Powering private sector job creation
Six hundred million is a staggering number. Yet, that's how many new jobs the world needs by 2020 just to keep up with its surging population. And about two-thirds of those jobs need to be created in Asia - that's some 25 million jobs a year.
Globally, about 200 million people are unemployed, the majority of them women and young people living in developing countries. Without jobs, they can't care for themselves or their families. The result: poverty and social and economic unrest.
Joblessness is a global crisis and a top priority for policymakers and the International Finance Corporation, the World Bank Group member focused on private sector development.
In China for example, the IFC has been helping the country generate jobs through its investments and advisory services for the past two decades. China is now our third-largest client and we have an outstanding portfolio of $2.5 billion in more than 100 Chinese companies. Last year, these companies created around 600,000 jobs across China in sectors such as manufacturing, infrastructure and financial markets.
According to a jobs study released by the IFC in January, micro, small and medium-sized enterprises generate the most jobs in developing countries, but they are also less productive, pay less, and do not offer as many training and development opportunities for staff. What they need is financing and other assistance to grow their businesses and realize their full potential.
One way the IFC helps these smaller enterprises is by funding the financial intermediaries. In China, financial institutions supported by the IFC provided financing to nearly 1 million smaller enterprises last year. Globally, the IFC helped finance 23 million micro, small and medium-sized enterprises, which in turn employed more than 100 million people in emerging markets.
The story of entrepreneur Zhang Yan in China's western province of Sichuan shows how small loans can make a big difference in helping micro-enterprises get off the ground and create employment for the jobless.
