International Finance Corporation

IFC was established in 1956 with the specific purpose of extending the finance support to private enterprises. It is an affiliate of IBRD. The Articles of agreement of IFC are similar to that of the World Bank. A country has to be a member of the World Bank in order to join the IFC. In June 1996 it had 181 members. The IFC can borrow from the World Bank four times its subscribed capital and surpluses. It can also borrow from the International money market. The purpose of the IFC is to further the economic development by encouraging growth of private enterprise in member countries, particularly in the less developed areas, thus supplementing the activities of the IBRD. The IFC, therefore

• Invests in private enterprise in member countries, in association with the private investors and without government guarantee, in cases where sufficient private capital is not available on reasonable terms.
• To bring together investment opportunities private capital of both foreign and domestic origin, and experienced management and.
• Stimulates condition conducive to his flow of private capital, domestic and foreign, into productive investment in member countries.

The IFC had a slow beginning and much of its assistance was concentrated in Latin and Central American Countries. But in recent years it has diversified its area of operations and many developing countries stand benefited. India has also received substantial assistance from IFC. The activities were:

• Project identification and promotion
• It helps the member countries to establish, and improve privately owned development finance companies and other institutions which are themselves engaged in grounding and financing private enterprise.
• Encouraging the growth of capital markets in the developing countries. Thus it does by a) providing support to financial institutions in developing countries to meet their investment needs and b) by promoting his investors in developed countries to participate in these capital markets.
• Giving advice and technical counsel to developing countries in measure that will create a climate conducive to growth of private investment.