IFC Financial Institutions Group (FIG) Equity Industry Context IFC Strategy and Portfolio Companies need risk capital to succeed and IFC invests directly in companies’ and financial institutions’ grow, but equity remains scarce in most equity and also through private equity funds. IFC encourages emerging markets. Over the last few years, the companies it invests in to broaden share ownership through public macroeconomic environment for equity investing listings, thereby deepening local capital markets. FIG’s equity has shifted substantially, with higher-for-longer strategy supports climate change, digital transformation, and interest rates and inflation figures, as well as financial inclusion, and plays a key role in mobilizing equity from intensified geopolitical risks and increased volatility other investors. FIG’s equity investments encompass all regions spurring trade and investment restrictions. By and include commercial banks, non-banking financial institutions, providing equity to its investees, IFC is providing microfinance institutions, and insurance companies. FIG equity long-term capital that is not only catalyzing their investments in financial institutions have largely been in transition growth and the development of the sector, it is economies with bank privatizations and transformations, crisis also entering into a partnership that allows IFC to response investments, and with a focus on financial inclusion. IFC is influence and advance ESG principles and higher increasingly prioritizing equity investments as central to the WBG’s standards. broader efforts to meet the Sustainable Development Goals. FIG’s Equity Investments as of March 2024 $2.8billion World (Global) $535m Europe $98m East Asia & Pacific Middle East, Central $429m Asia & Türkiye $81m South Asia Latin America $904m & Caribbean $465m Africa $253m Investment & Advisory Examples FEDERAL BANK (INDIA) THAI CREDIT BANK (THAILAND) India’s micro, small, and medium enterprises (MSMEs) are The financing gap for MSMEs in Thailand is estimated at critical drivers of growth, production, and job creation, approximately $40 billion, or 10% GDP and around $25 making them essential to the country’s sustainable socio- billion for WMSMEs. Thai Credit Bank is the only Thai bank economic development and inclusive growth. Federal Bank that focuses on underserved segments in Thailand. IFC Limited (FBL) is the seventh-largest private sector bank made an equity investment of $30 million as a cornerstone in India by assets and has a pan-India branch network of investor in an Initial Public Offering (IPO) of TCB. TCB will 1,355 branches, with 65 percent of branches in semi-urban continue leveraging its extensive local networks to grow and rural India. IFC invested primary equity in FBL for its outstanding loans to MSMEs. The project will be a approximately $100 million equivalent. The primary equity continuation of IFC’s systematic efforts to promote financial will strengthen the Bank’s Tier 1 capital adequacy ratio, inclusion in Thailand and signal confidence in TCB’s inclusive which will allow it to accelerate its lending. The investment business model. IFC’s cornerstone participation mobilized will support the Bank’s commitment to financial inclusion $184 million in third party private funding and crowded and operationalize its strong commitment to sustainability in other investors to further support the Bank’s strategy and climate finance. The project will complement IFC’s focusing on MSMEs, digitalization and sustainable finance. ongoing digital advisory engagement with FBL to continue to focus on building its digital capabilities. VASTU AFFORDABLE HOUSING (INDIA) India faces a significant massive shortage of affordable PVI (VIETNAM) housing units as well as affordable housing finance. IFC Given the low penetration and modest density, Vietnam’s invested $40 million in Vastu Housing Finance Corporation non-life insurance gap remains large in comparison with Limited (Vastu), a non-banking financial company – housing other emerging market economies. PVI Holdings (PVI) is finance company, which provides affordable housing finance the largest non-life insurance company in Vietnam and 35 to lower and middle-income segments and loans against percent owned by PetroVietnam, the largest state company properties (LAP) to MSMEs in India. IFC’s investment will wholly owned by the Vietnamese government. IFC’s equity aid Vastu in further capitalizing the pick-up in credit growth investment furthers IFC’s programmatic approach to in the affordable housing segment. IFC’s investment will strengthening corporate governance practices in Vietnam also help Vatsu offer green affordable housing loans to and contributes to the government’s effort to reform its customers, enhance their micro-housing and gender the SOE sector. IFC will introduce corporate governance offerings, and improve their environmental and social (E&S) initiatives that will lead to improvements and strengthening and climate risk governance. IFC’s support to Vastu as a of the overall decision-making process, risk management, stable long-term equity investor sends a strong positive and operation at PVI. signal to the market and demonstrates confidence in the company. International Finance Corporation 2121 Pennsylvania Avenue NW, Washington, DC 20433 www.ifc.org | www.ifc.org/FinancialInstitutions