TELLING OUR STORY Private Sector DEVELOPMENT BSousinesslutions , Women and DeJvobselopment

2013 Vol. 7 / Issue 1 TELLING OUR STORY

2013 Vol. 7 / Issue 1

Investment Infrastructure Access to Skills Supply and Working Climate Finance Distribution Conditions Chains Introduction IFC's Role

Jobs are central to the global development women—less than 50 percent of whom are agenda. This has been clear to me since I currently active participants in the labor force. Building Prosperity, Ending Poverty Jobs joined IFC in October 2012. In fiscal 2012 we invested more than $20 billion, It was especially apparent at that month's including funds mobilized from other investors, Message from the Micro, small, and medium enterprises are the main source of employment in developing countries. International Monetary Fund–World Bank and provided advisory services worth nearly Especially for them, we focus on removing the key obstacles to growth: Executive Vice President Group Annual Meetings in Tokyo, which $200 million. To maximize our impact, we are now Investment Climate, Infrastructure, Access to Finance and Skills. and CEO highlighted the fragility of the global undertaking large-scale initiatives to understand the We also help by strengthening Supply and Distribution Chains and Working Conditions. economy and the need for job creation. many intricacies of job creation in emerging This theme continued at the G-20 Finance markets, using what we learn to inform our work. Ministers and Central Bank Governors We are increasingly looking beyond direct job Supporting creation of 1 million Focusing on agribusiness, Sharing the lessons meeting that I attended in Mexico City in creation, examining the many indirect employment Global jobs over the next six years SERBIA the key industry in a BANGLADESH of investment climate November 2012. effects of our work with firms of all sizes. through the Global SME Finance country with 20 percent reforms that have Facility (pp. 22-23) unemployment (pp. 38-39) created 326,000 As the member of the World Bank Group The 23 million micro, small, and medium jobs in local Special focused on the private sector, IFC must do all enterprises that our client financial institutions Economic Zones— it can in this critical area. Working closely supported in 2011, for example, provided at least two-thirds of them for women (pp. 12-13) with our World Bank colleagues, clients, and 100 million jobs. Our infrastructure clients have other partners, we must bring solutions. about 330,000 workers on their own payrolls, but Small steps are not sufficient. We must the improvements in power, water, telecommunica- support large-scale, transformational change. tions, and transport they bring help many other The World Bank’s new World firms grow as well. And many of the industries Development Report 2013–Jobs is a valuable we support—agribusiness, mining, manufac- Targeting youth PHILIPPINES unemployment by analytical tool in this regard. Published on turing, and others—have large multiplier effects, increasing training the eve of our Tokyo annual meetings, it with our clients often creating 10 or more indirect and placement refocused attention on job creation. It raised jobs for every direct job they provide. Peru TUNISIA opportunities in one of the world’s awareness of key actions that can be taken Much more work lies ahead. We will largest industries— throughout the developing world, where tackle it with full force, committed not Bringing 400,000 Helping job-creating tourism (pp. 30-31) more than 150 million are unemployed and just to supporting our clients, but helping more women into a entrepreneurs find much- local cosmetics firm’s needed risk capital via KENYA many more are underemployed, trapped in policymakers gain new practical insights sales force across Latin the World Bank Group’s low-wage, low-productivity employment on ways to help the private sector increase America (pp. 44-45) larger Arab Spring initiative (pp. 20-21) with little hope of improvement. job creation in developing countries. Financing the pan-African Good jobs, with sound working growth of a local steel processor that has created conditions, benefits, and opportunities for 4,200 direct—and 24,000 advancement, provide a clear path out of indirect—jobs (pp. 42-43) poverty. The need is especially acute among youth, who have disproportionately high Jin-Yong Cai rates of joblessness in many countries, and Executive Vice President and CEO COVER Construction of the IFC-financed Altea cement plant in Albania, creating jobs in one of the poorest parts of Europe (see pages 50-51).

2 3 Introduction

Job Creation: Removing the Obstacles SUPPLY AND Working Clearing the Way to Large-Scale Change INVESTMENT CLIMATE INFRASTRUCTURE ACCESS TO FINANCE Skills DISTRIBUTION CHAINS Conditions Barriers Creating jobs is one of the • Skills that equip workers, to Job private sector’s jobs. especially young people, to Problem Problem Problem Problem Problem Problem Creation find the employment they IFC works with governments need and give entrepreneurs and businesses to help make new ways to build their it happen. We identify the businesses biggest obstacles that stand in the way to employment • supply and distribution Excessive Power outages, Banks won’t JOB APPLICANTS Small markets Weak operating growth, then help remove them. chains that connect smaller firms to larger ones, Clear away those obstacles, especially in manufacturing, red tape bad roads, lend, investors LACK RELEVANT Reduce demand environments and job creation follows. It is extractive industries, and Even for Weak operating far from easy, but it works. agribusiness and taxes clogged ports won’t invest SKILLS high-potential environments at home It has been seen time and again, in country after country. • Working conditions for Keep firms in the Bad for business, Thinking small Managers also products drive business away improving environmental and informal sector— driving up production businesses are lack know-how To break down the barriers social performance, including to job creation, IFC provides and from growing and delivery costs high-risk good working conditions investment, advisory ser- once they leave it vices, and asset management, This is the package we offer. It is complementing the World based on what the governments Bank's policy support, loans, and private enterprises tell us and grants to governments. would do the most to encourage How IFC job creation, benefiting firms of We help the private sector Helps all sizes but especially the key achieve significant increases Solution Solution Solution Solution Solution Solution job creators: micro, small, and in employment by focusing on: medium enterprises. • Investment climate reforms that help entrepreneurs start and grow their businesses • Infrastructure improvements Simplifying Attracting MICRO/SME Building Linking small Raising that help businesses access markets and become globally the Rules Private Investment FINANCE skills local firms THE BAR competitive Bringing win-win Improving access Proven, Through affordable, To large, globally Helping our clients, • access to finance that solutions for all and quality of services, profitable private-sector competitive ones others create the companies need for often through public/private models based programs right conditions investment and growth partnerships

4 5 Introduction See videos on many of these stories in the online version of Telling Our CONTENTS Story—available at ifc.org. Telling Our Story–Jobs January 2013

Investment Climate Lebanon India 24 financing Women 40 Orissa Cement 8 Introduction It's Smart Business High Impact in a Low-Income State Myanmar India Assessing Private Sector IFC tracks jobs created by its clients • How do these different activities affect 10 supporting Reform 26 the Rural Economy Africa Attracting Investment, through its Development Outcome different societal groups, including Ripe for Investment 42 SAFAL Contributions to Sharing Prosperity Tracking System (DOTS) and through women, young people, and the poor? A Steel Roofing Leader in 11 African Countries evaluations conducted by ourselves and Global others. This results-measurement system The study methodology included an s kills Job Creation 12 Special Economic Zones Latin America enables us to estimate how many jobs are extensive review of existing literature Women’s Employment, 28 Introduction and the Caribbean created by clients. However, there is and evaluations; analysis of World Bank Women’s Empowerment 44 Belcorp limited knowledge about which initiatives Group Enterprise Surveys from more Global Cultivating New Women in which country, under which conditions, than 100 countries; analysis of IFC’s own 30 building Skills Entrepreneurs are most likely to catalyze job creation or data and lessons of experience; focused Infrastructure A Key to Increased Incomes benefit the poor. project and country-level evaluations; Papua New Guinea To start to answer these questions, inputs from others through a dedicated 14 Introduction Middle East/North Africa 46 Airtime Sales Agents IFC has been conducting a study to assess website and blog; and an essay 32 youth Unemployment Targeting the Grassroots Market how the private sector creates jobs. competition cosponsored with the World Global Private Sector Solutions 16 Ports Complementing the World Bank’s Economic Forum on solutions to youth World Gateways to Progress Development Report (WDR) 2013–Jobs. unemployment. Vietnam Working Conditions 34 bank Training Our IFC Jobs Study: Assessing Private IFC will use the findings of its Opening Up Access to Finance 48 Introduction Sector Contributions to Job Creation and study and the WDR, to adapt its aCCEss to Finance Poverty Reduction was published in strategy and future operations for Albania January 2013 with support from the increased contributions to job creation 18 Introduction 50 Good Working Conditions s upply and Netherlands, Switzerland, and the UK. and poverty reduction. Bringing Bottom-Line Benefits Distribution Chains It focuses on practical lessons, and aims Tunisia Photo As population grows and more young to find answers to key questions such as: 20 smEs 36 Introduction people join the work force, 600 million additional Studies cited in Anchors of Employment jobs must be created in the coming years. • What types of activities—direct Telling Our Story–Jobs Serbia Conclusion are available at: Global 38 Agribusiness investments, efforts to strengthen 52 Jobs ifc.org/jobcreation 22 the SME Market A Critical Sector supply and distribution chains, A High-Potential Business for Banks Central to the Global Agenda improving infrastructure, the investment climate, or others— are most likely to have the greatest effects on job creation?

