6.2 Ownership and management
6.3 IFC's Objectives
6.4 Funds of IFC
6.5 IFC’S Strategic Focus
6.6 Financial Products & Advisory services of IFC
6.6.1 Financial Services
6.6.2 Advisory Services
6.7 Project Cycle
6.9 Practice Questions
6.10 Suggested Readings
After reading this chapter the students should be able to:
1. know what is IFC.
2. understand its management and funding.
3. understand its main activities.
The International Finance Corporation (IFC) is one of the world bank group institution was set up in 1956 to promotes sustainable private sector investment in developing countries as a way to reduce poverty and improve people's lives. IFC is a member of the World Bank Group and is headquartered in Washington, DC. It shares the primary objective of all World Bank Group institutions: to improve the quality of the lives of people in its developing member countries. IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. It promotes sustainable private sector development primarily by: 1. Financing private sector projects and companies located in the developing world. 2. Helping private companies in the developing world mobilize financing in international financial markets. 3. Providing advice and technical assistance to businesses and governments. IFC's mandate is to promote sustainable economic development through the private sector. IFC pursues this goal through innovative solutions to the challenges of development, as it invest in companies and financial institutions in emerging markets. IFC considers positive developmental impact an integral part of good business, and focus much of its effort on the countries with the greatest need for investment. IFC recognize that economic growth is sustainable only if it is environmentally and socially sound and helps improve the quality of life for those living in developing countries.
6.2 OWNERSHIP AND MANAGEMENT
IFC has 182 member countries. To join IFC, a country must:
•Be a member of the World Bank (IBRD);
•Have signed IFC's Articles of Agreement; and
•Have deposited with the World Bank Group's Corporate Secretariat an Instrument of Acceptance of IFC's Articles of Agreement.
These member countries, collectively determine its policies and approve investments.. IFC's corporate powers are vested in its Board of Governors, to which member countries appoint representatives. IFC's share capital, which is paid in, is provided by its member countries, and voting is in proportion to the number of shares held. IFC's authorized capital (the sums contributed by its members over the years) is $2.45 billion; IFC's net worth (which includes authorized capital and retained earnings) was $9.8 billion as of June 2005. The Board of Governors delegates many of its powers to the Board of Directors, which is composed of the Executive Directors of the IBRD, and which represents IFC's member countries. The Board of Directors reviews all projects. The President of the World Bank Group also serves as IFC's president. IFC's CEO and Executive Vice President,is responsible for the overall management of day-to-day operations. Although IFC coordinates its activities in many areas with the other institutions in the World Bank Group, IFC generally operates independently as it is legally and financially autonomous with its own Articles of Agreement, share capital, management and staff. IFC's member countries, through a Board of Governors and a Board of Directors, guide IFC's programs and activities. Each country appoints one governor and one alternate. IFC corporate powers are vested in the Board of Governors, which delegates most powers to a board of 24 directors. Voting power on issues brought before them is weighted according to the share...