IFC, the lending arm of the World Bank, has partnered with Partners For Growth(PFG), a US-based fund manager, to provide capital to fintechs, software firms and those dealing with e-health and life sciences.
The International Finance Corporation(IFC) will put $30 million into a special purpose vehicle run by the US fund manager.
This facility is designed to cater to firms in emerging markets and is IFC’s first partnership with a private fund manager focused on venture and growth-stage markets.
PFG will collaborate with Silicon Valley Bank as its strategic partner in this venture.
According to Paulo de Bolle, IFC Global Senior Director, the pandemic has created increased uncertainty and risk aversion in emerging markets, cutting down the amount of credit available to small and mid-sized firms.
He said the partnership between IFC and PFG aims to improve access to finance for high growth tech firms and digital businesses, which have boomed in the last two years due to the COVID-19 pandemic.
The partnership will encourage and grow small and medium-sized firms in the tech sector while enabling new financial services providers to flourish.
According to Andrew Kahn, Managing Director and CEO of PFG, fintechs provide services to the unbanked, improving financial inclusion and boosting economic growth in emerging markets.
While providing debt capital, this partnership will also boost growth of the private sector debt market in these countries.
PFG, which specializes in alternative debt investments in growth companies, has raised seven funds and invested over $1.2 billion into more than 220 companies through custom debt instruments.
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