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The pandemic has drastically impacted the private sector in the region, severely affecting the most vulnerable people in the region, Mora said and noted that the viral infection has laid bare the region's existing vulnerabilities in the financial sector, disrupting businesses, particularly small businesses, and leaving so many people exposed.

The coronavirus pandemic has uprooted many small businesses and they are grappling with a host of challenges. In a bid to help them regain confidence and sustainability, International Finance Corporation (IFC) has ramped up its investments in South Asia, committing over $3.8 billion, including mobilisation and short-term finance, in South Asia as of June 2021 — resulting in a record investment volume of over $14.9 billion in the last five years in the region, towards a green, inclusive and resilient recovery.

In India, IFC’s largest client country globally, total commitments at the end of June stood at $1.7 billion representing an increase of over 51 percent from last year. Likewise, in Bangladesh, IFC made total commitments of $791 million, an increase of almost 33 percent from last year.

“The Covid-19 crisis has drastically impacted the region’s private sector, which has severely affected the region’s most vulnerable people. Covid-19 has laid bare the region’s existing vulnerabilities in the financial sector, disrupting businesses — particularly micro, small, and medium enterprises—and leaving so many people exposed. That’s why we have focused our attention on supporting moves to improve resilience on multiple fronts, as all indications are that the road to recovery will be long,” said Alfonso Garcia Mora, IFC’s Vice-President for Asia and the Pacific region.

Monetary assistance

IFC has committed $590 million in Covid-response deals in South Asia — with additional deals worth over $100 million in the pipeline. Further, IFC committed $353 million in climate finance and $490 million in IDA/FCS (International Development Association/Fragile and Conflict-Affected Situations) countries in the region.

IFC already provided financing and advisory support for the production of critical pharmaceutical products and medical equipment such as personal protective equipment (PPE) and vaccines. IFC will also focus on providing much needed liquidity to private sector companies in the region.

Focus on South Asia

“The impact of the pandemic coupled with the region’s vulnerability to climate change, has highlighted the need for a collaborative, resilient and climate friendly recovery that can withstand future shocks. This is especially important for South Asia, which is home to three of the top five countries in terms of vulnerability to climate change globally,” said Hector Gomez Ang, IFC’s new Regional Director for South Asia.

While South Asia is one of the fastest growing regions in the world, estimates suggest that climate impacts could reduce its annual gross domestic product by an average of 1.8% by 2050, rising to 8.8% by 2100 if the countries fail to take adequate measures.