Context:
The International Finance Corporation (IFC) has announced a call for expressions of interest for financial service providers (FSPs) to become intermediaries under its new Catalytic First Loss Guarantee Facility, part of the MSME Finance Platform.
Key Objectives of the Facility
- Expand access to finance for:
- Women-owned businesses
- Agriculture enterprises
- Climate-focused MSMEs
- Demonstrate the commercial viability of these segments
- Pilot innovative products, services, and risk assessment models
What the Facility Offers
- A first loss guarantee for eligible FSPs
- Encourages scaling up lending to underserved MSMEs
- Aims to boost job creation, promote inclusive growth, and foster sustainable development
Why This Matters
- MSMEs make up:
- 90% of firms globally
- 70% of total employment
- 50% of GDP on average
- Current MSME finance gap:
- $5.7 trillion, expanding to $8 trillion when including informal enterprises
Eligibility Criteria for FSPs
- Regulated banks, NBFCs, digital lenders, leasing, and microfinance institutions
- Must be authorized to lend or lease as per local regulations
- Must meet IFC’s qualification requirements:
- Environmental & Social Risk Rating (ESRR)
- Integrity Due Diligence (IDD)
- Proven financial and operational capability
- Positive developmental impact
About IFC:
- Part of the World Bank Group
- Operates in 100+ countries
- FY24 commitments: $56 billion
- Mission: Mobilize private capital to support sustainable development and eliminate poverty in emerging markets
- Website: www.ifc.org
This initiative reinforces IFC’s commitment to unlocking inclusive finance and climate-aligned economic growth by leveraging partnerships with local fin
