International Finance Corporation IFC branch of World Bank

International Finance Corporation is one of the branches of World Bank Group that provides equity capital to private organizations without guarantee from any State. International Finance Corporation, also known as IFC was established in July 1956 and became a specialized agency of the United Nations on 20th February 1957. This corporation is different from other branches and agencies of United Nations as it is a separate legal entity being a corporation which means its funds too are not under the jurisdiction of United Nations. Where International Bank of Reconstruction and Development and International Development Association fund the union governments of states, International Finance Corporations aims to fund the private sector players of its member states especially the poor ones. IFC is governed by its Board of Directors which involves representation from each member country which happens once a year. IFC has 25 executive directors that are elected amongst the Board of Directors who meet regularly and manage the corporation. Executive board takes care of daily operations and working of IFC under the leadership and management of President of the World Bank Group. IFC being a corporation has a Chief Executive Officer that oversees the management and daily operations. CEO of IFC is appointed by President of World Bank Group. IFC has its own Articles of Agreement which is for internal management of the corporation.

The IFC's investment services consist of loans, equity, trade finance, syndicated loans, structured and securitized finance, client risk management services, treasury services, and liquidity management. In its fiscal year 2010, the IFC invested $12.7 billion in 528 projects across 103 countries. Of that total investment commitment, approximately 39% ($4.9 billion) was invested in 255 ventures across 58 member nations of the IDA.

The IFC gives loans to businesses and private projects generally with maturities of 7 to 12 years. It determines an appropriate repayment timetable and grace period for every loan separately to meet borrowers' currency and cash flow obligations. The IFC may provide longer-term loans or extend grace periods if a project is deemed to warrant it.[19] Leasing companies and financial intermediaries are also allowed to receive loans from it.

Though loans have customarily been denominated in hard currencies, the IFC has endeavoured to make-up loan products in local currencies. Its disbursement portfolio included loans denominated in 25 local currencies in 2010, and 45 local currencies in 2011, funded largely through swap markets. Local financial markets development is one of IFC's strategic focus areas. In line with its AAA rating, it has strict concentration, liquidity, asset-liability and other policies. The IFC committed to approximately $5.7 billion in new loans in 2010, and $5 billion in 2011. This corporation has changed many lives and has been committed to its goal of private sector development and poverty reduction. Helping the private sector is a huge goodwill as these businesses with the support of IFC generate huge employment opportunities in their native countries and contribute to overall GDP of the nation. This works very well for developing nations where ease of doing business ranking is not that satisfactory and governments cannot do much to help micro, small and medium enterprises. Creating markets in places with less opportunity is a hectic task for any developing country and in this case, a foreign load or grant is always a win-win for the government as well as private sector. Over the past decades, IFC has learned to analyse the situation of each member and to decide perfectly on resource allocation for each member.

In addition to the investment services the IFC gives a wide range of advisory services to support corporate decision making regarding business, environment, social impact, and sustainability. Advisory service from experts ensures proper utilisation of funds. The IFC's corporate advice targets governance, managerial capacity, scalability, and corporate responsibility. It prioritizes the encouragement of reforms that improve the trade friendliness and ease of doing business in an effort to advise countries on fostering a suitable investment climate. It also offers advice to governments on infrastructure development and public-private partnerships. The IFC attempts to guide businesses toward more sustainable practices particularly with regards to having good governance, supporting women in business, and proactively combating climate change and other social challenges of the modern era that have to be fulfilled along with business.