AVENUES AND OPTIONS FOR INCLUSIVE
LIVELIHOODS – IFC EXPERIENCE
THE LIVELIHOODS ASIA SUMMIT 2014
Jeeva Perumalpillai Essex,
Manager, Advisory Services
IFC: A MEMBER OF THE WORLD BANK GROUP
IBRD
IDA
IFC
MIGA
ICSID
International
Bank for
Reconstruction
and
Development
International
Development
Association
International
Finance
Corporation
Multilateral
Investment
and
Guarantee
Agency
International
Centre for
Settlement of
Investment
Disputes
Loans to
middleincome and
credit-worthy
low-income
country
governments
Interest-free
loans and
grants to
governments
of poorest
countries
Solutions
in
private
sector
development
Guarantees
of foreign
direct
investment’s
noncommercial
risks
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Conciliation
and
arbitration of
investment
disputes
WHY PRIVATE SECTOR IS CRITICAL FOR POVERTY?
Imagine
Bangladesh
without the
garment
sector
industry?
Or Sri Lanka and Maldives
without its tourism?
Or Bhutan where
power generation
sector had not
been tapped?
Or Nepal not
exporting Pashminas
to the world and with
an untapped
hydropower sector?
And India without
proper infrastructure
and more!
The private sector is recognized as a critical stakeholder and partner
in economic development, a provider of income, jobs, goods, and
services to enhance people’s lives and help them escape poverty..
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DEVELOPMENT: THE PRIVATE SECTOR’S ROLE
Complementing
Governments by
Strengthening
Economies by
Improving Lives
by
• Identifying Business Opportunities
• Providing Knowledge and Capital
• Creating Jobs
• Increasing Innovation
• Building Competition and Efficiency
• Generating New Tax Revenue
• Creating Opportunity
• Raising Living Standards
• Reducing Poverty
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector
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WHAT WE DO
Integrated Solutions, Increased Impact
INVESTMENT
ADVICE
 Loans
 Firm-level advice
 Equity
 PPP transaction
advice
 Trade finance
 Syndications
 Securitized finance
 Risk management
 Blended finance
$51.7 bn portfolio
(FY14)
 In partnership w/World
Bank, advice on
broader market
development and
enabling environment
for private sector
720 projects valued at
$1.1 bn (FY14)
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IFC ASSET
MANAGEMENT
COMPANY
 Wholly owned
subsidiary of IFC
 Private equity fund
manager
 Invests third-party
capital alongside IFC
$6.4 bn under mgmt
(FY14)
BANGLADESH
The Reach of IFC’s Projects 2014
• 2.6 million jobs
• Health services to 27 million
patients
• Education to 2.5 million students
• Improved opportunities for 2.9
million farmers
• Power and gas to 64 million
customers
• Water distribution to 30.3 million
people
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IFC PROVIDES ADVISORY SERVICES FOR LIVELIHOOD
PROMOTION
STRATEGIC COMMUNITY INVESTMENT
FARMER TRAINING
SME VENTURES
INCLUSIVE BUSINESS MODELS
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STRATEGIC COMMUNITY INVESTMENT
Helps clients design local investment strategies that increase
productivity and loyalty while mitigating risks via:
building local supply chains
strengthening government tax/royalty management
training community monitors
increasing stakeholder engagement.
