First, although priority to frontier markets has led to increases in IFC investments in International Development Association (IDA) countries, these investments need to be allocated in more than the few IDA countries 
where they are currently concentrated. Second, IFC investments in targeted sectors need to expand beyond financial markets where trade finance has contributed most to expansion. Third, IFC needs to continue to strengthen its partnership with the World Bank to enhance its poverty focus and results.

IFC’s interventions are designed to contribute to growth, although it has been challenging for the Corporation to integrate distributional aspects in projects. Fewer than half the projects reviewed included evidence of poverty 
and distributional aspects in project design, although the lack of such evidence does not necessarily rule out actual poverty impacts. Projects that paid attention to these aspects performed as well as, if not better than, 
other projects on development and investment outcomes. This suggests that poverty focus need not come at 
the expense of financial success. A broad range of IFC’s interventions can therefore be simultaneously 
pro-growth and pro-poor, but this link is neither universal nor automatic. A project’s poverty focus is positively associated with the development orientation of partners, a link with World Bank Group country strategies, and alignment of investment and advisory services.

Most IFC investment projects generate satisfactory economic returns but do not provide evidence of identifiable opportunities for the poor. The relatively high proportion of projects that do not generate such identifiable opportunities suggests a primary reliance in operations on the pace of growth for poverty reduction at a time 
when the institution’s strategies point more attention to the pattern of growth that it supports. Greater effort is needed in translating the strategic intentions into actions in investment operations and advisory services to enhance IFC’s poverty focus.

Recommendations

(i) sharpen the shared understanding of poverty and poverty impact within the IFC context and 
guide staff on how to operationalize poverty focus;

(ii) adopt more nuanced concepts of poverty when defining frontier regions in middle-income countries;

(iii) establish a consultative framework that includes the participation of relevant networks of the 
World Bank Group and partner organizations to deepen understanding and develop innovative approaches 
to poverty reduction;

(iv) make explicit in its interventions the underlying assumptions about how projects can contribute 
to growth and the pattern of growth in a way to provide opportunities for the poor, and periodically test 
these assumptions through select in-depth evaluations;

(v) define ex ante, then monitor and report on poverty reduction outcomes;

(vi) provide technical support and advice to help develop the capacity of willing clients to track, assess, 
and report the impacts of their interventions on identified beneficiary groups.