Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Saturday, December 16, 2017 09:03:56 PM
Follow Us On: Facebook Twitter Twitter Twitter Twitter
BREAKING NEWS:

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

International »

Trump promises `giant tax cut` as `Christmas gift` to Americans


PTI, Washington :US President Donald Trump today said the Congress has reached an agreement on tax legislation that will deliver more jobs, higher wages, and "massive tax relief" for American families and domestic companies.Trump recognised the tax reform as a campaign promise during his run-up to the 2016 presidential election, ...

Editorial »

Muslim leaders must continue to act together not to be ignored


WE welcome the OIC's (Organisation of Islamic Cooperation) decision declaring East Jerusalem as capital of Palestine at a summit at Istanbul on Wednesday as the most appropriate and timely action to denounce US President Donald Trump's unilateral declaration that Jerusalem is the capital of the state of Israel. Their call ...

Football »

Players of A Level team, the champions of the Inter-Class Victory Day Football Competition of Manarat Dhaka International School & College with the teachers of Manarat Dhaka International School & College pose for a photo session at Manarat College field on Thursday.


Entertainment »

Meryl Streep is the most Golden Globe-nominated actor


Meryl Streep has begun her Hollywood award season dominance by bagging her 31st Golden Globe nomination, which is a record in the 75-year history of the award show. Streep won the nomination in the best actress, drama category for her portrayal of the Washington Post publisher Kay Graham in Steven ...

Entertainment »

Porimoni, Zayed Khan`s Antorjwala releases today


Entertainment Report :Today across the country in 175 cinema halls Malek Afsari directed and Porimoni-Zayed Khan acted much awaited movie Antorjwala is set to be released. On the occasion its releasing Pori and Zayed will enjoy the movie along with director Malek Afsari in Dhaka’s Modhumita, Shyamoli and Sony halls.While ...

City »

Speaker Dr Shirin Sharmin Chowdhury handing over ICT Award to Director General of Health Department Prof Dr Abul Kalam Azad for his contribution in using digital technology in health services at Bangabandhu International Conference Center in the city on Tuesday.


Weekend Plus »

Quick recipes for the burger-lover in you


Weekend Plus Desk :If you are a burger lover or want to fix a burger quickly for uninvited guests, here are a few recipes which can save the day. Recipes by Chef Gaurav Chadha, in-house chef, Dr Oetker India Pvt Ltd:* Chicken and egg burger: Heat oil in a kadhai ...

Editorial »

Attack on New York City is disgusting


AN attempted terrorist attack in a New York City bus terminal by a US national of Bangladesh origin has caused widespread surprise and condemnation here and also in the Bangladesh community in the USA. The person Akayed Ullah at his 27 is a taxi driver in New York City and ...

International »

US embassy unlikely to move to Jerusalem before 2020: Tillerson


Xinhua, Washington :U.S. Secretary of State Rex Tillerson said Tuesday the U.S. embassy in Israel was unlikely to be moved to Jerusalem before 2020, national media outlets reported."It's not going to be anything that happens right away," U.S. news daily the New York Times quoted Tillerson's speech at the State ...

Football »

Crystal Palace's James McArthur (centre) celebrates scoring his side's second goal of the game with team-mates during the English Premier League match between Crystal Palace versus Watford at Selhurst Park, London on Tuesday.


Sports »

A scene from the SA Group Premier Division Chess League at the Auditorium of the National Sports Council Tower on Wednesday.


Entertainment »

Akshay shares the new poster of PadMan while giving the hint about trailer


Akshay Kumar is gearing up for his next release PadMan which is all set to release on Republic Day, 26th January 2018. Recently Akshay is on spree of releasing new posters of the films. A day before yesterday Akshay shared a poster of the film in which he can be ...

City »

DU VC Prof Aktaruzzaman speaking at a seminar on' Mass Media Vs Social Media at TSC organised by the Dhaka University Journalists Association on Wednesday .


Editorial »

Colleges without enrolment should cease to exist


OVER 1,500 colleges are in fear of closure as they have failed to fulfil the condition of the Education Ministry in terms of students' admission at Higher Secondary level, The concern is genuine because opening of new colleges and also their closure is not small thing, as it impacts lives ...

Cricket »

A good number of spectators arrived at the Sher-e-Bangla National Cricket Stadium to watch the final match of the AKS Bangladesh Premier League (BPL) Twenty20 Cricket between Rangpur Riders and Dhaka Dynamites at the Sher-e-Bangla National Cricket Stadium in the city's Mirpur on Tuesday.


 
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