EMCompass Notes

113 items available

Permanent URI for this collection

http://hdl.handle.net/10986/30315

As part of the Economics and Private Sector Development Vice Presidency, IFC’s Thought Leadership regularly publishes EM Compass Notes as part of its regular work program that includes the dissemination of knowledge, trends and emerging solutions on topics and issues that are of specific interest to companies, multilateral development institutions and regulators. Its purpose is to generate fresh ideas about business in emerging markets. The Notes range from usually 4-8 pages and are geared toward clients and private investors, in addition to the traditional development community.

Items in this collection

Now showing 1 - 10 of 113

Sustainability-Linked Finance: Mobilizing Capital for Sustainability in Emerging Markets

(International Finance Corporation, Washington, DC, 2022-01) de la Orden, Raquel ; de Calonje, Ignacio

Sustainability-linked finance is designed to incentivize the borrower’s achievement of environmental, social, or governance targets through pricing incentives. Launched in 2017, it has now become the fastest-growing sustainable finance instrument, with over $809 billion issued to date in sustainability-linked loans and bonds. Yet these instruments are still nascent in emerging markets, which represent only 5 percent of total issuance to date. This note shares examples of recent sustainability-linked financing, including several involving IFC in various roles, to highlight how investors can utilize these new instruments in emerging markets and mitigate greenwashing risks
Banking on FinTech in Emerging Markets

(International Finance Corporation, Washington, DC, 2022-01) Rose Innes, Cleo ; Andrieu, Jacqueline

Despite near-universal access to financial services in advanced economies, financial exclusion is stubbornly persistent in many emerging markets, leaving huge swaths of low-income populations unbanked or underbanked. FinTech companies, which apply innovative technologies to deliver such services in new ways, have begun to tap into the enormous unmet demand that this represents. These companies are starting to thrive in emerging markets, though regulatory issues, particularly weak consumer protection measures, remain to be resolved in many countries. If these can be overcome, and more progress toward universal access to digital infrastructure can be made, FinTechs will continue to scale and spread.
What Gets Measured Gets Done: Using a Corporate Scorecard to Drive Greater Investment Impact

(International Finance Corporation, Washington, DC, 2021-12) Narayanaswamy, Meera

In 2018, International Finance Corporation’s (IFC’s) shareholders authorized a capital increase of 5.5 billion dollars, the largest increase in its history. The capital increase was based on a strategy that emphasizes creating markets and mobilizing private capital and came with ambitious operational undertakings designed to ensure IFC’s place at the forefront of development finance, and to reinvigorate development in the world’s most challenging environments. To help implement these hefty undertakings, measure progress, and motivate staff, IFC took a fresh look at how the Corporation uses operational targets to achieve strategic goals and overhauled its corporate scorecard. Institutions seeking to implement a transformational strategy, as well as impact investors and development finance institutions balancing financial and impact objectives, can learn from how the revamped scorecard balances risk-taking with prudence, innovation with traditional business priorities, and speed with governance, to drive greater investment impact.
Municipal Broadband Networks: Opportunities, Business Models, Challenges, and Case Studies

(International Finance Corporation, Washington, DC, 2021-11) Houngbonon, Georges V. ; Rossotto, Carlo M. ; Strusani, Davide

The accelerated use of digital services during the COVID-19 pandemic has highlighted the importance of high-speed Internet access. Yet a large share of adults in emerging markets still live in cities where the availability of high-speed Internet is limited. There is a strong case to be made for municipal broadband networks, which are fully or partially facilitated, built, operated, or financed by local governments, often in partnership with the private sector. There are three basic models for creating and operating these networks, and every network must work in the unique context of the city it will serve. But if they are well implemented, these models can offer digital access to city residents, help close the digital divide, and create opportunities for private sector players in both advanced and emerging markets.
Creating Housing Markets in Emerging Market Economies

(World Bank, Washington, DC, 2021-10) Innes, Cleo Rose ; Casabianca, Brian

At the beginning of the 20th century less than 15 percent of people across the globe lived in cities. This figure has risen to 50 percent (4.4 billion people) today and will exceed 66 percent (7.7 billion) by 2050. There is a significant shortfall of housing to meet the needs of people moving to cities, most of whom have limited resources but strong hopes for better educational and employment opportunities. Direct public provision of housing is not affordable for most national governments, so more than 1.6 billion people will struggle to secure housing by 2025. Addressing this under-provision of housing will require connecting capital with low-income urbanizing populations, including solutions to make the private sector more responsive to the investment opportunities that urbanization presents.
Financing Deep Tech