6 7 Obstacles to Job Creation Overall Obstacles Removing the Inadequately When we asked 46,000 firms in more EDUCATED than 100 countries to name the key WORKFORCE POLITICAL factors holding back their growth, 8% INSTABILITY Obstacles: 8% problems in the local investment climate was the number one response, followed by infrastructure and access to finance. SECURITY Nine main problems were listed in Investment 5% the investment climate, starting with informality and tax rates. ACCESS TO FINANCE Source: World Bank Group Enterprise Surveys Climate 16%

ne of the best ways governments and their international partners can spark wide- O spread job creation is to reform the laws INFRASTRUCTURE 17% and regulations affecting private enterprises— INVESTMENT CLIMATE in other words, the investment climate. Reforms that simplify business registration, taxation, and other areas can bring significant 46% employment effects. They can especially FRAMEWORK AND Investment Climate Obstacles ENFORCEMENT-RELATED benefit small firms, which our surveys show Photo Georgian entrepreneur Nana Kurashvili and have the highest growth rates throughout the students at her kindergarten in Tbilisi—made possible by tax reform. developing world—especially in the poorest countries—but often have little voice in policy Prior to the changes there was no debates. And they can support the emergence differentiation between small, medium, of more large firms, which become more and large businesses. All of them were prevalent as countries grow into the middle- taxed by the common system, which was TAX RATES INFORMALITY income and higher-income brackets, and burdensome for small businesses. 11% 12% typically provide higher wages, higher training “The new taxation system is comfortable and better working conditions. for small businesses like mine,” says Nana. A study in Mexico estimated that the The Georgia Revenue Service granted her COURTS creation of one-stop shops to facilitate company the status of small business, which 1% business entry increased employment in enables her to pay a 5 percent turnover tax CORRUPTION affected business by 2.8 percent. instead of the previous 20 percent income tax. 7% LABOR REGULATION Changing the tax regime in ways that benefit The new taxpayer status also enabled her to 3% smaller firms is also helpful. Recent reforms in significantly simplify accounting procedures. Georgia’s tax system motivated Nana Generally entrepreneurs can also qualify for a ACCESS Kurashvili's family to start its own business. 3 percent turnover tax rate, depending on doc- TO LAND BUSINESS 3% LICENSING Once unemployed, she has now opened a umentation of costs incurred by the company. AND PERMITS kindergarten in Tbilisi, finding it easy to do Brought together in a full package, 3% TAX business as a result of joint efforts from IFC investment climate reforms can open new ADMINISTRATION and the Georgian government that streamlined doors to private sector growth… CUSTOMS 3% AND TRADE the system in early 2011. REGULATION 3% 8 Investment Climate Myanmar Right Myanmar’s Aung San Suu Kyi meets IFC’s Vice President for Asia-Pacific, Karin Finkleston, August 2012

Despite being rich in natural and human would enable greater and more open resources, Myanmar is one of the poorest discussion on legal and regulatory issues. Supporting countries in Southeast Asia. But after a At the same time, IFC is conducting long absence, the World Bank Group has assessments that will form the basis of begun re-engaging with the country, future investment and advisory programs Reform supporting reforms that will benefit all its in Myanmar. A financial sector mapping Attracting Investment, people, including the poor and vulnerable. exercise is underway to study ways to Until now, difficulty in accessing finance, improve access to finance. We are also Sharing Prosperity underdeveloped infrastructure— working with the Bank to assess the particularly telecommunications and country’s investment climate and power—and the lack of a business infrastructure needs, with an initial focus environment conducive to private on telecommunications and power. The World Bank Group investment have all held back the potential Investment will follow. The first that IFC returns to Myanmar of this country of 62 million people, more has planned is a $2 million convertible loan than two-thirds of them living in rural areas. that will help our Cambodian microfinance Recently, however, the government client ACLEDA Bank open operations in began a far-reaching program to Myanmar in 2013. Launched in 1993 as strengthen the role of the private sector in an NGO, ACLEDA has received repeated the economy. Working alongside the World IFC support and now stands as Bank, IFC is supporting this effort with Cambodia’s largest bank by assets. Its diagnostics and advisory services to help targeted lending to small-scale improve the regulatory framework and the entrepreneurs in Myanmar is expected to broader investment climate. have a similar impact, creating jobs and Ongoing consultation between the raising incomes at the base of the pyramid. government and the private sector on the After having approved no new lending reform program will be necessary. Bringing to Myanmar since 1987, the World Bank is

significant regional and global experience also stepping up its financing, beginning ABOVE An improving investment climate creates opportunity in Myanmar, in developing public-private dialogues, with an initial $80 million in grants to one of the poorest countries in Southeast Asia. IFC is now active in the we plan to work with the government and benefit Myanmar’s local communities. country for the first time. Chamber of Commerce to support the establishment of a business forum. This

10 Investment Climate 11 Global

The numbers speak for themselves. the government and the private sector since Special Economic Zones (SEZs)— 2007 to strengthen the SEZs. The lessons of Special designated areas with especially good this work are clear: improving women’s working infrastructure and IT connections, conditions reduces absenteeism and turnover, overseen by a comprehensive legal and which increases firms’ productivity, making Economic regulatory framework compatible with them more competitive. WTO and other standards—are not just But more must still be done. Today we are export engines.They can also drive women’s helping all sides see the strong business case for: Zones empowerment. In Bangladesh they employ Women's Employment, roughly 326,000 workers, almost two-thirds • Enhancing Women’s Voice: raising awareness of them women. Worldwide, 60 to 70 of their rights and increasing their participation in Women's Empowerment percent of SEZ employees are women. local workers’ associations, helping them address SEZs often provide a woman's first chance issues before they become grievances. to earn a living outside the informal sector. Primarily housing garment factories • Upgrading Skills: enabling more women The lessons of 326,000 jobs serving Levi Strauss, H&M, and other top to rise into supervisory positions, where they in Bangladesh global brands, SEZs are a key economic are currently severely under-represented. force in Bangladesh, generating roughly half of all export earnings. Women typically • Building Financial Inclusion: invest their earnings from these generally highlighting the business opportunities in safe, fair-paying jobs to improve housing, today’s situation, where 85 percent of SEZ health care, and education for their families, workers lack bank accounts, and supporting often sending whatever is left over to poorer the introduction of debit cards and other relatives back in their home villages. helpful new products for workers. Building out this model even further would be good for everyone—improving The experience from Bangladesh’s SEZs

empowerment and increasing profits. anchors Fostering Women’s Economic Empower- Above A new IFC/World Bank study shares the lessons of Bangladesh’s The Bangladesh Investment Climate ment through Special Economic Zones, a new Special Economic Zones that have created roughly 326,000 jobs—most of them for women. In areas where women found work in garment Facility that IFC manages in partnership eight-country IFC/World Bank study that helps factories, young girls were also more likely to attend school, the World with the U.K. Department for International governments, zones, and firms promote the role Bank's World Development Report 2013–Jobs shows. Development and the EU has worked with of women more effectively in the future.

