Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Sunday, June 24, 2018 06:38:52 PM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

How IFC is working with financial institutions?

By
13th-Oct-2017       
Comments
Share your thought
Post a comment »
Read all () »

Philippe Le Houérou :
Last April, I wrote about the changes we are making as we re-examine our engagements with financial institutions, or FIs. We are doing this in order to create a more responsible banking system, as well as to boost financial inclusion globally. I want to provide an update on our progress in the past six months.
My commitment was that IFC would be more selective in terms of our financial intermediary investments and lending. We can report now that we have been more selective, but that we still face challenges in some other areas in our engagement.
In the last fiscal year, we have increased our targeted investments. For instance, we tripled our climate commitments with financial intermediaries, with more than $1.4 billion going to this sector. Our clients also made about 8.3 million loans to small- and medium-sized enterprises and 54 million microloans last year. Overall, 35 percent of our FI projects were in our category of the poorest countries - called IDA - and we exceeded our targets for investing in fragile and conflict-affected countries.
Our staff and management make every effort to ensure that we reduce our exposure to higher risk FI activity and apply greater selectivity to these transactions. In the last fiscal year, for instance, we financed five projects that we classify as higher risk under our Sustainability Policy, compared to 18 in FY16. We have also been reducing the number of general lines of credit. In fact, we have turned down several large deals in FY17 because of our greater selectivity.
Enhanced client support
We are also making progress on the support we provide to our portfolio clients. We have just completed a successful pilot project in Latin America and Asia, where we provided enhanced support to 15 higher risk FI clients that were either struggling with environmental and social risk management implementation, or operated in markets where standards were low or nonexistent.  
Despite their higher risk profile, these FIs have significant positive impact in their local markets and contribute toward our development goals. Working with these clients requires a greater commitment from us - more time and resources - but this investment is well worth it. We have started rolling this successful model out in other regions and with more portfolio clients. If we find that clients refuse this enhanced support, we will consider ending those relationships.
We have also changed our internal structures to better support the delivery model of environment and social risk management (E&S) to our clients. Now each region has a designated E&S regional sector lead for financial intermediary transactions. These key IFC staff oversee the quality of E&S assessments and supervision of FI clients performed by our dedicated E&S specialists. An additional global sector lead has been appointed to ensure consistency across regions.
In April, I also committed to greater transparency of how our FI funds are used. When we talk, for instance, about making a targeted loan to women-owned business, we want to specify the definition of those businesses. On our website, we recently provided clear definitions of targeted sectors, including small- and medium-sized enterprises, women-owned businesses, housing finance, and climate business.
And, as committed, we are disclosing the use of these targeted funds to show that they are being used for the stated purpose. For instance, if we sign a deal with a bank for $20 million in loans to small- and medium enterprises, our team will update the public Summary of Investment Information to confirm this deal. This adds another layer of accountability for IFC and its clients.
Raising standards across the finance industry
We also are working to expand transparency throughout the finance industry. We are continuing our efforts to establish an industry working group on disclosure. This has not been easy and has gone slower than we anticipated. As a start, we have mapped existing disclosure practices, and we plan to share a working paper on this issue soon.
Another commitment to bring about systemic change in the finance industry is now unfolding with the IFC-supported Sustainable Banking Network. SBN members represent 34 countries, which collectively cover 85 percent of banking assets from the emerging markets. In the past five years, 15 member countries have already launched sustainable finance policies and voluntary principles with IFC support.
Over the past year, SBN also has developed a new measurement framework to systematically track and measure policy comprehensiveness and adoption across members and countries.  The goal of this exercise is to develop a practical methodology, tools, and indicators that SBN members can apply to their own national contexts, with state-of-the-industry reports issued annually.
Making progress with our FI partners and across the finance industry will take time. But we are committed to raising standards not just with our own projects, but throughout the finance industry. We also are committed to providing regular updates on our progress and our ongoing discussions with all parties interested in these issues.

(Philippe Le Houérou is CEO of IFC. Since joining IFC in March 2016, Mr. Le Houérou has led the organization's efforts to create new markets in developing countries and redefine development finance by promoting initiatives and reforms that unlock billions of dollars in additional private sector investment).

