From $3B To $14.5B: How World Bank Group Is Supercharging Private Investment in India

The World Bank Group has helped mobilise USD 36 billion in private capital for development in India over the past four years, including USD 9.6 billion for Micro, Small and Medium Enterprises (MSMEs), as it steps up efforts to spur private sector-led growth and job creation.

Private capital mobilisation by the Group rose nearly five-fold to USD 14.5 billion in fiscal 2026 from about USD 3 billion in fiscal 2022, Manuel Reyes-Retana, IFC's division director for South Asia, said.

The increase reflects growing investor interest in development-linked investments, with guarantees from the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) helping reduce investment risks and attract private funding, he said.

Institutional investors are increasingly drawn to such instruments because they are familiar with the World Bank Group's underwriting standards and governance practices, Reyes-Retana said.

"We are seeing a positive response from private sector investors and growing momentum in this area. Investors across the world, including in India, are increasingly looking to diversify their investment instruments and assets," he told PTI.

Private capital mobilisation involves attracting investment from private investors to finance development projects and supplement public funding. It enables development projects to tap private investment alongside public funding, with guarantees and other risk-sharing mechanisms helping make investments more attractive to investors.

The World Bank Group has also supported initiatives to improve access to finance for India's MSMEs, which play a key role in employment and economic activity but often face constraints in obtaining affordable credit.

Under the USD 436 million Raising and Accelerating MSME Performance (RAMP) programme, the World Bank supported reforms to the Trade Receivables Discounting System (TReDS), a digital platform that allows businesses to raise funds against unpaid invoices rather than wait for buyers to pay.

The initiative has helped more than 250,000 MSMEs gain faster access to capital, while 30 non-banking financial companies have joined the platform, expanding the pool of lenders, the World Bank Group said.

Credit guarantees for women-owned businesses rose to 18 per cent from 14 per cent over two years, mobilising more than USD 1 billion, it said. India's first Green MSME Guarantee Fund has benefited more than 4,000 MSMEs and supported USD 40 million in investments in green and circular-economy activities.

The efforts form part of the World Bank Group''s broader partnership with India to promote job-rich, private sector-led growth and support the country''s ambition to become an upper-middle-income economy over the next decade.

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Under its Country Partnership Framework for fiscal 2026-31, the Group is focusing on inclusive and sustainable growth in support of India''s Viksit Bharat vision for 2047.

"Institutional investors value these guarantees because they are familiar with the World Bank Group's underwriting standards and governance practices. As a result, these assets are increasingly sought after by institutional investors," he said.

The World Bank Group acts as a bridge between government development priorities and private investment by strengthening markets, structuring viable projects and reducing risks through financing, guarantees and partnerships, he said.  

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