12 Investment Climate 13 Removing the Obstacles: Infrastructure

uly 2012: India is crippled by the world’s opening the way to new markets that create largest blackout, affecting more than 600 new jobs. Improved telecom and IT million people. Its large, well-financed connections may be even more IFC Executive Vice President and CEO Jin-Yong Cai J visits the E-Power plant in Haiti, November 2012. firms could quickly switch to their expensive transformational. Increasing urbanization diesel generators, but the innumerable smaller also results in huge infrastructure needs, ones that employ most of the workforce could and research shows that jobs in cities can not, once again feeling the impact of be much more productive—but only with inadequate power supply—something that functioning infrastructure, the World Bank's even before the two-day blackout was World Development Report 2013–Jobs shows. Infrastructure estimated to keep sales 11 percent below their This is why IFC makes infrastructure one potential throughout South Asia. of its highest priorities, with a special focus January 2011: One year after Haiti’s on Africa. We do so with a commitment to • 26% of firms in low-income devastating earthquake that claimed more public-private partnerships, working closely countries say lack of reliable than 200,000 lives, the privately sponsored with the World Bank, other international access to power is their biggest E-Power plant opened, expanding electricity finance institutions, and a broad range of constraint to growth generation in capital city Port-au-Prince by donors, partners, and clients. Source: World Bank Group Enterprise Surveys 35 percent. Local businesses and service The private sector brings an providers were quick to report the impact entrepreneurial, results-driven approach • 4% to 5% increase in of the $56.7 million, IFC-financed project: to infrastructure. It can make a major employment results from use of “It’s much better now, because we have difference—improving job creation and generators in low- and lower- electricity day and night,” said health clinic other aspects of quality of life in local middle-income countries manager Janvier Smith. communities in immeasurable ways… Source: IFC Job Study note, using World Bank Access to infrastructure—especially Group Enterprise Surveys data power—is a key constraint to private sector growth, especially in low-income countries. • 2% to 4% of GDP of some The companies we survey tell us that African countries is devoted to frequent power outages undermine their the costs of using generators output and job creation. But roads, ports, Source: Africa's Infrastructure: A Time airports, and railroads are also critical. Solar-powered cell phone tower for Transformation. Agence Française de Improving them reduces transport costs, built with IFC financing, India Développement and The World Bank, 2010 Global PHOTOS Long trailing behind the rest of the country, Pernambuco is now one of Brazil's fastest-growing states. "Revival began with a new port at Suape, south of Recife," wrote The Economist in October 2012. A privately managed terminal at Suape has made shipping more efficient, sparking creation of 6,200 new jobs at local firms using it to import and export their goods.

In today’s highly globalized economy, As part of a major port sector reform efficient shipping is critical for program, in 1999 the state government Ports development. there named IFC its principal advisor in Gateways to Progress The industry carries 90 percent of introducing a public-private partnership world trade, and depends on ports. (PPP) for terminal development and Upgrading their physical infrastructure operation, resulting in TECON, the first brings benefits not just to the private dedicated container terminal at Suape. sector, but to local communities as International Container Terminal Services More impact than well—removing import/export delays and (ICTSI) of the Philippines won a public meets the eye other inefficiencies that often hold back bidding to build and operate the facility job creation and economic growth. via a PPP for 30 years. The agreement was This is why IFC takes on projects like signed on March 2001, with the operator the upcoming financing of a private taking over three months later. company’s expansion of a container The transaction set a new record in terminal in Togo’s capital of Lomé, one of Brazilian port privatizations, with ICTSI West Africa’s best natural deep-sea ports. offering three times the concession fee we Togo has put infrastructure front and had estimated. Since then, its new TECON center in its development agenda, with the Suape entity has invested more than terminal expected to be the biggest $98 million in infrastructure improvements foreign investment project to date at €350 that have increased container movement million ($425 million). The upgrade will dramatically—from moving less than improve the flow of goods not just there, 28,000 containers in 2001 to more than but also in poorer landlocked countries to 243,000 today. the north such as Mali and Burkina Faso. To handle this new flow of goods, the In pursuing this and other similar privately run terminal now employs roughly investments, IFC draws on the lessons of 400 full-time, highly trained staff—up from our previous work. Many are contained in just 172 in 2001. But the bigger impact is in reduction in transport times and costs These empirical findings create a new a recent evaluation of our role mobilizing the indirect jobs the port upgrade has was golden for nearby firms relying on challenge: helping other frontier market private investment in the Suape port in generated. By 2005, IFC’s evaluation TECON Suape, many of which have ports experience the positive impacts one of Brazil’s less-developed Northeast indicates, the container terminal had created increased their workforces by 35 percent seen at Suape. states, Pernambuco. another 6,200 jobs outside the port. The or more.

16 Infrastructure 17 Removing the Obstacles: access to finance

azel Al Adeeb never wanted to earn his clients—up from about 3,300 when we

Bazel Al Adeeb, Yemen living on the streets, selling handfuls began assisting it three years ago. LOMC has B of nuts to anyone he could find. reached 100,000 small Sri Lankan entrepre- A good job with a big company would neurs since we helped create it in 2008. have been better. But there weren’t any. Research shows microenterprises and Not for youth in Yemen—the poorest SMEs are the key sources of job creation. country in the region with the world’s As one of the world’s largest investors in Access to Finance highest youth unemployment. microfinance, IFC reaches 17 million people He worked hard, built a client base, like Bazel and Rasan, helping them open • 60% of developing world’s jobs and dreamed of opening his own business. businesses, increase incomes, and create jobs. are in informal sector micro, small, But finding financing was impossible— But it is not just low-income entrepre- and medium enterprises (MSMEs) just as it was for Rasan Puwaneswary. neurs who need help finding financing. Like so many others in northern Sri Lanka, Throughout the developing world, formal • 66% of the remaining jobs are she lost everything in a war that claimed sector SMEs are critical as well. in formal sector small and medium more than 80,000 lives. Since 2003 IFC has provided Sri Lanka’s enterprises (SMEs)* When peace returned in 2009, she and largest private bank, the Commercial Bank * 250 employees or less her four children had no home, no way to of Ceylon (CBC) with investment, advisory open even a small farm. “No one would services, and support for loans to SMEs. • 70% of MSMEs receive give me a loan since I had nothing they Recent research shows that the no financing from financial could hold as security,” she says. “It was microenterprises and SMEs that obtained institutions, even though they need difficult to live day-to-day.” loans from CBC in 2009 had created it to grow and create jobs Then Rasan heard of Lanka Orix Leasing 2,650 new permanent jobs by 2012. Source: Two Trillion and Counting: Assessing Company Micro Credit Ltd. (LOMC), They reported annual job growth of the Credit Gap for Micro, Small, and Medium- which we had just helped enter her area. With about 12 percent, or roughly twice the size Enterprises in the Developing World. IFC and its $250 loan she began growing onions, national average in Sri Lanka. McKinsey & Company, 2010 carrots, and beets. It was a start. Today she CBC’s microenterprise and SME loan has a stable life and, like Bazel, has begun portfolio is now a solid business, more • 100 million jobs provided hiring others. Now 27, he owns a successful than tripling since 2009. This shows that by MSMEs RECEIVING LOANS FROM IFC- small shop financed with $2,500 in loans increasing access to finance for small and Rasan Puwaneswary, Sri Lanka SUPPORTED FINANCIAL INSTITUTIONS from our client Al Amal Microfinance Bank, mid-size firms can be good for business, Yemen’s largest with roughly 25,000 and a key force in job creation…

18 Access To Finance Tunisia PHOTO Supported by an IFC-backed venture capital fund, Tunisia's Cogitel makes packaging material for Dannon yogurt and other leading consumer brands.

Tunisia is where the Arab Spring began. downturn. This is not counting the important A frustrated fruit-seller’s self-immolation positive impact this industry is bringing to the SMEs there in December 2010 sparked a wave of agribusiness sector in the North African region in Anchors of Employment regional outrage, driven in large part by terms of added value packaging, allowing those widespread joblessness. At the core sat a companies to meet international packaging paradox: the Middle East and North Africa standards and to boost export. Risk capital and (MENA) labor force is one of the fastest- hands-on advice from our local partner TunInvest growing in the world, needing to create up to have been one of the keys to its success. Filling the financing gap, 75 million new jobs in the next decade just to The region’s private equity pioneer, TunInvest amid the Arab Spring keep up with population growth and bring has been investing profitably in SMEs since 1994. down unemployment. Yet its key sources of With our support, in 1998 it put $1.9 million into a jobs—micro, small, and medium small, loss-making Tunisian manufacturer called enterprises—are capital-starved. They show Cogitel, then put it on a path to renewed profitability. the world’s lowest access to finance, their Seeing an even brighter future ahead, this insightful most important driver of growth. Tunisian investment group then helped Cogitel It is a fundamental issue that must be grow further through acquisitions and new ventures, addressed. IFC is doing so as part of the ultimately folding it into a new holding company larger World Bank Group’s response to the called Altea Packaging that received a fresh $19.5 Arab Spring. At the May 2011 G-8 summit million in 2006. Today Altea employs 680 workers in France, we joined other international at subsidiaries in Tunisia, Algeria, and Egypt. It is finance institutions in launching the MENA’s flexible packaging leader, outselling its Deauville Partnership, a far-reaching closest competitor each year by a factor of five. initiative committed to increasing support for But MENA has 1.1 million SMEs. It needs private sector–led economic growth. many more success stories like this one. As part In large part, this means helping the of the Deauville Partnership, IFC is thus region’s promising smaller companies reach investing up to $18.5 million in TunInvest’s

their full potential. Tunisia’s Altea Packaging, newest private equity fund, its largest ever in the Above Cogitel is thriving despite the challenging economic conditions for example, now has 680 direct employees, MENA region. This is part of the $2.6 billion in Tunisia, providing steady jobs for local workers. more than seven times as many as it did the we invested in MENA in fiscal 2012— day we first met it. And it is preserving those our countercyclical vote of confidence in the jobs today, despite its region’s economic region and its many job-creating entrepreneurs.

