IFC Extends Loans Worth $4 Billion To Private Companies To Fight Pandemic
An employee wearing protective gloves counts U.S. dollar banknotes. (Photographer: Dimas Ardian/Bloomberg)

IFC Extends Loans Worth $4 Billion To Private Companies To Fight Pandemic

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The International Finance Corporation on Friday said it has so far extended $4 billion to private sector businesses in the poorest countries to help fight the coronavirus pandemic.

The IFC, which is the largest global development institution focused on the private sector in emerging markets, in March committed $8 billion in fast track financing to help pandemic-hit private sector companies.

"Of the $8-billion pandemic fast track financing approved by our board in March, $ 4 billion have been committed to date, of which close to half is expected to benefit the people in the poorest countries," Mengistu Alemayehu, IFC's regional director for South Asia, said in a statement.

He added that the rest will go to support the fight against the pandemic in other developing countries and emerging markets.

The multilateral lender did not specify how much it has given to Indian businesses, except mentioning a $40-million loan to DCM Shriram Ltd. for mitigating its supply chain disruptions and protecting jobs.

Also read: Top World Bank Economist Says Financial Crisis Could Emerge From Pandemic

IFC's pandemic response is focused on reaching the most vulnerable people in the developing world.

"Supporting the private sector will be crucial to helping developing countries achieve an inclusive, sustainable and resilient recovery, and stem the current rise in extreme poverty," World Bank Group President David Malpass was quoted as saying in the statement.

He added that IFC's goal is to fast-track its pandemic facility to provide needed liquidity for corporate and financial institution clients, which will provide working capital, support jobs and facilitate trade.

Of the $8-billion said amount, $2 billion is under the trade-finance envelope of the fast track facility and, today, it said the entire facility has been deployed most of which has gone to small businesses.

"By supporting the private sector, we are hoping in the longer term to help reignite economic growth, paving the way for a better, more resilient and sustainable future once pandemic recedes," said Stephanie von Friedeburg, interim managing director of IFC.

Also read: Virus Economic Destruction Renews Push Against GDP Fixation

Apart from the fast track loans, IFC has also committed an additional $2 billion for financing healthcare providers, tourism players, and everything that helps save jobs.

The World Bank Group has the financial capacity to deploy $160 billion over the next 15 months, including a potential $47 billion, from the IFC in overall support for the private sector.

Also read: World Bank Sees More Gradual Decline in Remittances Due to Virus

In August, IFC also launched the $4-billion global health platform to help developing countries expand access to medical supplies such as masks, ventilators, test kits and, eventually, a vaccine for the pandemic.

In 2019-20, IFC invested $22 billion in private companies and financial institutions in developing countries, to end extreme poverty and boost shared prosperity.

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