Tariff
Add Rate

News Archive

Inside The New Nation

Editorial »

American people rose against inhumanity of Trump`s immigration policy : Trump remains un-American


US President Donald Trump took an U-turn and changed his own policy amid strong protest by American people.  There are huge criticism and outcry in America over the way undocumented parents and children have been kept forcibly apart. He said he changed his mind by seeing images of children who ...

International »

UN Chief appeals for end to fighting in south Syria


AFP, United Nations :UN Secretary-General Antonio Guterres on Friday called for an immediate end to a military escalation in southwest Syria and a return to ceasefire arrangements agreed by Russia, the United States and Jordan.US Ambassador Nikki Haley separately urged Russia to pressure its Syrian ally to uphold the truce. ...

Football »

Nigeria`s John Obi Mikel (left) and Iceland`s Gylfi Sigurdsson compete for the ball during the group D match between Nigeria and Iceland at the 2018 soccer World Cup at the Volgograd Arena in Volgograd, Russia on Friday.


Football »

Portugal's Ruben Dias talks to journalists during a news conference prior the training session of Portugal at the 2018 soccer World Cup in Kratovo, outskirts Moscow, Russia on Saturday.


City »

Prime Minister and Awami League President Sheikh Hasina inaugurating the newly constructed building of the party's central office by releasing balloons in the city's Bangabandhu Avenue on Saturday.


Entertainment »

Sunny Leone hospitalised


Bollywood star and reality show host Sunny Leone was hospitalised on Thursday. Leone was taken to Brijesh Hospital Kashipur in the Udham Singh Nagar district of Uttarakhand on Thursday after she complained of stomach ache. However, her state was declared satisfactory on Friday morning.The doctor attending her has given the ...

Editorial »

Trump disregards the American core human right values : He is against America`s greatness


The United States withdrew from the United Nations Human Rights Council on Tuesday, condemning the "hypocrisy" of its members and its alleged "unrelenting bias" against Israel vividly face-off US stance in favour of rights violation. National and international news outlets reported that the US ambassador to the UN, Nikki Haley, ...

Entertainment »

Kriti Sanon shares glimpses from her IIFA performance


Actress Kriti Sanon took to social media to share glimpses from her upcoming electrifying performance at the IIFA awards. Kriti Sanon who landed in Bangkok on Thursday morning for IIFA wasted no time as she took to rehearsals for her much-awaited performance. Sharing insights into her performances, Kriti Sanon posted ...

Entertainment »

A fan paints a wall with Nidhhi Agerwal’s graffiti art


An ardent fan of Nidhhi Agerwal took to Twitter to share a Graffiti art of the actress painted on a wall. The fan artist painted a wall with the actress’ image giving showcasing his love for Nidhhi. The artist spent a huge amount of time getting every detail right to ...

Business & Economy »

Amir Uddin, Board Chairman of Al-Arafah Islami Bank Limited, presiding over its 117th meeting at the banks head office in the city on Thursday. Md. Abdus Salam, Abdul Malek Mollah, Khalid Rahim, members of the committee and Habibur Rahman, Managing Director of the bank were also present.


International »

North, South Korea discuss reunion for families separated by war


Reuters, Seoul :Delegations from North and South Korea met on Friday for talks to arrange the first reunions in about three years for families separated by the Korean War, with the Red Cross paving the way.The effort is among the steps promised by North Korean leader Kim Jong Un and ...

International »

Melania visits border, Congress flails on family separations


AFP, Mcallen :Melania Trump made a surprise trip to the US-Mexican border on Thursday as her husband's administration seeks to quell a firestorm over migrant family separations, while Republican lawmakers were forced to delay a high-stakes vote on the crisis.While President Donald Trump's administration struggled to formulate next steps, the ...

Football »

Croatia`s fans celebrate after the match on Thursday.


Football »

Lukaku tells how poverty fired World Cup dream


AFP, Moscow :Belgium striker Romelu Lukaku realised how poor his family was when he saw his mother watering down the milk. The football talent he is showcasing at the World Cup was their passport out of poverty.The Manchester United man has opened up about growing up in Antwerp and his ...

City »

Different kind of fruits have been arranged at the National Fruits Fair in the city's Khamarbari on Friday. The Ministry of Agriculture organizes the fair.


 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news