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COMPANIES DISTRIBUTE BENEFITS TO COMMUNITIES IN 3 KEY WAYS:
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WE OFFER CLIENTS THE FOLLOWING SERVICES
Stakeholder engagement planning
Monitoring and evaluation plans
Community investment strategy
Increasing participation of local
development
businesses in supply chain
Business case for community
Business skills training for local
spending
entrepreneurs
Risk identification and prioritization
Promoting female workforce
Financial Valuation Tool for
Water risk / footprint assessment
Sustainability Investments
Royalty management
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FARMER ENGAGEMENT
Supply Chains /
Smallholders
Better training delivery
Farmer engagement and
aggregation models
Traceability solutions
Farmer aggregation models
& methodologies
Enhance farmer productivity
and income
E&S Sustainability
Improved E&S practices and
performance
Food safety management
systems
Responsible land use –
company and community
engagement
Mitigate risk for clients
and investors
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Climate Smart
Agriculture
Agri water efficiency
Climate resilient crops
varieties, cultivation
practices and technology
Agricultural inputs
Food processor resource
efficiency
Produce more with fewer
resources
SUPPLY CHAINS – ECOM NICARAGUA
Featured on
the Forum
Client Need
• Rebuild farmer supplier base affected by coffee
leaf rust
• Build internal capacity to manage long term
lending to farmers
• Strengthen extension services to farmers to
support coffee replanting
IFC Advisory
Expected Results
• Provide advice on LT loan lending technology and
portfolio management
• Improve technician training program
• Develop a renovation marketing plan and
producer communications
• Monitor the roll-out of the lending and agronomic
program with Ecom
• Renovate 5,000 ha of coffee plantations
• Support 500 farmers to replant 5,000 HA of
coffee plantations with resistant varieties
• Establish an Ecom technician accreditation
program
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SUPPLY CHAINS – DSCL INDIA
Featured on
the Forum
Client Need
• Low farmer productivity – only 66% capacity
utilization of sugarcane crushing plant
• Limited knowledge of good agricultural practices
IFC Advisory
Results
• Designed training for farmers on good
agricultural practices related to seed
management, soil improvement, water usage
and planting
• Implemented an effective monitoring and
reporting system
• Developed delivery model to ensure information
is on time and accurate
• Trained farmers obtained sugarcane yields
that were 79% higher than the yields of
those who did not receive any training
• Initially 2,000 farmers received training –
this was scaled up to over 17,500 farmers
• The project is expected to be expanded to
reach 50,000 farmers and, ultimately, all
150,000 farmers in DSCL’s supply chain
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E&S SUSTAINABILITY – JAIN IRRIGATION INDIA
Client Need
• Meet international buyers requirements on
farm level practices and pesticide use
• Develop a cost effective internal standard
that meets buyer requirements and factors
supplier capacity
IFC Advisory
Results
• Adapted GLOBALGAP standard to meet
buyer requirements and created JAINGAP
• Reduced cost for both processor and
farmers while improving farm level
practices
• Prepared supply chain for eventual full
GLOBALGAP compliance if/when it is
required by the market
• Certified 1340 farmers
• Covered 2189 hectares
• National IndiaGAP standard used
JAINGAP step-wise approach for
certification
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SME VENTURES
• SME Ventures was created in 2008 with a $100 million allocation for SME funds investments + advisory in
response to demand for access to finance for SMEs in Fragile and Conflict Affected States (FCS)
• The program includes 4 risk capital SME funds covering six fragile countries including DRC, CAR, Sierra Leone,
Liberia, Bangladesh, Nepal, Bhutan (fundraising) and Yemen (on indefinite hold)
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UNIQUE COMBINATION OF RISK CAPITAL & ADVICE FOR SMES IN
THE FRONTIER
8 Countries (so far)
Our Role
Bring financial innovation and
growth to the frontier
Macro
Sierra Leone, Liberia, DRC, CAR,
Nepal, Bangladesh,
Haiti and Rwanda
Intermediary
Micro
Investment
Advisory
IFC investment in funds
Loans, quasi-equity, and equity for
SMEs ($500k max)
IC, governance, E&S, fund
manager capacity building, SME
training
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LEARNING : INCLUSIVE BUSINESS MODELS
a. Development Marketplace: competitions targeting low income states. 3 held in
2011, 2013 and 2014 with 46 social enterprises awarded grant and TA across 9
states.
b. Development of PRISM tool: with GIZ and Intellecap that provides an impact
measurement and fund performance framework for impact funds.
c. Mapping studies: Extensive Health sector mapping study conducted in India and
Bangladesh to identify innovative and scalable inclusive models in health.
d. South - South replication:. Intra south Asia as well as India Africa. A replication
readiness framework being developed to help social enterprises assess their
readiness to replicate their model.
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Thank you…
Questions?
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