Washington, September 12, 2011
—IFC, a member of the World Bank Group, will invest $100 million in a capital release fund, marking the first time IFC will join private investors to help banks free up existing capital and use it to boost loans to small- and medium enterprises in emerging markets.
The fund, established and managed by New York- and London-based Christofferson, Robb & Company, is raising an additional $300 million from private investors, in conjunction with IFC’s investment. The fund’s investments will provide risk protection for unexpected credit losses on portfolios of loans to small- and medium-sized firms in emerging markets. In exchange for the protection, banks will be able to use capital that otherwise would be tied up to comply with global banking rules and extend more loans to SMEs in developing countries.
The investment reflects IFC’s commitment to improving access to finance for SMEs in developing countries. These firms play an important role in stabilizing economic and political environments in emerging markets—by helping expand the middle class. SMEs are also a primary engine of job creation and retention, innovation, and poverty alleviation. Inability to obtain financing is a main constraint to growth for these businesses.
"This innovative fund will enable banks to increase lending to small-scale firms in developing countries at a time when it might otherwise be difficult to raise capital,’’ said IFC Executive Vice President and CEO Lars Thunell. “Going forward, this fund and others like it will provide businesses in emerging markets access to the financing they need to expand and employ more people.’’
Richard Robb, CEO of Christofferson, Robb & Company, said: "IFC is playing a key role in attracting private investment to this fund. This will enable more financing for small- and medium-sized firms in emerging markets, where investors are under exposed. We anticipate that the scope for such transactions will grow considerably."
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
www.ifc.org
About Christofferson, Robb & Company
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