20 Access To Finance 21 Global

When Ofelia Mandlate joined our client Katundu, the bank’s head of retail and SME BancABC Mozambique as a relationship banking. “We joined it to gain international The SME officer, she expected to seek out new expertise on how to provide SME solutions. clients for its upcoming SME finance Our vision is to be the fastest SME bank in business. In the past few months she has Mozambique. To do this, we are going in with Market done that, and much more. a big heart and with the right partner.” A High-Potential Today she manages the whole credit Our partnership with BancABC began in process, from client meetings, to analysis, early 2012 with a $13.5 million investment Business for Banks approval, and disbursement. Making her in BancABC units in Mozambique, Zambia, responsible for all stages speeds up the and Botswana. Joining our AMSME program loan process, with client files no longer then gave it access to IFC advisory services passing around various departments. in tailoring new financial products to local Investment, advice, BancABC’s goal is to disburse within market conditions. Program costs are shared partnership 10 days, a breakthrough in a country by IFC and BancABC, with IFC providing a whose banks usually take up to three full-time resident advisor in all three countries. months to process SME loans, if they The program has helped 21 African banks provide them at all. It learned of the provide $1 billion in SME loans since its relationship officer model through IFC’s launch in 2006. Africa Micro, Small, and Medium Taking this proven model deeper into Enterprise (AMSME) Program, which Africa, South Asia, and other regions, we now helps banks in 16 African countries also oversee a larger Global SME Finance increase profits through new business Facility. Launched in March 2012 in response with SME clients. Often, as with to the G20’s call for greater financial inclusion BancABC, this means introducing new in developing countries, its first donor partner ways to tap a deep, high-potential market is DFID of the U.K., which contributed that others avoid due to risk perceptions. approximately $64 million for blended finance

The partnership is a win-win for all: investments and $51 million for advisory Above By helping Mozambique’s BancABC lend to local helping banks gain new business, thus services. IFC is providing $200 million to small and mid-size businesses, IFC opens the way for helping entrepreneurs create jobs. leverage DFID’s investment portion. job creation in one of Africa’s poorest countries. “For us, IFC’s program brought in a The goal: supporting creation of 1 million change discussion,” says Chipiliro jobs over the next six years.

22 Access To Finance 23 Lebanon

Like other countries, Lebanon has many Just ask Tania Moussallem, BLC Bank’s high-potential women entrepreneurs. assistant general manager and a driving Financing But they are hard-pressed to find force behind the initiative. financing. Just 3 percent of the country’s “The market was severely under- bank loans go to women-owned firms, served, so for a company like ours it was Women holding back business expansion and a great differentiator,” she says. By It's Smart Business job creation. spurring women’s entrepreneurship, One pioneering local lender, BLC she adds, the program will not only help Bank, is helping reverse that trend. create jobs across Lebanon, but also With IFC’s support, it now specializes attract interest from other banks in the in helping women access financing, Middle East, the region with the world’s BLC Bank: becoming the first bank in the Middle largest gender gap in finance. The Middle East’s East to target that high-impact market. It all began in 2010, when IFC trendsetter Launched in March 2012, the bank’s introduced Tania to the Global Banking We (Women Empowerment) Initiative Alliance of Women, the leading organization offers not just loans, but training, of financial institutions driving women’s recognition, networking opportunities, wealth creation worldwide. Bringing back and other key services. In its first four many good ideas from its annual meeting months, it enabled BLC Bank to extend in Washington, she championed the cause twice as many loans to female in her bank—where she is the only female entrepreneurs as it had made in all of 2011. senior manager. An IFC advisory services One client, Claude Jabre, borrowed program then shared our global $260,000 to expand her fast-growing experience in this critical field, helping Beirut beauty salon. “In Lebanon, and her institution become the regional the Middle East, it is a man’s world,” trendsetter in women’s banking. she says. “By supporting female In the end, the impact may not just be

entrepreneurship, BLC Bank gives us the financial, but cultural as well. PHoto Tania Moussallem, banking on women opportunity to believe in ourselves and “Initiatives like these are key to changing at BLC Bank in Lebanon. lets us carve out our place in the world.” attitudes about the role of women in The initiative is not just good for society,” said Maurice Sehnaoui, BLC development. It is also good for business. Bank’s chairman and general manager.

24 Access To Finance 25 India Right Vineet Rai, CEO of Aavishkaar, a Mumbai venture capital firm growing with IFC support. Its focus: hard-to-reach rural SMEs.

For all its success, India still has more Not afraid of risk, in 2009 Misra left poor people than any other country— a secure job in London with the biggest The Rural more than all of Africa, one of every name in Indian business, Tata Group, three in the world. wanting to make his mark at home with Many live in isolated rural areas, both financial and social impacts. Taking Economy seemingly off investors’ radar in on a state dairy monopoly unused to Ripe for Investment booming Mumbai. competition, he launched Milky Moo, Seemingly. a new brand that is catching on fast, Ramesh Behera is a villager in Orissa, en route to $6 million in sales in year one. one of the low-income states that are In addition to the 5,000 farmers, this IFC’s focus in India. Minimally supports 150 processing plant jobs— Scaling up models that work educated, owning little, and having no numbers that will rise as its sales rise significant job opportunities, his future and related cheese and yogurt products was grim until this year. Then a start-up hit the market. dairy firm arrived on the scene, helping But without early investors who shared him maximize his one productive its vision, Milk Mantra would not exist. asset—a cow. In large part, it does thanks to IFC client Now Milk Mantra agents buy his milk Aavishkaar (Hindi for ‘invention’), almost every day, transferring it into a cutting-edge Mumbai venture capital sophisticated cold storage equipment house with a proven track record in and processing it with state-of-the art building rural SMEs. Tetra Pak equipment for sale in half-liter Aavishkaar’s seed capital helped Milk packages for 13 rupees (40 US cents). Mantra raise the full $5 million it needed even higher. Eyeing the next level, we Scale is everything in India. Another Photos Prospects are getting brighter for Ramesh is one of its 5,000 initial to start operations, coming with valuable recently invested in Aavishkaar’s new of our inclusive business clients in Ramesh Behera (left), one of several small-scale dairy farmers in a remote Indian village who suppliers, smallholders whose income advice from CEO Vineet Rai and his team $120 million SME fund and presented Mumbai, FINO, has enabled 46 million now supply Milk Mantra, a new dairy backed by has risen by 30 percent through the on keys to success like strategy, financial it to the G-20, which awarded a people to open basic bank accounts Aaviskhaar’s venture capital. company’s purchases. reporting, and corporate governance. $1.5 million grant to help Aavishkaar’s with innovative biometric technology— “We’re a small company with some Aavishkaar investments helped create advisory arms scale up its model with and, with our help, will soon be big ideas,” says Milk Mantra CEO 7,400 rural jobs before the Milk Mantra hundreds of other investors. spreading its model to Africa as well. Srikumar Misra. deal, which should boost these totals

