At the heart of IFC’s approach to blended finance are efforts to create and help sustain private markets with strong development impact. This note explores the role of blended finance in creating markets and looks at lessons from three blended finance projects and structures—and how each contributed to the creation of markets that are scalable, sustainable, and resilient. The projects illustrate the value of using blended finance to kick-start markets and to push to achieve long-term financing on commercial terms. They also carry important lessons for using and scaling up blended finance in the future.

This note also discusses how IFC is tackling financial market restrictions for SMEs. IFC with support from the United Kingdom has signed a risk-sharing agreement with the European Investment Bank and Ecobank, a pan-African commercial and investment banking group. This has helped to fill the gap in financing for the enterprises operating in fragile and conflict-affected states in West and Central Africa.