Loans and grants to developing country governments and loans to private sector financial institutions and businesses, large and small, make up a significant part of the work of the World Bank Group, which is to promote economic growth in order to alleviate poverty. This page briefly describes the Bank Group's lending operations and contains information about how to apply for loans and gain access to the extensive range of financial services available.
Private Sector Finance from the International Finance Corporation (IFC) The IFC offers numerous financial products to the private-sector in developing countries. It helps private companies in the developing world mobilize financing in international financial markets, and it can and does provide technical advice. To be eligible for IFC financing, a project must be located in a developing country which is an IFC member; technically, environmentally and socially sound; benefit the local economy; and have good prospects for profitability. For information and tips on submitting investment proposals, as well as contact information for industry, sector and regional departments, click here.
Financing Syndicates and Partnerships IFC funds lent to intermediaries are used to extend long-term financing to private-sector businesses-particularly small and medium sized firms-that usually carry high transactional costs. Examples include IFC credit and equity lines to local banks for lending to local companies, private equity placements, and investments in emerging market and venture capital funds. Partnering with and investing in local financial institutions in developing countries helps channel capital to companies that large investors usually disregard.
Small and Medium Enterprise Department The IFC's Small and Medium Enterprise Department works to promote small business growth in developing countries through building better business environments. This often means governments putting in place more business-friendly regulatory, tax and trade policies. The department also offers direct technical assistance and capacity building programs to improve the skills of small and medium enterprise owners and strives to increase their access to capital and information technology.
Consultative Group to Assist the Poorest (CGAP) The World Bank is a donor member of CGAP, a consortium of 33 public and private development agencies that work together to expand the access of poor people in developing countries to permanent financial services. CGAP supports microfinance institutions and provides services such as advice, training, research and development, consensus building on standards, and information dissemination. The clients of microfinance are female heads of households, pensioners, displaced persons, retrenched workers, small farmers, and micro-entrepreneurs. They all need loans to start and grow their small businesses; and they fall into four poverty levels: destitute, extreme poor, moderate poor and vulnerable non-poor.
The World Bank offers two types of lending instruments to client governments:
Investment loans finance goods, works, and services in support of economic and social development projects in a broad range of sectors. They provide long-term (5-10 year) financing for a range of activities aimed at creating the physical and social infrastructure necessary for poverty alleviation and sustainable development.
Development Policy loans provide quick-disbursing, short-term (1-3 year) assistance to countries with external financing needs, to support structural reforms in a sector or the economy as a whole. They support the policy and institutional changes needed to create an environment favorable to sustained and equitable growth and focus on structural, financial sector, and social policy reform, and on improving public sector resource management.
Investment and Development Policy Lending provides information on both types of lending instruments, including eligibility, design features, disbursement of funds and examples of different forms of Investment and Development Policy loans.
Guarantees and Risk Management Products A range of investment guarantees, hedging and political risk insurance products are offered in an effort to boost direct foreign investment in developing countries. Covering risks the private market is unable to bear, the Bank Group's guarantees and risk management products open new investment opportunities for businesses in developing countries.
Grants A limited number of World Bank grants for development projects are available to encourage innovation, collaboration with other organizations, and participation by stakeholders at national and local levels. Many are designed for small and medium enterprises and are either funded directly or managed through partnerships.
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