26 Access To Finance 27 Judith Ngayap, cleaning company owner in Cameroon Removing the Obstacles: Skills

udith Ngayap’s cleaning company in Another innovation of IFC, the SME Cameroon had eight employees in 2009. Toolkit, uses computers and mobile devices J It did about $70,000 in business for rather than training classes to bridge the local clients. knowledge gap in 32 countries. Mahinda By her own admission, she could neither Malgoda owns a small grocery store in rural use nor interpret financial statements at the Sri Lanka. He credits the marketing and time, and lacked the technical knowledge to business strategy skills he learned from the buy equipment, file tax returns—or grow Toolkit with more than doubling his sales her business. since 2006—and enabling him to build a Mismatch in the Over the past year her revenues almost 12-employee spice business on the side with tripled. She now employs 50 workers, which formal financial statements. “Before, I was made for an interesting conversation with her mainly just a trader,” Mahinda says. “But Jobs Market accountant. now I’m really getting into the business side “I was able to ask pertinent questions to of things.” IFC has teamed with IBM as the the extent that he asked me, Mrs. Ngayap, technology development partner in • 45 million what have you done?” she recalled. “And I strengthening and expanding the SME job seekers join the developing answered him, ‘I have been trained.’” Toolkit, which is supported in Sri Lanka world’s labor force every year She attributes the change to courses in by Norway and the Netherlands. Source: "Building an Employment-Oriented cost control, business plan preparation, And there are other ways IFC helps Framework for Strong, Sustainable, and Balanced Growth," in Challenges of Growth, Employment human resource management, and other the private sector fill the training gap… and Social Cohesion, Background Paper for High- areas she took through Business Edge, Level ILO-IMF Conference, ILO, 2010 IFC’s affordable SME management training platform, delivered commercially • 34% of firms in 41 countries through 850 accredited training providers say they cannot find the in 38 countries. It has built the skills of workers they need more than 150,000 small-scale Source: Talent Shortage Survey Research entrepreneurs like Judith—the key Results, ManpowerGroup, 2012 job-creators in their countries, where top-quality training is otherwise usually Sri Lankan grocery store available only to an elite few. owner Mahinda Malgoda

28 Skills GLOBAL PHOTO In China, IFC is financing education and training services provider Ambow Holdings' expansion, increasing local youths' employability in the job market.

Photos Jovelyn Manamat (left) nearly doubled her income with new skills she learned from an IFC-financed training institution in the Philippines. In Ghana (below), our client Ashesi University College finds 99 percent of its graduates employed soon after graduation.

With the right skills, people can get the to increase enrollment from 1,400 today to jobs that can help them escape poverty. 6,400 by 2015. Building Private employers often have skilled and In addition to job training, conventional semi-skilled positions to fill, but can’t find educators in tune with the business world’s enough qualified people to take them due hiring needs can help build the skills that break Skills to skills shortages in the local economy. poverty. In Ghana, Ashesi University College’s A Key to Increased IFC helps brings more people into the Class of 2011 had a 99 percent job placement workforce with updated, in-demand skills. record within five months of graduation, with Incomes In the Philippines, our $16 million loan banking and education the two most popular is enabling the Asian School of Hospitality fields. IFC’s $6 million investment is helping Arts (ASHA) to expand its curriculum to it increase enrollment from 500 to 2,000, include courses in hotel, restaurant, and maintaining its focus on computer science, A private sector–based hospitality management. But its existing business administration, and other priority areas. approach to training program has already transformed the life IFC’s investments are creating opportunities of Jovelyn Manamat. for people to receive the training and education Skills she gained at ASHA have helped that they need to acquire skills to help them Jovelyn nearly double her income. Her improve their lives. By making people take previous job as a maid was not stable, responsibility for their livelihoods, there is a paying her just $200 per month. But now high level of ownership to the development Jovelyn, 25, receives $350 per month as a process and a better understanding of the housekeeper, including meals, at ASHA’s need to break away from the cycle of poverty. sister company, the Cravings Group of In China, IFC is providing a $50 million Hotels and Restaurants. She credits the financing package for Ambow Education turnaround in her life to an ASHA course Holding, a leading education and training services funded through a scholarship program, provider that offers after-school tutoring and and plans to take more. The courses also career enhancement training. Ambow’s career include mentoring and motivational enhancement programs focuses on IT and digital components that encourage young women media training to help university level students and to set goals for themselves in order to graduates improve their skills and employability. improve and transform their lives. IFC’s loan is expected to support expansion of With our financing, ASHA is expected Ambow’s career enhancement business.

30 Skills 31 Middle East/ North Africa

There are 1 billion young people in then upload it for Qordoba’s full-time staff developing countries today—more than to finalize—often much faster and cheaper YOUTH ever, and growing fast. than traditional translation services. Clients These youth are far less integrated into range from the world’s largest multinationals the labor market than their adult to news agencies and software firms. UNEMPLOYMENT counterparts, facing higher rates of “These people are my generation,” Private Sector Solutions unemployment and underemployment. May says. “They possess the flexibility, The effects vary considerably from region collaborative mindset, and resourcefulness to region, but are felt worst in the Middle that will be required to create the hundreds of East and North Africa, home to the millions of jobs needed in the next decade.” world’s highest rates of youth Her essay, Get to Work: Inclusive Markets Opportunities in the unemployment. Even university graduates for Labor, was the winner in a global digital economy there face bleak job prospects, often competition sponsored by IFC and the having degrees that left them ill-equipped World Economic Forum that sought for the needs of the modern workplace. solutions to the global youth unemployment “If you ask any person of my generation crisis. She then shared these ideas with today what they are most concerned IFC’s donor partners at an event during about, I can almost guarantee that the the International Monetary Fund–World answer will be finding a job,” says May Bank Group Annual Meetings in Tokyo Habib. She is the founder of Qordoba, a in October 2012. year-old Dubai firm whose innovative For additional impact in education business model cuts to the core of the for employment, IFC has collaborated problem—the company sees jobless, with the Islamic Development Bank on educated youth not as a problem, but as a the E4E Initiative for Arab youth. vast pool of skilled freelance talent. Its mission: providing youth with skills Offering fast, Web-based translation that are relevant to the marketplace by

services to clients worldwide, Qordoba has investing in education, engaging Photos Tapping into the large pool of unemployed university graduates in the Middle East, quickly created employment for more than stakeholders, and enabling solutions so Dubai-based IT start-up Qordoba is putting more than 500 young people to work across 500 young freelance translators. Working that Arab youth earn a better future. the region. They translate Arabic and other languages remotely for a wide range of clients, working from their laptops. Qordoba CEO May Habib (above right) was a featured speaker in Arabic and other languages, they at an IFC seminar at the October 2012 International Monetary Fund–World Bank Group translate text remotely from their homes, Annual Meetings in Tokyo.

32 Skills 33 Vietnam Photo TechcomBank is an IFC client financial institution in Vietnam. Its SME loans help create jobs and reduce poverty.

Vietnam has one of the world’s most a BTC training program in 2009. A year impressive records in reducing poverty. later, she helped Tropical Agriculture Joint Bank In the early 1990s, 58 percent of its Stock Co., a rice seed producer and trader, people were poor; by 2008, it was down to secure financing to buy and develop a just 15 percent. factory in Hung Yen province to supply Training Local SMEs have been a major farmers with good-quality products. With Opening Up Access contributor, creating jobs and increasing her help, the company also obtained a incomes over the years. But to grow, they working capital facility to expand its trading to Finance needed financing from good local bankers and export business. Since then, Tropical who understood their needs and could has more than doubled its revenue as well as offer innovative solutions. This is why IFC its staff. Revenue has risen to $2.2 million, helped build the Banking Skills Training while staff has increased to 50. It plans to Bankers learn to lend and Consultancy Joint Stock Co., or BTC. hire another 50 employees soon. to SMEs A little more than 10 years ago, there IFC helped BTC train its trainers early were no high-quality training courses for on and develop a full range of courses for bankers in Vietnam. Then in 2001, a bankers. A joint stock company since 2006, Photos Vietnam's Tropical not-for-profit, three-person training BTC now employs 200 local and foreign Agriculture (far left) is hiring operation opened its doors inside IFC’s trainers. This year it received a license from more workers with financing Ho Chi Minh City office. the Ministry of Planning and Investment to from An Binh Commercial Joint Stock Bank. Before Since then, BTC has become an operate longer-term courses and larger making those loans, Nguyen independent entity, offering hundreds of classes under the name Institute of Thi Phuong Hang of An Binh (left) honed her SME finance international-standard training courses to Manpower, Banking and Finance. skills at the IFC-supported boost the professional skills of 50,000 IFC continues to train BTC staff on Bank Training Center in Hanoi Vietnamese bankers. Practical courses topics such as credit bureaus, trade finance, (above). “I am very happy that I was able to help this company such as relationship management and internal audits, risk management, corporate and other small enterprises credit appraisal for small and medium governance, and new financial products to grow. They are our key clients and as they expand, they enterprises helped bankers become better help enhance access to finance. In 2011, the can hire even more people,” at serving small business clients. State Bank of Vietnam, the country’s central she says. Nguyen Thi Phuong Hang, deputy bank, recognized BTC for its strong director at the Hanoi branch of An Binh contribution to the development of banking Commercial Joint Stock Bank, completed in the country.

