COVID-19 responses – support to existing clients

In the context of the COVID-19 crisis in 2020, SIFEM provided liquidity to local financial intermediaries for the purpose of strengthening financial intermediation and maintaining financing options for local companies. In addition to a SIFEM contribution of EUR 8 million (USD 9.4 million) to a new dedicated COVID-19 financing initiative through the existing European Financing Partners (EFP) scheme, SIFEM also supported two of its existing clients. Financing was extended to the Indian Fund Manager Global Catalyst Partners (Lok Capital), which aims to support India’s underprivileged and underserved populations via investments in small and medium-sized enterprises (SMEs) focused on financial inclusion. SIFEM also provided financing to the Cambodia-Laos-Myanmar Development Fund II (CLMDF), which is a regional private equity fund managed by Emerging Markets Investments and focused on investing in small and medium enterprises (SMEs) located in Cambodia, Laos and Myanmar.

In the face of the unprecedented COVID-19 crisis, Development Finance Institutions (DFIs) such as SIFEM have a crucial role to play. They form an effective front line in the struggle to preserve businesses in developing countries and are the institutions best suited to help the private sector in these markets. At a time when capital flows into developing countries have ground to a halt, DFIs have a unique opportunity to act in a counter-cyclical fashion and by leading other investors back into emerging markets in the medium term.