(World Bank, Washington, DC, 2021-10) Nedayvoda, Anastasia ; Delavelle, Fannie ; So, Hoi Ying ; Graf, Lana ; Taupin, Louise

Deep tech companies - those built on advances in biotechnology, robotics, electronics, artificial intelligence, and other advanced technologies—aim to solve complex social and environmental challenges. Today the majority of deep tech companies are being launched in developed countries, yet the solutions they can provide are applicable globally. Many of these solutions are especially critical to emerging markets, as the intractable challenges of climate, health, and connectivity, among other issues, disproportionately affect these nations. Addressing these challenges is a strategic priority for development finance institutions and governments worldwide, so financing deep tech companies and boosting deep tech ecosystems in order to deliver new solutions globally is a pressing matter. Doing so, however, requires substantial capital and carries a higher degree of risk than ordinary venture investments. This note examines the process of financing a deep tech company, including the benefits and drawbacks of currently available types of financing, and suggests examples of promising but not yet widespread alternatives.
Blended Concessional Finance: The Benefits of Transparency and Access

(International Finance Corporation, Washington, DC, 2021-07) Karlin, Arthur ; Sierra-Escalante, Kruskaia

Blended concessional finance, the combination of commercial finance from the private sector and development finance institutions (DFIs) with concessional finance from public and other sources, is increasingly being used by DFIs to support developmentally important projects where normal DFI or commercial finance is not available because of the high risks involved. This can be especially significant in lower-income and fragile and conflict-affected situations (FCS), where risks are high and innovative and pioneering projects can be critical to economic growth, market creation, and poverty reduction. Blended concessional finance is also being used during the COVID-19 pandemic to help sustain struggling businesses hurt by demand and supply shocks, and to rebuild economies toward green, resilient, and inclusive growth. As blended concessional finance involves the use of concessional public or philanthropic1 funds to enhance the viability of private sector projects, strong processes, particularly in the areas of transparency, access, and governance, are necessary to ensure that these resources are used effectively and without distorting markets.
Enabling A Competitive Mobile Sector in Emerging Markets Through the Development of Tower Companies

(International Finance Corporation, Washington, D.C., 2021-06) Houngbonon, Georges Vivien ; Rossotto, Carlo Maria ; Strusani, Davide

Sharing mobile network infrastructure through specialized companies called towercos is a business model with the potential to accelerate access to quality mobile connectivity for individuals and businesses in emerging markets. A significant number of developing countries have yet to adopt this model, however, and many others continue to struggle with competition issues within their tower markets. This note provides the rationale and policy options for a light regulatory regime that can enable the entry and sustainable development of a dynamic market for towercos in emerging markets. The note also discusses the evolution of the towerco model into small cells and distributed antenna systems, both of which help enable high-speed mobile connectivity technologies like 4G and 5G.
Private Sector Initiatives in Forced Displacement Contexts: Constraints and Opportunities for Market-based Approaches

(International Finance Corporation, Washington, DC, 2021-05) Wang, Weiyi ; Cakmak, Ozan ; Hagemann, Kurt

The number of forcibly displaced persons has been rising in recent years, and many displacements have become protracted. However, public resources available to assist individuals and families have dwindled, exacerbating already strained situations. Amid this backdrop, private sector initiatives have emerged to help create jobs both for displaced people and their host communities. While market-based approaches in refugee contexts are still new, initiatives in several countries have demonstrated the valuable role that private sector firms and investors can play. This note discusses examples of these market-based initiatives, related challenges, and conflict-sensitive approaches for overcoming these challenges. The note also discusses the important role that development agencies can play in de-risking private sector development through market-creating strategies, partnerships, and blended concessional finance.
Blue Natural Capital: Enhancing Business Outcomes and Sustainability of Coastal Tourism Markets

(International Finance Corporation, Washington, DC, 2021-04) White, Elizabeth M. ; Rahill, Bilal

The Coronavirus (COVID-19) pandemic hit the tourism industry particularly hard, affecting livelihoods and exacerbating some pressures on the natural capital resource base. Supporting the tourism sector recovery is an opportunity to build back better, ensuring that business investments lead to a sustainable and resilient shared-growth pathway that is good for tourism and the natural capital on which it depends. Further sustainable management of the Blue economy could more than double its economic contribution to global relationship with economic sectors across coastal landscapes and markets. The experience of the State of Palawan in the Philippines is explored in this note. It serves as a useful model for weighing the opportunities and challenges typical of coastal tourism areas and exploring natural dependencies therein.