systems that
expand access to capital, helping to reduce poverty and improve people’s
The report shows that IFC has targeted countries with the least developed
financial systems, or frontier markets. Over 65 percent of the technical
assistance was targeted at such markets. Other highlights include:
· About 60
percent of technical assistance for financial markets was aimed at improving
access to finance for small and medium borrowers.
· IFC promotes
sustainable financial institutions and markets through extensive institution-building
efforts and corporate governance initiatives.
in leasing, housing finance, securities markets, and insurance and contractual
savings accounted for 40 percent of projects.
· Key regions
for projects underway were Southern Europe and Central Asia (35 percent
of projects), East Asia (24 percent) and Africa (11 percent).
In the future, strengthening micro and small business finance is expected
to continue to be a major focus of activity. Frontier markets are projected
to receive an even larger share of future technical assistance. Housing
finance is expected to play a larger role, particularly to improve access
to housing finance loans in Africa, Latin America, the Middle East and
North Africa, and Southern Europe and Central Asia. The full report can
be viewed online at http://www2.ifc.org/news/FMTA2002-03.pdf
The mission of IFC is to promote sustainable private sector investment
in developing countries, helping to reduce poverty and improve people's
lives. IFC finances private sector investments in the developing world,
mobilizes capital in the international financial markets, helps clients
improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY02, IFC has committed more than $34 billion of its own
funds and arranged $21 billion in syndications for 2,825 companies in 140
developing countries. IFC's worldwide committed portfolio as of FY02 was
$15.1 billion for its own account and $6.5 billion held for participants
in loan syndications.