The International Finance Corporation (IFC), a member of the World Bank Group, has loaned US$1.3 billion to companies in T&T, according to the latest available data from the IFC's local office at Guardian General building on Maraval Road, Port-of-Spain.
On behalf of the local office, Washington-based communications officer Vanessa Bauza told the Business Guardian in an e-mail on Monday: "Over 16,000 loans for micro, small and mid-sized entrepreneurs (MSMEs) in T&T (are) outstanding for a value of US$1.3 billion."
She was responding to a question asking her to quantify the impact of the work of the IFC in T&T. Impact was the central theme of the IFC's annual report this year.
Bauza said: "We measure our development impact by calendar year. In 2011, the most recent year for which data is available, our clients supported 222 direct jobs in T&T, of which almost 50 per cent were for women; 567 students in T&T, of which 59 per cent were female; US$11 million in purchases from domestic suppliers."
The IFC has four offices in the Caribbean (Trinidad, Jamaica, Haiti, and the Dominican Republic) serving 14 countries, she said.
"Our strategy in the Caribbean focuses on promoting job creation and inclusive growth; helping the private sector respond to the global financial crisis; supporting innovation, competitiveness and regional integration; and providing investments that help companies adapt to and mitigate the effects of climate change," she wrote.
Fiscal year 2010 to 2012 programme highlights for the IFC in the Caribbean include a total of US$579 million in commitments; US$296 million in 11 infrastructure projects to improve competitiveness, 16 active advisory services projects, she said.
The IFC said it is active in all Caribbean member states.
Between fiscal years 2010 and 2012, the IFC invested US$57 million in new commitments in T&T, Bauza said.
Since T&T became a member of the IFC in 1971, the IFC has invested US$598.7 million in the country's private sector. The IFC's fiscal year is from July 1 through June 30. "Because the T&T economy is energy dependent, it's important to focus on helping to diversify the economy and strengthen competitiveness as a means of stimulating growth and creating jobs.
Supporting regional integration and competitiveness by helping strong and export-competitive companies expand outside of T&T is also important."
Also, historically the Government has, and continues to play such a significant role in the economy, the IFC said. The corporation said it is focusing on increasing private sector participation in the economy via public-private partnerships and helping to improve the investment climate in T&T by providing advice and technical assistance to the Government to implement reforms that improve the business climate.
IFC holds equity in Guardian Holdings Ltd
The IFC is helping to support the integration and competitiveness of T&T's financial sector, she said. "We have a $75 million equity investment in Guardian Holdings Ltd, to support the company's expansion and increase access to insurance services in underserved areas of the Caribbean. The investment includes a US$56.25 million investment for IFC's account and an US$18.75 million investment from the IFC African, Latin American and Caribbean Fund, which is managed by the IFC Asset Management Company.
IFC will host its second workshop for risk management and corporate governance in the English-speaking Caribbean in Port-of-Spain, from June 25-27, in collaboration with the Bankers Association of T&T, Caribbean Association of Banks Inc and the T&T Chamber of Industry and Commerce, the IFC said.
Key topics in risk management and corporate governance, such as credit risk and board engagement, will be addressed indepth during the three-day training, the IFC said. The training will target senior management and board members from financial institutions, credit unions and other financial entities from the English-speaking Caribbean.
The World Bank and IFC are jointly providing technical assistance to support the Government of T&T in promoting a better investment climate, she said. The work has focused on two areas: support to regulatory and administrative reforms reflected in the Doing Business Report, and second, strengthening of a strategy for investment promotion and special economic zones.
She said the first area of the project aims to stimulate inclusive growth and enhance competitiveness by improving the regulatory framework to start a business, obtain a construction permit, transfer property, enforce contracts, and resolve insolvency. The World Bank and IFC provided recommendations that have helped reduce the time required to register a new business, and contributed to other ongoing reforms that for instance will allow public administration to receive e-payments or deliver construction permits more quickly, she said.
In the second area, recommendations suggested a rationalisation of the institutional framework for investment promotion, and setting up of a work plan to improve the framework for the development of industrial sites in Trinidad.
A joint World Bank and IFC team advised the T&T Government on a telecoms/broadband strategy to promote widespread access to high-speed broadband services throughout the country as a significant driver for economic growth and an important part of building a knowledge-based economy, Bauza said.
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Campus project
Bauza said the IFC provided US$5 million to the "Institute of Business in Port-of-Spain, T&T, to support the construction of a new campus."
She said the IFC is helping Caribbean central banks increase access to finance by improving local credit reporting systems, integrating credit data collection, and introducing greater transparency. The IFC provides, she said, a range of technical expertise, including the development and drafting of credit reporting legislation and regulations. Credit reporting systems allow financial institutions to share credit information and better manage lending risks, thereby expanding access to finance for individual borrowers and small businesses.
The IFC is the largest global development institution focused exclusively on the private sector, she said.
"We account for almost a third of all development financing provided to the private sector by international finance institutions. The objective of our projects is to provide an opportunity for people to escape poverty and improve their lives.
We do this in different ways:
�2 Mobilising other sources of finance for private enterprise development
�2 Promoting open and competitive markets in developing countries
�2 Supporting companies and other private sector partners where there is a gap
�2 Helping generate productive jobs and deliver essential services to the poor and the vulnerable."
Regional projects
T&T projects make up 11 per cent of IFC's commitments in the Caribbean since 2000, Bauza said.
"This increases to 31 per cent, if you factor in regional projects with Trinidad components."
The IFC is the private sector arm of the World Bank Group, she said.
"Since 2000, the majority of our commitments in T&T (76 per cent) have been in the financial markets sector. This is aligned with IFC's broader strategy in the Caribbean to provide a systemic response to the impact of the global financial crisis on the economies in the region. IFC's relationship with financial institutions enables it to directly and indirectly invest in job creating sectors. Manufacturing comprises 18 percent of our commitments in T&T. The rest of our work is in the energy sector (oil, gas and mining) and health and education.
As a development finance institution, she said, all of the IFC's projects are aimed at providing opportunities for people to improve their lives.
"We do this through investments and advisory services to the private sector, and/or advisory services to the Government. It can be through a number of ways, including by creating jobs, improving access to education, improving access to finance for small and medium-sized businesses, improving competitiveness by streamlining business regulation procedures, and helping local business take the next step in terms of becoming regional players."
