The World Bank Group has helped mobilise $36 billion in private capital for development projects in India over the past four years, including $9.6 billion for micro, small and medium enterprises (MSMEs), as it steps up efforts to promote private sector-led growth and job creation.
Private capital mobilisation by the group rose nearly five-fold to $14.5 billion in fiscal 2026 from around $3 billion in fiscal 2022, Manuel Reyes-Retana, division director for South Asia at the International Finance Corporation (IFC), said.
The increase reflects growing investor interest in development-linked investments, with guarantees from the IFC and the Multilateral Investment Guarantee Agency (MIGA) helping reduce risks and attract private funding, he 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,” Reyes-Retana told PTI.
Private capital mobilisation involves bringing private investors into development projects alongside public funding. Guarantees and other risk-sharing mechanisms help reduce investment risks, making projects more attractive to investors.
The World Bank Group has also supported initiatives to improve access to finance for India's MSMEs, which play a significant role in employment and economic activity but often face difficulties in securing affordable credit.
Under the $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 enables businesses to raise funds against unpaid invoices instead of waiting for buyers to settle payments.
The initiative has helped more than 250,000 MSMEs access capital faster, while 30 non-banking financial companies (NBFCs) have joined the platform, widening the pool of lenders, according to the World Bank Group.
Credit guarantees for women-owned businesses increased to 18% from 14% over two years, mobilising more than $1 billion, the group said. India's first Green MSME Guarantee Fund has benefited more than 4,000 MSMEs and supported $40 million in investments in green and circular-economy activities.
These initiatives form part of the World Bank Group's broader partnership with India to promote employment-intensive, private sector-led growth and support the country's ambition to become an upper-middle-income economy over the next decade.
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.
Reyes-Retana said institutional investors were increasingly attracted to investments backed by World Bank Group guarantees because of their familiarity with the group's underwriting standards and governance practices.
The group seeks to bridge government development priorities and private investment by strengthening markets, structuring viable projects and reducing risks through financing, guarantees and partnerships, he added.