Washington D.C., July 22, 2003
—The International Finance Corporation (IFC) today announced that its small and medium enterprise initiative focusing on South Asia has received €10 million (US$12 million) in grant funding from the European Commission.
This makes the European Commission the largest donor thus far to the SouthAsia Enterprise Development Facility (SEDF). Other donors include IFC, the Asian Development Bank, and the governments of Canada, the Netherlands, Norway, Canada, and the United Kingdom . The contribution also marks the first time that the Commission has funded one of IFC’s programs for SMEs.
“We greatly appreciate this contribution,” said Dimitris Tsitsiragos, director of IFC’s South Asia department. “Targeted small and medium enterprise development initiatives like SEDF are an important part of IFC’s strategy to promote sustainable private sector growth and poverty reduction in developing regions, and we are encouraged to have strong partners like the European Commission who share our vision.”
Added SEDF General Manager Anil Sinha, “The Commission funding will help increase the scale and enhance the impact of our programs, enabling us to bring in stronger, more innovative approaches and international best practice as we work to create a sustainable foundation for small and medium enterprise growth in South Asia.”
The Commission contribution brings SEDF’s donor funding to a total of $37 million. Launched in October 2002, it is now IFC’s best-funded small and medium enterprise facility.
Headquartered in Bangladesh, SEDF gears its programs to small and medium enterprises there as well as in Bhutan, Nepal, and northeast India, places whose private sector is largely made up of small-scale businesses. More than 50 percent of SEDF’s resources are committed to Bangladesh, where IFC and other donors have pledged to help build a thriving private sector, considering it vital to job creation and viable economic expansion.
The European Commission funding is aimed at improving the competitiveness of local firms, enabling them to gain access to modern technology, upgrade management capabilities, and enter new markets. Supporting SEDF also translates into action the emphasis on regional economic cooperation that is outlined by the Commission - Bangladesh Cooperation Agreement.
Many of the target region’s 200,000 registered private companies see their potential for growth and productivity gains held back by a less than supportive business environment, a lack of training and other support services, and difficulties in accessing financing. SEDF offers a range of products and services to these underserved firms, helping fill some of the gaps in the local market. Its core focus is on providing technical assistance to firms in priority sectors, such as agribusiness, ready-made garments, IT, and light engineering, and on helping local banks gain new skills for lending to small and medium enterprises.
To fulfill its mandate, SEDF has also been able to draw on valuable IFC experience, particularly through eight other facilities in developing regions of the world. Managed by the small and medium enterprise department of IFC, together these facilities have more than 330 field-based staff and a combined annual budget of $31 million.
IFC's mission 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, 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. More information is available at
www.ifc.org
and
www.ifc.org/sme
.
