financial institution that offers investment, advisory, and asset
management services to encourage private sector development in
developing countries. The IFC is a member of the World Bank Group and
is headquartered in Washington, D.C., United States. It was
established in 1956 as the private sector arm of the World Bank Group
to advance economic development by investing in strictly for-profit
and commercial projects that purport to reduce poverty and promote
development.The IFC's stated aim is to create opportunities for people
to escape poverty and achieve better living standards by mobilizing
financial resources for private enterprise, promoting accessible and
competitive markets, supporting businesses and other private sector
entities, and creating jobs and delivering necessary services to those
who are poverty-stricken or otherwise vulnerable. Since 2009, the IFC
has focused on a set of development goals that its projects are
expected to target. Its goals are to increase sustainable agriculture
opportunities, improve health and education, increase access to
financing for microfinance and business clients, advance
infrastructure, help small businesses grow revenues, and invest in
climate health.
The IFC is owned and governed by its member countries, but has its own
executive leadership and staff that conduct its normal business
operations. It is a corporation whose shareholders are member
governments that provide paid-in capital and which have the right to
vote on its matters. Originally more financially integrated with the
World Bank Group, the IFC was established separately and eventually
became authorized to operate as a financially autonomous entity and
make independent investment decisions. It offers an array of debt and
equity financing services and helps companies face their risk
exposures, while refraining from participating in a management
capacity. The corporation also offers advice to companies on making
decisions, evaluating their impact on the environment and society, and
being responsible. It advises governments on building infrastructure
and partnerships to further support private sector development.
The corporation is assessed by an independent evaluator each year. In
2011, its evaluation report recognized that its investments performed
well and reduced poverty, but recommended that the corporation define
poverty and expected outcomes more explicitly to better-understand its
effectiveness and approach poverty reduction more strategically. The
corporation's total investments in 2011 amounted to $18.66 billion. It
committed $820 million to advisory services for 642 projects in 2011,
and held $24.5 billion worth of liquid assets. The IFC is in good
financial standing and received the highest ratings from two
independent credit rating agencies in 2010 and 2011.
The World Bank and International Monetary Fund were designed by
delegates at the Bretton Woods conference in 1944 and the World Bank,
then consisting of only the International Bank for Reconstruction and
Development, became operational in 1946. Robert L. Garner joined the
World Bank in 1947 as a senior executive and expressed his view that
private business could play an important role in international
development. In 1950, Garner and his colleagues proposed establishing
a new institution for the purpose of making private investments in the
developing countries served by the Bank. The U.S. government
encouraged the idea of an international corporation working in tandem
with the World Bank to invest in private enterprises without accepting
guarantees from governments, without managing those enterprises, and
by collaborating with third party investors. When describing the IFC
in 1955, World Bank President Eugene R. Black said that the IFC would
only invest in private firms, rather than make loans to governments,
and it would not manage the projects in which it invests. In 1956 the
International Finance Corporation became operational under the
leadership of Garner. It initially had 12 staff members and $100
million ($844.9 million in 2012 dollars in capital. The corporation
made its inaugural investment in 1957 by making a $2 million ($16.4
million in 2012 dollars loan to a Brazil-based affiliate of Siemens &
Halske (now Siemens AG). In 2007, IFC bought 18% stake in the Indian
Financial firm, Angel Broking.
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