34 Skills 35 Supply and Serena Kigali Hotel, Rwanda Distribution • $64 million in local economic Chains activity supported since 2007, indirectly creating more than 1,100 jobs • $5.3 million more spent outside the hotel by guests each year, Bertha Kabuto and employee, supporting additional restaurant, Rwanda farm, and taxi-driver jobs • 350 full-time staff, receiving an average of five days of training each year to build skills • 250-room Marriott now being built nearby with additional impact, expanding the business case first set eaching in Kenya taught Bertha Kabuto of employment at every scale—sometimes by the Serena one thing: she wasn’t a teacher. She was much larger. There were few opportunities T a born entrepreneur, and needed to go in Alex Boampong’s remote part of western home to Rwanda to open her own company. Ghana until Newmont Mining’s Ahafo She did just that in 2006, calling it Eden gold mine opened in 2006. Receiving Harvest and buying fresh fruit and vegetables $125 million in financing and extensive Ahafo Gold Mine, Ghana from women farmers. Living in a small environmental and social support from IFC, • 10% of all national exports come country, she soon she needed a bigger market. the mine too was a game-changer. Alex got from the mine One began to emerge later that year when a contract from the mine as a sole chainsaw an arm of the Aga Khan Fund for Economic operator, then worked his way up from • 48,000 direct and indirect jobs Workers at Ahafo mine, Ghana Development won a 30-year contract to there. Receiving training and contracts created revitalize a government-owned hotel. from Newmont and its South African Renamed the Kigali Serena, it underwent infrastructure contractor, he now works • $3.2 million spent on annual a $20.8 million IFC-financed expansion for other companies as well. Today he training for full-time employees (2009) and soon became Rwanda’s top business employs nearly 300 local workers. hotel. Since 2007 it has bought almost Ahafo’s socioeconomic impact study • 28 indirect jobs created at suppliers $64 million of goods and services from shows the mine has created 28 indirect jobs and distributors outside the mine for local firms, indirectly supporting more for people like Alex against every direct job every one created inside than 1,100 jobs—about three times the in its own workforce. And jobs come not just number it employs itself. The Serena is in large firms’ supply chains but in their Sources: Investing in Hotels and Demonstrating now Eden Harvest’s main client, buying distribution networks as well…. Development Impact: Case Study of IFC’s Investment more than $190,000 of its produce. That in the Serena Kigali Hotel, Rwanda, Overseas Development Institute, UK, 2012 allows Bertha to employ six people. The Socioeconomic Impact of Newmont Ghana Gold Linking small firms to larger ones, Ltd., Steward Redqueen, the Netherlands, 2011 supply and distribution chains are a driver

Ahafo mine, Ghana Serbia

Agriculture is the most important “This loan demonstrates the confidence of economic sector and source of employment one of the world’s leading financial institutions Agribusiness in most emerging markets. in our business strategy,” said Miodrag Kostic, A Critical Sector In Serbia, where almost half the people live President of MK Group. in rural areas, revitalizing agribusiness is Last year IFC also extended a €40 million essential for creating jobs and bringing down ($49 million) loan to Koncern Farmakom MB, an unemployment rate of over 20 percent. which employs more than 3,000 people. IFC The potential is vast. Strong global arranged additional financing of €80 million Jobs throughout demand for food is creating new markets for ($98 million) from other lenders—the largest the supply chain Serbian agribusiness companies: in 2011, syndications deal that year in Southeast Europe. Serbia’s total agricultural exports increased Although these kinds of large companies by fivefold. employ thousands, SMEs make up most of the But exporters need investment to continue agribusiness supply chain and have the most expanding, and capital has been scarce since potential for job growth in the industry. the 2008-09 financial crisis. IFC is helping A €12.5 million ($15.4 million) IFC loan Serbian companies convince skeptical will help Serbian beverage maker Vino Zupa investors that they offer good opportunities improve its operations and its environmental for profitable business. and social standards while also supporting a Recent IFC transactions have provided sizable network of local suppliers. more than €207 million ($255 million) in “Fruit production is a major employment direct financing for Serbian agribusiness generator in my region,” said Vino Zupa CEO companies. IFC is also helping companies Rade Jevtovic. “We have strong links to more improve corporate governance and introduce than 14,000 fruit farmers, retailers, and other new standards, helping them reach new small companies.” markets of customers. Meanwhile, IFC is working with banks in In June 2012, IFC lent €45 million ($55.3 Serbia to increase access to finance for small

million) to MK Group—the leading agribusinesses and farmers. IFC has provided Photos Focusing on agribusiness, IFC client agribusiness conglomerate focused on Société Générale Srbija with €110 million Farmakom creates much-needed jobs in Serbia, primary agriculture and meat processing. ($135 million) in loans. UniCredit and where the unemployment rate exceeds 20 percent. This company employs more than 5,000 ProCredit Leasing in Serbia have also people in Serbia and Ukraine. benefited from IFC financing.

38 Supply and Distribution Chains 39 India RIGHT Orissa is one of India's Photos Once unemployed in a poorest states, home to timeless local village, Ramu Rawat (left) villages that have yet to share in now supervises workers at his the country's economic boom. own thriving construction firm. It serves IFC client Orissa Cement (below), whose positive impacts stretch far and wide across the low-income state.

Life has changed for Ramu Rawat. niche for local companies like OCL that Five years ago he was unemployed. manufacture and sell close to a market Orissa He spent his days idling around his others overlook. After using our financing village in Orissa, one of India’s poorest to open its quiet, low-emission plant, it states. Nothing much was happening. hired and trained 700 workers— Cement Then he noticed the new $70 million, 80 percent of them from the immediate High Impact in a IFC-financed plant that local company area. Many have since risen to become Orissa Cement Ltd. (OCL) had built in supervisors, production managers, and Low-Income State his area. Towering above a timeless assistant engineers, launching new careers countryside of dirt roads, rice paddies, in an area that once had little but and mud huts, it was hard to miss. subsistence farming. But its level of indirect Ramu went to the gate and asked for a job creation, including Ramu and his crew Meet Ramu job. With no experience to offer, he got a of 200, is more than 10 times higher at chance to do manual labor—and did well. 7,200, and the many schools, clinics, and Impressed with his drive and attitude, temples it has funded give it a good name in fast-growing OCL sent him back to his the local community. village to find more workers. Seeing he was Reclaiming rainwater for industrial use, not just a worker, but a leader, it put him on reforesting a greenbelt on its property, and his way—not to just a job, but a career. even having an elephant corridor nearby, Today Ramu has his own contracting OCL shows that growth and sustainability company, supervising a crew of can go hand in hand. 200 workers whose construction and “By working with IFC we have received maintenance services are much valued not only capital, but exposure to best practice by OCL. He exemplifies the firm’s large in environmental and social standards indirect impact, as do the 500 or more and other areas,” says Managing independent truckers who arrive at its Director Gaurav Dalmia. “It’s not that gate each day, waiting to load up and we didn’t already know these things, but haul its popular Konark cement to sales IFC has helped us focus on them, and outlets across the state. anytime we needed something, they were Demand for cement is growing by there to help us understand it better. 11 percent a year in Orissa, opening a That was very helpful.”

40 Supply and Distribution Chains 41 Africa Photo Strong demand for SAFAL roofing products creates jobs at local distributors like Muki Hardware, outside Mombasa.

