PANDIT JAWAHARLAL NEHRU COLLEGE OF AGRICULTURE AND

RESEARCH INSTITUTE, Karaikal

DEPARTMENT OF AGRICULTURAL ECONOMICS AND EXTENSION

INTERNATIONAL ECONOMICS (1+1)

COURSE TEACHER:Dr. K. S. KUMARAVEL

TOPIC
INTERNATIONAL FINANCE CORPORATION (IFC)
PRESENTED BY
TAMILARASU. M
 International Finance Corporation
 It is one of the institution of World Bank
 It was established in 1956
 A country must first be member of IBRD to join

IFC
 It has 184 member countries
 It's a corporation where shareholders are member governments that provide
paid-up capital and consists of 25 executive directors
Headquarter - Washington DC
What services do International finance Corporation offer?
 IFC provides a wide range of investment and advisory
services that help businesses and entrepreneurs in the
developing world meet the challenges they face in the
marketplace.

IFC offers
 Innovative financial products to private sector projects in
developing countries.
Objectives of IFC
 It makes investments in productive private enterprises in association with private
investors.
 It concentrates on areas where sufficient private capital is not forthcoming on
reasonable terms and conditions.
 It acts as a clearing house for bringing together investment opportunities, private
capital and the experienced management.
 It stimulates the International flow of capital.

 It assists the development of capital markets in less developed countries.

 It encourages private sector activity in developing countries through
three types of activities.

1) Private sector project financing

2) Helping companies in the developing world to mobilize financing in the

international financial markets

3) Providing guidance and technical assistance to business and

governments.
Investment policies of the IFC

1. The IFC does not invest in projects in the advanced countries.

2. The IFC assists in the fields of manufacturing, mining and processing.

3. The local entrepreneurs should contribute at least 50% of the total cost of
the project

4. The credit period is normally 5 to 15 years.

5. The rate of interest is negotiable depending upon the degree of risks

involved and other terms and conditions of investments.

6. The IFC evaluates projects on the basis of profitability.

7. The IFC has the option of converting loans into capital stock of project and appoints
its members on the Board of Directors of the borrowing country.

8. It has the right to dispose of capital stock at any time and to any party.

9. The IFC would give credit only to those enterprises which have experienced and
competent management.

10. Project financing is done without requiring any guarantee from the borrowing
country.

11. The IFC is to supplement and not to compete with private

capital.

12. The IFC acts as a catalyst. It motivates inflow of capital from institutions which
would not invest without IFC's involvements.
Membership and capital resources of IFC

¤ The membership of the IFC is open to all the member countries of the World
Bank. The management of the IFC is similar to that of the World Bank.

¤ The member countries in the IFC are represented by the Governors and Executive
Directors of the World Bank. The president of the World Bank acts as the
chairman of the Board of Director

¤ The Board of Directors of the IFC appoints its president on the recommendation
of the chairman.

¤ Though IFC maintains a separate identity of its own, its activities are fully
controlled by the World Bank authorities.
Makhtar Diop -IFC's Managing Director.
IFC and Developing Countries
 The IFC gives financial assistance to private enterprises in developing countries.
It helps them in reducing the capital burden and also foreign exchange shortages.
 By the end of June of 1971, IFC's investments in 172 projects in 47 developing
countries aggregated to 577.8 million US Dollars.
 By June 1975, it had risen to 1262 million US Dollars. The IFC concentrated on
the development of iron and steel, cement, paper, textile, chemicals and other
allied industries.
 The United States contributed 48% of the total amount disbursed by the IFC, till
june 1975. Likewise, the contributions from Japan, and EEC were 23% and 11%
respectively. About 15% of the funds disbursed represented IFC's own resources.
IFC and Developing Countries

As on 30th June 1993, the IFC provided an assistance of 2.1 billion dollars to 185
private sector projects in 54 developing countries. It market an increase of 20% over the
previous year.
The total cost of the project assisted by the IFC.
According to the IFC, Asia holds good prospects in natural resource-based
industries.
The IFC's engineering wing provides technical advice to government institutes and
small enterprises in preparing feasibility reports.
It also helps in the small scale sector in raising funds.
Is India member of World Bank

India is a member of four of the five constituents of the World Bank

Group , International Bar Reconstruction and Development (IBRD),

International Development Association (IDA), International Finance

Corporation (IFC) and Multilateral Investment Guarantee Agency

(MIGA)
IFC: India's Partner Since 1958

 IFC has committed over $15 billion in India since its first investment in 1958.

 Investments are spread over 215 clients in India.

 India is IFC's single largest country exposure globally, IFC's largest advisory
client and regional hub for South Asia.

 IFC's India exposure is evenly spread across important sectors in

infrastructure, financial inclusion, and logistics
 INVESTMENT
 IFC is an active issuer of ESG bonds also known as Socially Responsible
Investments. A subset of our loan portfolio is funded through our established 
Green Bond program which finances climate friendly projects and our 
Social Bond Program which finances projects that aim to alleviate social
issues.
 Over 10 billion dollar has issued on Green bonds across the globe.
 IFC investments in the telecommunications, media, and technology

sector surpassed the $1 billion mark, totaling $1.3 billion and representing

a five-fold increase in digital infrastructure commitments over the past five

years.
Figures estimate development impact of our client
investments in 2021

•62.5 MILLION
•PEOPLE CONNECTED TO THE INTERNET

•11.3 MILLION
•PEOPLE SUPPLIED WITH POWER

•$226.5 BILLION
•IN TRADE-FINANCE VOLUME

•$516.9 BILLION
•IN IMPACT FROM SME LOANS
 REFERENCE

 https://www.ifc.org
Thank you…