India: IFC Turns Focus on Funding to Poorer States
Wednesday, November 18, 2009
Mumbai: The private sector lending arm of the World Bank group is sharpening its focus on the bottom of the pyramid.
The International Finance Corporation (IFC) will increase lending to enterprises in seven north Indian states that lag the rest of the country in average incomes and has set up a separate unit that works in these poorer states, the lender’s top manager said on Monday. “We have shifted focus to areas where we can contribute,” said Lars Thunell, executive vice-president and chief executive of IFC.
India is currently the biggest recipient of IFC funding, overtaking Russia, and accounts for around one-tenth of its global portfolio, but Thunell said “the Indian countryside is still under-represented” in its India portfolio. IFC will continue to fund large projects, but its new drive to invest in companies serving the needs of the poorest will lower the size of its median financing deal. The new strategy entails some changes in the way the lender is structured.
IFC has set up offices in Mumbai, Chennai and Kolkata in addition to its main India office in New Delhi, a process that Thunell describes as “massive decentralization”.
He added that employees will no longer be evaluated, incentivized and promoted only on the basis of “big fancy transactions”.