Africa is emerging fast—investing in the many wholesale and retail outlets that sell its itself, creating its own jobs. products. Most are low- and unskilled labor SAFAL It is still the poorest continent, where positions that dramatically boost workers’ incomes. A Steel Roofing almost 70 percent of the people live on Joseph Muki left a teaching job ten years ago $2 a day or less. But a continent-wide to open a small hardware store near Mabati’s Leader in 11 African GDP growth rate of 5 percent, improved plant outside Mombasa. Lacking financing or Countries infrastructure, and investment climate business training, he struggled at first. But reforms are attracting more and more carrying Mabati roofing made the difference. private capital—creating stable, formal Today it accounts for 70 percent of sales at his sector jobs that break poverty. And today three stores. Together they employ 45 people: Creating 4,200 direct jobs— that capital is starting to come not just from drivers, loaders, cashiers, and others. and supporting 24,000 foreign investors, but from Africa itself. Nearby, Peter Katwa, 23, looks proudly at the indirect ones Three rounds of IFC financing and new house his truck driver father is building. “It advice since 1999 have helped build SAFAL will be much better than the small one we rent in Group, a local steel processing group whose town now,” he says. “We always wanted it to affordable metal roofing is popular with have Mabati roofing. It’s the best.” homeowners at all income levels. When we IFC’s latest $15 million loan is helping upgrade Photos Store owners Joseph and Christine Muki (above) now employ first backed the firm, it was primarily one SAFAL plants in Kenya, Tanzania, and South 45 workers in the Mombasa area. flagship company, Mabati Rolling Mills in Africa that feed its business in interior countries. They are part of a SAFAL Group distribution chain that supports Kenya. But today SAFAL operates in The growth fuels a wise reinvestment of earnings, 24,000 jobs in Africa—almost six 11 African countries and is considering new including creating a nonprofit vocational school times more than the steel company markets like Burundi, the Democratic that has trained more than 1,500 impoverished employs itself at its own factories. Republic of Congo, and South Sudan. Kenyan youths who had to drop out of school, Fast-growing and widely respected, unable to pay the $450 annual fees. Almost all get earning Company of the Year honors in auto mechanic, welding, dress-making, or other Kenya in 2011, Mabati and other subsidiaries jobs with area employers soon after completing the of SAFAL Group now employ 4,200 two-year, $150-a-year course. workers, giving competitive wages, transport, “We focus on those who have the ability but medical insurance, and meals to all. Yet our not the opportunity,” says Mabati Technical analysis shows it supports almost six times as Institute Principal Norman D’Souza. “It’s many jobs—24,000 at the latest count—at making a difference.”

42 Supply and Distribution Chains 43 Latin America and the Caribbean

Empowering women is a key to business, which allows me to have income sustainable development. and be recognized for my effort,” she says. Belcorp It can take many forms. But in societies “It means I am an economically independent Cultivating where women have few opportunities for person. I can cover my expenses, my education and employment, starting a daughter’s, and contribute to my home.” New Women business can be one of the most effective On average, the women’s income is just Entrepreneurs avenues to improving their lives, and the lives $30/month when they join. But over time of their families and communities. they can increase it to $825/month as Belcorp Belcorp, a Peruvian cosmetics company sales consultants. New IFC investment currently expanding across 16 countries in and advisory services will enable Belcorp Creating 400,000 jobs Latin America, is tapping into that to expand and increase its sales force to entrepreneurial drive. It is helping thousands 1.4 million over the next four years. of women start and build their own sales This means many women will benefit like businesses, bringing them into the distribution Mercedes García, who came to Lima two chain of its powerful brands. decades ago from the Andes, seeking a better The firm currently employs about 1 million life. She was alone, with two children to feed, beauty consultants who sell three lines of and few options. Today, she is one of Belcorp’s cosmetics. Most are women from low-income top 100 consultants in Peru. She has moved backgrounds, many of them single mothers. her family from a single room to a house, and Once on board, Belcorp provides them with her two children are university students. She credit and training, plus low-cost life and has also raised four nieces, whom she brought hospitalization insurance to protect their from other regions to give them a better families—benefits most have never had before. education. “I feel that education is the best Belcorp then helps them set goals and ways heritage I can give to face the future,” she says. to meet them. This gives the women new Removing barriers and giving women the tools confidence to become more outspoken, they need to be successful business people bring

both in and outside the home. lasting development impact. Their children are Photos Once struggling, Peru’s Mercedes García and her niece (left) Karla Landaver’s life in El Salvador has better nourished and better educated, giving now have stable, secure lives thanks to income from IFC client Belcorp. So do El Salvador’s Karla Landaver (above right), and the Lima-based changed dramatically in the nine years since them a better start in life. IFC is helping Belcorp cosmetics firm’s many other sales agents across Latin America. she began to sell Belcorp products. “Belcorp spread these opportunities to 400,000 more has given me the opportunity to have my own women across 16 countries in Latin America.

44 Supply and Distribution Chains 45 Papua New Guinea

When IFC-backed telecommunications about 120 enterprises, mostly micro, company Digicel entered the Papua New small, and medium businesses. Airtime Guinea market in 2006, it brought Joe Lumaris, deputy principal of reliable and affordable mobile phone TAFE International Education Agency, services to millions of people. found the training course to be Sales It also created new jobs for some professional and easy to use. “The 30,000 people who sell Digicel airtime. Business Edge training materials and One of them is Mary, who sells the program are excellent. It’s very user Agents cards at a market stall in rural Rabaul in friendly,” said Joe. Targeting the Papua New Guinea’s east. She has grown Digicel distributors will also be taught her business to include eight staff, mostly how to transfer credit electronically from Grassroots Market young men who were previously Digicel to customers via their own phones unemployed. instead of selling scratch top-up cards. “It has given lots of work to men who For distributors in remote areas lacking couldn’t get jobs and makes them good secure storage facilities, removing cards Selling airtime brings people,” she says. from the process will increase business 30,000 new jobs To help entrepreneurs like Mary build prospects and help increase access to on their success, IFC Advisory Services telecommunications for more people. designed a business training program “IFC’s Business Edge product will help that teaches Digicel airtime credit our retailers better manage and grow their distributors business planning, sales, and businesses,” says John Mangos, CEO of customer service skills, helping them Digicel Papua New Guinea. “This is a grow their businesses, create jobs, and win-win proposition for our clients, as it earn higher incomes. will improve customer service and IFC recently held workshops in Papua increase access to telecommunications New Guinea’s cities of Mount Hagen and products and services.”

Port Moresby focused on customer care IFC has invested more than Photos IFC-financed Digicel has created 30,000 and improving sales skills. The program, $100 million in Digicel to expand sales and distribution jobs in Papua New Guinea. Business Edge training strengthens the independent adapted from IFC’s Business Edge services in the Pacific, including in Fiji, agents’ management skills. (see page 29) training product, targets Samoa, Tonga, and Vanuatu.

46 Supply and Distribution Chains 47 Working Conditions

ore than 45 million job-seekers join Labor and Working Conditions starts the labor force every year. They don’t from the assumption that a sound worker- IFC Performance M just need jobs. management relationship is a key They need good jobs. ingredient in the sustainability of any Good jobs are not just the ones that pay company. It is guided by International Standards well, raising workers’ skills, incomes, and Labor Organization (ILO) conventions security, and putting them on a path to and other instruments. 1. Assessment and Management of prosperity. They are the jobs with the IFC and the ILO have formed the Environmental and Social Risks and greatest impact—something that varies Better Work program, a strategic Impacts across countries, depending on their phase partnership to improve labor standards of development, their natural and human compliance. It brings together local firms, 2. resource endowments, and other factors. international buyers, governments, and Labor and Working Good jobs are the ones that are good for workers’ and employers’ organizations to Conditions development, supporting inclusive, improve compliance with labor standards sustained economic growth by increasing: and promote competitiveness in global 3. Resource Efficiency and Pollution • Living standards supply chains. Cambodia created 165,000 Prevention • Social cohesion jobs and increased the value of its exports 4. Community, Health, Safety, and • Productivity to the U.S. by 151 percent between 2001 Security The workplace sits at the forefront of this and 2008. Better Work helped to ensure process. It is a key setting for the private that these jobs meet high standards. Better 5. Land Acquisition and Involuntary sector’s contribution to development. Work supports the garment sector of seven Resettlement To ensure environmental and social countries, and is now expanding into 6. Biodiversity Conservation and sustainability, IFC has eight Performance closely related sectors such as footwear, Sustainable Management of Living Standards defining clients’ roles and textiles, towels, and sheets. Analysis has Natural Resources responsibilities for managing their projects shown that improving worker relations can in a sustainable way. All IFC projects are go hand-in-hand with productivity 7. Indigenous Peoples assessed for consistency with the applicable increases, and that following the financial 8. Cultural Heritage Performance Standards, and clients crisis companies with higher standards indicate that our expertise in these areas is were more likely to survive…

Garment factory, Cambodia an important reason for choosing to work with us. Our Performance Standard 2 on Albania

