The International Finance Corporation (IFC), a global development institution focused on businesses in developing countries, has announced its plan to help support the growth of businesses in parts of Africa and Asia.
IFC, which is a member of the World Bank, has said that it has launched a $225 million venture capital platform to foster the growth of several early-stage private businesses in Africa, Middle East, Pakistan and Central Asia. These regions, according to the IFC, have been receiving less funding, compared to other regions of the world.
Collectively, the regions received less than 2% of $643 billion of global venture capital funding last year, and has regardless, experienced growth with the little it got, and has the potential to contribute US$712 billion to the continent’s gross domestic product (GDP) by 2050.
According to the IFC, the funds will be in form of equity investment in tech startups, and will help the startups grow “into scalable ventures that can attract mainstream equity and debt financing.”
“Support for entrepreneurship and digital transformation is essential to economic growth, job creation, and resilience. […] IFC’s Venture Capital Platform will help tech companies and entrepreneurs to expand during a time of capital shortage, creating scalable investment opportunities and backing countries’ efforts to build transformative tech ecosystems. We want to help develop homegrown innovative solutions that are not only relevant to emerging countries but can also be exported to the rest of the world,” the IFC’s managing director, Makhtar Diop, IFC’s managing director, said.
In the past, the IFC has made investments on startups like Twiga Foods (Kenyan technology food distribution platform), TradeDepot (B2B e-commerce startup connecting brands with retailers), and Toters (an on-demand delivery platform in Lebanon and Iraq). With the platform, IFC will also collaborate with other teams in the World Bank Group to create and bolster venture capital ecosystems through regulatory reforms, sector analyses, and other tools.
The IFC was founded in 1956, and has Makhtar Diop as its CEO. The corporation provides investment, advisory, and asset-management services to private companies in their early stage, it does this to encourage private-sector development in less developed countries. The IFC prides itself as being in the business of increasing sustainable agriculture opportunities,an improve healthcare and education. The IFC also works to increase access to financing for microfinance and business clients, advance infrastructure, help small businesses grow revenues, and invest in climate health.
The IFC has 186 member countries, which includes Botswana, Qatar, China, Nigeria, New Zealand, Kenya, etc.