IFC set to focus on short-term lending

IFC, World Bank’s investment arm, is poised to get involved in propping the private sector and should banks need to conduct a capital increase, it could enter their shareholding structure or increase its existing stakes, with the arm likely to become a co-shareholder even in a temporarily troubled lending institution, maintains the head of IFC mission in Romania, Ana-Maria Mihaescu. “(…) We have over 400m dollars of exposure to the Romanian banking sector, accounting for 67% in IFC’s portfolio of Romania. Amid the crisis, this share could rise in certain periods. Our research makes us feel comfortable with banks’ portfolio quality,” states Mihaescu in an interview with ZF. In the current stage of the international crisis, Mihaescu does not believe the banking system has been significantly hurt, but warns outlooks are uncertain. Due to the international crisis, IFC will not grant long-term loans for about a year, but focus on short-term facilities and on entering the shareholder structure of some companies or banks or on increasing existing stakes. Mihaescu says that for crisis costs to be minimised, efforts to respond to market demands with short-term products are important. Thus, she believes trade finance products and longer-term products, such as minority stakes, will be the most sought after.