Examine the working of International Finance Corporation.
Ans. IFC was established in 1950.
IFC aims at giving financial support to private enterprises of member countries to promote the rate of economic growth in less developed countries.
Its aim was to give financial assistance to private enterprises because IBRD gives loans only to member countries’ government or with the guarantee of member country government.
Board of governors of IBRD acted as Board of governors of
IFC also. But it has a separate legal identity.
It gives long-term loans and participates by subscribing for the shares of the company.
IFC promotes economic viable projects which are beneficial for the economy. Its investment is not more than 40% of total investment in debt form and 25% of equity.
Interest is charged differently depending on particulars of the case.
IFC gets funds from capital contributed by its members. It can float its loans in world debt market. It can also take help from IBRD.
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