DEFINITIONS AND NOTES

  • IFC's Global Financial Markets categorized its clients' sub-borrowers according to the following:
    • Micro enterprise: if loan is smaller than $ 10,000 at origination;
    • Small enterprise: if loan is smaller than $ 100,000 at origination;
    • Medium enterprise: if loan is smaller than $ 1 Million at origination ($2 Million for more advanced countries).
  • The commited portfolio in MSME FIs does not include commitments for commercial banking trade finance and collective investment methods.
  • Nonperforming Loan (NPL) is a loan which is 90 or more days past due.

ESTIMATION METHODOLOGY

Introduction

Lack of access to financial services is a key barrier to the growth for micro, small, medium enterprises (MSMEs).IFC is working to develop solutions to close the MSME financing gap in collaboration with financial institutions (FIs) around the world. By partnering with many types of financial intermediaries, including microfinance institutions (MFIs), commercial banks, leasing companies, and private equity funds, IFC reaches many more small and medium enterprises (SMEs) than it could directly.

Purpose of the Reach Data

IFC supports firms that make a wide range of contributions in developing countries. In turn, these firms affect various stakeholders, including customers, employees and their families, local communities, suppliers and other business partners, as well as national and local governments. Reach Data is a tool of measuring the FI clients' development and therefore assessing the development results that IFC achieves through its private investments and advisory services in financial sector.

Classification of Clients and Loans

IFC Investment and Advisory clients are classified as “Micro”, “Small” and “Medium,” according to the following criteria. If the project with the client is specifically focused on developing the client’s MSME business, it may be categorized based on the loan size category:

  • “Micro” -- most loans will be <$10,000;
  • “Small” -- most loans will be <$100,000 or
  • “Medium” --most loans will be <$1 million or <$2 million in advanced countries.* *advanced countries include: Argentina, Brazil, Chile, China, Columbia, Czech Republic, Hungary, India, Korea, Mexico, Morocco, Peru, Poland, Russia, Slovenia, Slovakia, South Africa, Thailand, Tunisia, Turkey.

Content of the Reach Data

The following indicators are collected through the Reach Data survey:

  • Number and volume of outstanding loans of client FIs
  • Number and volume of disbursed loans over the year
  • Number and volume of non-performing loans
  • Employment information of client FIs (total number of employees, number of women employees)
  • Number of branches
  • Number and volume of deposits

For all forms of IFC financing of banks and non-bank financial institutions (equity, quasi-equity, general purpose credit lines etc.) as well as advisory services (Microfinance, SME Banking, Sustainable Energy Finance, Agrifinance, Housing Finance, Risk Management, etc.), the total portfolio of that institution is taken into consideration to arrive at the classification.

Source of Reach Data

Data is obtained directly from the clients by requesting to fill out the standardized template on an annual basis.

Timeline

By collecting Reach Data on an annual basis IFC has an opportunity to track its impact on the market through analysis of trends and development of its clients across different regions. 2014 is IFC’s 10th year of Reach Data collection.