View this brief overview of the findings of IEG's evaluation, which assesses how the IFC has implemented its strategic approach to client engagement since the early 2000s, and its effects on IFC's clients and the development impact of its operations.

1. IFC’s Approach to Engaging Clients
for Increased Development Impact
Hiroyuki Hatashima
Stephan Wegner
May 22, 2018
Independent Evaluation Group

2. 2
Main takeaways
Engaging with clients is a relevant response to IFC’s changing
operating environment
IFC has only partially implemented its elements of the client
engagement approach
Projects with strategic clients are associated with better
development results – driven by client quality
Key objectives of the client approach have not been achieved:
quality and volume of investments including in priority areas;
business efficiency goals
Highly relevant to development needs but little systematic
attention.
1. Relevant
adaptation
2. Partial
implementation
3. Impact
4. Quality and
growth
5. Upstream
initiatives

3. Today’s presentation
│ Context and
scope of the
evaluation
│ How well has IFC
implemented its
strategic
approach to client
engagement?
│ Main findings
3Independent Evaluation Group
│ Recommendations

4. │ Context and Scope of the Evaluation

5. IFC introduced strategic engagement with clients as a
priority in the early 2000s
 Transform IFC from a
transaction-focused to a
relationship-based
organization
 Work with strategic clients to
increase IFC’s and clients’
development impact and
business efficiency
The evaluation assesses how effective IFC has been
in its approaches to client engagement

6. IEG reviewed
three types of
client
engagement
6Independent Evaluation Group
1. Client-focused partnerships
(e.g., long-term partnerships with
AKFED, ECOM)
2. Upstream and programmatic
interventions (e.g.,
InfraVentures, Lighting Africa)
3. Country-focused engagements
(e.g., joint implementation plans:
Myanmar power sector)

7. │ How well has IFC implemented its strategic
approach?

8. Partial
implementation
of approach
means goal of
transforming
IFC not
achieved
8Independent Evaluation Group
• IFC’s evolving approach was
comprehensive in design and relevant
to supporting increased development
impact
• IFC has become more client oriented
over the past decade
• But it only partially implemented the
approach to client engagement (e.g.,
client segmentation)
• Thus, the goal of transforming IFC to a
client-focused institution has not been
achieved.

9. Repeat clients account for a significant share of IFC’s
business volume
IFC MIS, FY04-16

10. Most IFIs and
the private
sector have a
strong focus on
clients
10Independent Evaluation Group
Comparators
• Implement client engagement
approaches to differing degrees
• Differentiate between strategic clients
and sources of repeat business
• Deploy a tier structure for clients with
more varied treatment in terms of
access to senior staff, resources and
product offerings
• Commercial banks reflect substantial
client differentiation, including in
pricing and special conditions. However,
some practices may be at odds with
IFC’s development mandate

11. │ Main findings

12. • IFC’s approach is a relevant and timely
adaptation to a changing world with more
players in the private sector development
space
• Although only partially implemented, the
approach has made IFC more client-
oriented, with tangible effects on IFC’s
behavior and performance
Client engagement is a relevant
adaptation to a changing world

13. Repeatclientsandlong-
termpartnersperform
morestrongly
BetteroutcomesinIFC
strategicpriorities
(IDA,FCS)
Therefore,afuller
implementationofthe
clientapproachcould
yieldenhancedresults
IFC projects with strategic clients are associated with
better development results
Countries

14. Thesuperior
performanceisduetoa
selectioneffect
(ratherthanlearningon
thepartoftheclient).
Thiseffectisbasedon
clientqualityand
strategicfit,combined
withIFC’sfinancialand
nonfinancial
additionality
14Independent Evaluation Group
Better performance is due to a selection effect rather
than learning
SEQUENCE

15. • No sustained increase
in business volume
• Deteriorating portfolio
quality
• Strategic clients did
not drive growth in
priority areas (IDA,
FCS)
• Limited ability to
influence clients’
capacities and
development
orientation
Key objectives of the client engagement approach
have not been achieved
0.59
2.94
1.01
2.52
-
1.00
2.00
3.00
4.00
5.00
6.00
2004-6 2014-16
US$billion
One off Repeat
0.25 1.24
-
1.00
2.00
3.00
4.00
5.00
6.00
2004-6 2014-16
FCS
Long-term Partnership
Business volume in IDA countries
Business volume in FCS countries
0.05 0.31
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
0.16
1.02
0.40
0.41
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
2004-6 2014-16

16. Client engagement approach has had limited effect on
business efficiency
Lack of progress on:
• Response times
• Streamlining
procedures
• Client satisfaction
IFC
Average
395

17. Client relationships
have a lifecycle
IFC’s role evolves during client relationships, but little
evidence of incremental additionality in repeat projects
• Additionality is the key
motivator for clients’
engagement with IFC
• While additionality was stronger
with strategic clients -- little
evidence of incremental
additionality in repeat projects

18.  Highly relevant to client needs
 … but with mixed results
 Not mainstreamed within IFC
 Interventions are complex, resource intensive,
and higher risk -- indicating challenges in
operationalizing IFC 3.0 and the creating markets
agenda
 Internal factors constrain mainstreaming
(incentives, culture, ad hoc nature of initiatives,
resources, cross cutting teams, organizational
silos)
IFC has undertaken numerous
upstream initiatives-- but little
systematic attention

19. There is a “missing
middle”between
policy reforms and
country
diagnostics, and
identifyingand
developing projects
Country-level interventions provide a platform for
upstream client engagement but are at early stages
• Joint Implementation Plans have potential
to address binding constraints and
increase investments in high-risk
environments
• Too early to assess effectiveness – no
evidence of shift in IFC’s portfolio
• Key enablers: strong relationships in the
field to adapt projects to country contexts;
alignment of incentives and resources for
collaborative engagements
• Key challenge: political and security
environments and low human and
institutional capacities in JIP countries

20. │ Recommendations

21. Systematic
approach
IFC needs to systematically implement the
strategic approach to client engagement
focusing on areas where implementation has
lagged
Client management
Upstream
Engagement
IFC needs to strengthen client relationship
management to improve the pipeline of new
strategic clients
IFC needs to enhance its capacity for upstream
engagement on projects in order to increase the
number and quality of strategic clients. This
means focusing on management commitment,
accountability, and incentives

22. Thank you!
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