International Finance Corporation IFC
International Finance Corporation (IFC)
an affiliate of the International Bank for Reconstruction and Development (the World Bank).
The IFC was formed in July 1956 for capital investment in the private sector of developing member countries either through crediting enterprises (74 percent of IFC capital) or through the direct purchase of stock (26 percent). Investments go primarily to profit-making enterprises. In 1973 the corporation had 100 member countries. The IFC does not require state guarantees, but stipulates that 50 percent of the capital needed to finance projects must be local or foreign private capital. Credit is granted for periods extending from five to 15 years, and the rates of interest range from 5 to 10 percent annually.
The IFC is managed by the governing bodies of the World Bank. In mid-1973 the statutory capital of the IFC reached $110 million, $107 million of which was in gold and freely convertible currencies. The sum of each country’s subscription is proportional to its participation in World Bank capital. This gives the United States a plurality of votes (about one-third). The IFC has a reserve fund formed from profits (in mid-1973 it was $76 million). The credits given by the World Bank to the IFC totaled $297 million by mid-1973; $104 million of this amount had been used. The IFC issues its own bonds and puts them on the capital market and resells stock and credit obligations.
By mid-1973 the total investments of the IFC reached $848 million (in 203 enterprises in 51 countries); the total cost of the projects (including private investments) was $4.3 billion. Indebtedness for IFC credits and investments was $368 million in mid-1973.
E. D. ZOLOTARENKO