The poorest people in developing countries have been hardest hit by the global economic downturn and remain the most vulnerable. Creating opportunity where it is needed most through private sector development is IFC’s mission. In addition to IFC’s investments and advisory services, it transferred US$450 million to IDA during FY09. Taking into account this transfer, IFC reported a net loss of US$151 million. This compares with a net income of US$1.547 billion in FY08. During that year, IFC transferred US$500 million to IDA. IFC’s net income for the fourth quarter of FY09 was US$384 million versus US$271 million for the same period last year.

In a year when private capital flows to emerging markets decreased by almost half, IFC, with its international AAA credit rating, quickly directed resources toward the poorest countries and regions most affected by the current global economic and financial crisis. IFC financing for private sector development totaled US$14.5 billion, including US$4.0 billion mobilized through syndications, structured finance, and crisis-related initiatives. This compares with a record high of US$16.2 billion in FY08. IFC invested in 447 projects during the year, of which half were in IDA countries.

Last year, IFC client companies had outstanding loans of more than US$9 billion to about 8.5 million microfinance borrowers, and over US$90 billion worth of outstanding loans to 1.3 million small and midsize businesses. IFC clients also provided utility services for 200 million people, and phones to 220 million customers. They provided 2.1 million jobs. Our clients also served 5.5 million health patients, and helped educate 1.2 million students. More people in developing countries gained access to critical services like telecommunications, water, electricity and gas distribution. IFC clients purchased about US$47 billion worth of local goods and services, and contributed about US$23 billion to government revenues.

IFC also launched a number of innovative new initiatives to respond to the financial crisis, and leverage significant amounts of public and private funding to meet growing needs for support in developing countries. These included the IFC Capitalization Fund to strengthen systemically important banks, a Global Trade Liquidity Program to help reverse the decline in trade flows, the Infrastructure Crisis Facility to ensure projects critical for development are built, and a Microfinance Enhancement Facility to provide credit to microenterprises. IFC also expanded advisory services aimed at helping clients manage risks and address nonperforming loans.

Demand for IFC investments and advisory services remains strong, as developing countries continue to suffer from the global economic downturn. It will likely remain strong as the financial crisis eases, given the critical role private sector in developing countries can play in promoting recovery.