Sustainability is a strategic pillar in IFC’s what society expects of us we cannot sustain support for private sector development in our business,” said Maria Alexiou, Corporate Good Working emerging markets. Social Responsibility Senior Manager for the From safer working conditions, to cleaner Athens-based TITAN Group, an IFC client. water or more effective community engage- “Environmental and social standards are not Conditions ment, our Sustainability Framework has real just nice to have, but essential to the way Bringing Bottom-Line and positive impacts on the environment and businesses are perceived.” the lives of people in developing countries. In 2008 IFC financed TITAN’s€ 210 Benefits The Performance Standards are an essential million, state-of-the-art Antea cement plant in element of the Framework. They define our a remote part of Albania, while also providing clients’ roles and responsibilities in managing sustainability advice. Together IFC and their projects in a sustainable way and help TITAN worked with a team of Chinese, Adding value for all identify opportunities to improve business Greek, and Albanian contractors to set and performance. implement human resources policies and Performance Standard 2 on Labor and procedures, labor audits, occupational health Working Conditions guides companies in and safety monitoring systems, and training supporting fair treatment of workers, programs to boost the skills of local workers. securing safe and healthy working Alexiou says IFC provided not only standards, conditions, and enabling constructive “but real implementation support and relationships between workers, expertise that added value.” management, and contractors. Doing so is TITAN wanted local workers to take conditions. For specialized personnel but indirectly supports almost twice as PHOTOS Following IFC’s Performance an investment that brings significant advantage of Antea’s long-term employment brought from China by the Beijing-based many in transportation, quarries, Standard 2 on Labor and Working Conditions, IFC client TITAN Group of Greece has built benefits.. With today’s rising expectations opportunities, but saw that few had the right contractor, accommodations were provided, security, and catering. a state-of-the-art cement plant in Albania, on labor standards among consumers, skills or any way to develop them. Working including Internet access, health services “When you are entering a new market it upgrading skills of local workers in an area with few other career opportunities. investors, and other stakeholders, good with the local government, it set up a from Chinese doctors and nurses, is critical to be committed to these kinds of working conditions pay off in many ways: vocational training laboratory to certify recreational options like ping pong, meals environmental and social standards,” recruiting and retaining workers, increasing electricians, engineers, and machine operators. from all Chinese regions, and individual Alexiou said. “This is something that will productivity, protecting a company’s The government now runs the program, which lockers in all dorm rooms where workers differentiate you from others and give you reputation, and others. has so far trained approximately 120 workers. could keep their own documents. the opportunity to live up to your values.” “Businesses are here to serve society as During construction, TITAN employed Operational since 2010, the plant well as their shareholders. If we don’t realize 1,100 workers, providing safe and healthy currently employs 200 workers directly,

50 Setting Standards 51 Conclusion PHOTO A worker walks past rolled coils outside a steel factory in in Indonesia's West Java province. It produces Contact us enough rolled coil and flat steel each year to build 4 million cars.

Headquarters CREDITS Washington, D.C. IFC Corporate Relations 2121 Pennsylvania Ave., N.W. Telling Our Story— Washington, D.C. 20433 USA Jobs Telephone: (1-202) 473-3800 Produced by Western Europe IFC Corporate Relations Department Paris 66 Ave. d’Iéna Photography Kesara Ratnavibhushana, 75116 Paris, France Telephone: (33-1) 4069-3060 TITAN Group (front cover and page 51) Judith Ngayap (page 28) The world must urgently address its heard in policy reform debates alongside that Racheal Yeager/BSR HERproject, Veolia, ASHA, Ashesi University College enormous jobs challenge. of government and civil society. This can do Europe, Middle East, and North Africa ITU, CHF International, IFC Photos, (page 30) Failure to do so would be unacceptable— jobs much to support a sustainable, inclusive Istanbul Markus Kostner/ Reuters/Muhammad Hamed, Central to the a missed opportunity to reduce poverty, process that benefits all, not just a wealthy few. Buyukdere Cad. No: 185 Kanyon Ofis Blogu World Bank (inside cover) May Habib, World Bank Photo (page 33) boost economic growth, and promote IFC and other private-sector-oriented Kat 10 IFC Photo (page 2) IFC Photos (pages 34 and 35) Global Agenda sustainable development. development finance institutions have roles Levent 34394 Istanbul, Turkey Teun Voeten/Panos (page 6) Overseas Development Institute, The private sector provides 90 percent to play. Using a “job lens” in our country and Telephone: (90-212) 385-3000 Steve Okoko (pages 7 and pages 42-43) Newmont Ghana Gold Ltd. (page 36) of today’s jobs, and thus holds the key to regional strategies helps us identify key Tamar Barbakadze (page 8) Farmakom (page 39) meeting this challenge. It is crucial to constraints and specific ways whereby we East Asia and the Pacific IFC Photo, Markus Kostner/ Manas Ranjan Ojha (pages 40-41) understand the key constraints that keep it can help our clients overcome them. Hong Kong World Bank (pages 9-10) Belcorp (page 45) from growing and creating jobs, and some We must look beyond direct job creation, 14/F, One Pacific Place Racheal Yeager/BSR HERproject Stephen Rae (page 47) proven ways to overcome them throughout however. Employment effects are often much 88 Queensway Road Hong Kong (page 13) IFC Photo (page 48) the developing world. larger in supply chains and distribution Telephone: (85-2) 2509-8100 Applied Solar Technologies (pages 14-15) TITAN Group (page 51) IFC is just one of many organizations networks, generating jobs that often provide Daniela Nader, World Bank Photos Dadang Tri/Reuters (page 52) making a contribution in this area. By no important opportunities for the poor. We South Asia (pages 17 and 11) means do we have all the answers. The must also address the skills mismatch in key New Delhi Kesara Ratnavibhushana, Design Partner World Bank and many others are also doing labor markets, helping better align the skills Maruti Suzuki Bldg Al Amana (page 18) Design Army Plot No.1, Nelson Mandela Road excellent work, and we benefit enormously taught with the ones needed. This will Cogitel (pages 20 and 21) Vasant Kunj Printing from the knowledge they share with us. typically require bringing together various Neha Sud, World Bank Photo (page 22) New Delhi, India 110070 Westland Printers We focus on key obstacles to job stakeholders, including policymakers, private Telephone: (91-11) 4111-1000 BLC Bank (page 25) creation—leaving aside other important companies, training providers, and the youth Aavishkaar, Manas Ranjan Ojha factors such as the macroeconomic themselves. Focusing on gender issues and Sub-Saharan Africa (pages 26 and 27) environment and social safety nets, which ensuring high environmental and social Johannesburg are typically beyond what the private sector standards in the workplace are also essential, 14 Fricker Road, Illova, 2196 Johannesburg, South Africa or private-sector-oriented development and they also help companies improve Telephone: (27-11) 731-3000 finance institutions can address. productivity, reduce risks, and increase the Policymakers must consider these likelihood of survival during difficult times. Latin America obstacles in their own specific country There is no one single solution. But this and the Caribbean IFC has offices in more than contexts. Identifying and removing them large combination of responses can do much Washington, D.C. 80 countries around the world. will contribute significantly to job creation, to support job creation—one of the most 2121 Pennsylvania Ave., N.W. Washington, D.C. 20433 USA especially when the private sector voice is critical issues of our times. Telephone: (1-202) 473-3800

52 Stay Connected OUR VISION Web and Social Media Resources That people should have the opportunity to escape poverty and improve their lives. Facebook www.facebook.com/IFCwbg Twitter OUR VALUES www.twitter.com/IFC_org Hashtags: #IFC and #TOSjobs • Excellence • Commitment LinkedIn http://on.ifc.org/ifcLinkedIn • Integrity Scribd • Teamwork www.scribd.com/IFCpublications • Diversity YouTube www.youtube.com/IFCvideocasts Telling Our Story OUR PURPOSE www.ifc.org/tellingourstory To create opportunity for people to escape poverty and improve their lives by catalyzing the means for inclusive and sustainable growth, through:

• Mobilizing other sources of finance for private enterprise development • Promoting open and competitive markets in developing countries • Supporting companies and other private sector partners where there is a gap • Helping generate productive jobs and deliver essential services to the poor and vulnerable

To achieve its purpose, IFC offers development- impact solutions through firm-level interventions (direct investments, Advisory Services, and the IFC Asset Management Company); promoting global collective action, strengthening governance and standard-setting; and business enabling environment work.

Creating Opportunity Where It’s Needed Most

ifc.org January 2013