Report Series: EMCompass Notes
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.
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Publication
Blended Concessional Finance: The Benefits of Transparency and Access
(International Finance Corporation, Washington, DC, 2021-07)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. -
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How Technology Creates Markets: Trends and Examples for Private Investors in Emerging Markets
(International Finance Corporation, Washington, DC, 2018-04-01)Technological progress is often associated with the creation of novel and useful products through innovation and ingenuity. Yet in several emerging markets, including low-income economies, it is often more common to adopt, adapt, and scale technologies created elsewhere.By doing so, private enterprises in these countries could use technology to create markets and expand their product and service offerings to unserved and underserved residents, a process that produces new customers, buyers, sellers, and employees. This transforms the pursuit of profits into a driver of economic growth, as well as higher productivity and living standards, and gives technology a central role in emerging market development. -
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How to Scale Solar Power Generation in Emerging Markets
(International Finance Corporation, Washington, DC, 2016-09)Solar power is an increasingly affordable, quick-to-build solution for countries in need of additional electricity generation. Yet many emerging markets face challenges to developing photovoltaic projects, as small project sizes and lengthy negotiations increase costs and timelines. Scaling Solar, launched by the World Bank Group in 2015, addresses these issues by providing an easy-to-follow process to plan, procure, and launch grid-connected solar projects using private sector financing within two years of engagement. It offers governments the tools to quickly increase energy generation at stable low tariffs and allows developers to bid on well-structured, standardized projects through a competitive, transparent process that reduces risk and costs, making new markets easier to navigate. -
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Case Study - Bayport Financial Services: How Can Businesses Tap Local Capital Markets to Expand?
(International Finance Corporation, Washington, DC, 2016-04)Bond markets, though still underdeveloped in Africa, are beginning to emerge as a realistic financing option for private companies looking to invest or expand their operations on the continent. Multilateral development banks can play a critical role in that process by issuing bonds in local currencies and providing risk guarantees and anchor investments to companies looking to issue their own bonds. -
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Blockchain Governance and Regulation as an Enabler for Market Creation in Emerging Markets
(International Finance Corporation, Washington, DC, 2018-09)Developing a proper governance and regulatory framework for blockchain-based applications will be essential to providing market participants the stability they need to fully engage with the technology and allowing innovation to flourish. Given the global, multi-sectoral reach of blockchain, regulators, and industry will have to work in a collaborative manner to ensure they can both experiment and learn, and so shape the future of the technology in a way that benefits all parties and society as a whole. -
Publication
How to Stimulate Innovation by Africa’s Private Sector
(International Finance Corporation, Washington, DC, 2016-09)Governments in advanced economies have historically helped spur commercial innovation, particularly as a result of spillovers from defense related research and development. In many emerging markets, however, government lacks the resources or capabilities to do so. In Africa, as in other emerging markets, this has created an opening for private firms to drive innovation. By applying advances in technologies, businesses are enhancing productivity and growth across the continent. -
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Global Productivity Slowdown and the Role of Technology Adoption in Emerging Markets
(International Finance Corporation, Washington, DC, 2016-05)The global productivity slowdown is affecting mature as well as emerging economies and this pattern has been particularly prominent over the past five years. Productivity levels in mature economies are almost five times higher than those of emerging countries, providing ample catch-up opportunities for emerging markets in their efforts to generate growth and eradicate poverty. This article highlights the forces of new technologies and business models as key drivers for emerging and mature economies’ productivity and hence future growth patterns. However, emerging markets have to find a way to make good use of available productivity-enhancing technologies and business models that meet their economies’ needs and capabilities. -
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Innovative Insurance to Manage Climate Risks
(International Finance Corporation, Washington, DC, 2016-09)Severe storms, record heat waves, intense droughts, and floods—the impact of climate change rises every year and economic and financial losses rise with it. Insurance plays a major role in helping businesses in advanced economies mitigate the consequences of the changing climate and prepare for policy changes ahead. But insurance in emerging markets isn’t yet able to make the same contribution, despite the fact that natural disasters disproportionally affect people and firms in these countries. Recently, however, a number of new business and donor initiatives have begun to create innovative approaches to using insurance to address climate change. -
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How Emerging Market Leaders Can Spur Technological Gains
(International Finance Corporation, Washington, DC, 2016-09)New technologies help firms in emerging markets make significant gains. But these firms often face barriers to successfully incorporating new technologies into their businesses. Emerging-market leaders, however, can take steps to help firms overcome these barriers, including strengthening regulatory frameworks, improving education, fostering trade, and increasing access to finance. -
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How Fintech is Reaching the Poor in Africa and Asia: A Start-Up Perspective
(International Finance Corporation, Washington, DC, 2017-03)This note explores the way traditional banks and financial technology companies, or Fintech’s, interact in Africa and Asia, and their ability to offer innovative digital financial services that grant unbanked individuals access to financial transactions. The Fintech sector is experiencing explosive growth in both continents, but while Asian banks have managed to efficiently integrate with Fintech solutions, African banks have been slower to adapt to this change. Still, the outlook for mobile banking remains positive, and its prevalence will boost the financial industry in both regions.