HISTORY

The International Finance Corporation (IFC) was established in 1956 by the World Bank
Group to promote private sector investment in developing countries. The IFC was
created as a separate entity from the World Bank to focus on the specific needs of the
private sector, including small and medium-sized enterprises (SMEs) and investments in
areas such as infrastructure, agribusiness, and manufacturing.

The idea for the IFC was first proposed by Eugene Black, who was then the President of
the World Bank. Black recognized that private sector investment was critical to the
economic development of developing countries, but that there was a lack of capital
available for such investment. The IFC was created to address this gap by providing
financing, advisory services, and technical assistance to private sector companies in
developing countries.

The IFC's initial capital was provided by its member countries, which included both
developed and developing nations. The United States was the largest contributor,
followed by the United Kingdom, Japan, and Germany. Over the years, the IFC's capital
base has grown significantly, and it has also raised funds from private investors and
financial markets.

In its early years, the IFC focused primarily on providing loans to private sector
companies in developing countries. However, it soon expanded its operations to include
equity investments, guarantees, and other financial products. It also began to provide
advisory services and technical assistance to help companies improve their operations
and become more competitive.

One of the IFC's early successes was its investment in the Mexican cement company,
CEMEX, in the 1960s. The IFC's investment helped CEMEX expand its operations and
become a global leader in the cement industry. This investment demonstrated the
potential for private sector investment to drive economic development in developing
countries.

Over the years, the IFC has continued to expand its operations and has invested in a
wide range of industries, including banking, telecommunications, healthcare, and
renewable energy. It has also expanded its reach to include the poorest and most fragile
countries, where private sector investment is often scarce.

Today, the IFC is one of the largest financiers of private sector development in the
world, with a portfolio of investments and advisory services in more than 100 countries.
Its mission is to promote sustainable economic growth, create jobs, and reduce poverty
in developing countries by catalyzing private sector investment.
OBJECTIVES OF IFC

The International Finance Corporation (IFC) has the following aims and objectives:

1. Promote private sector investment in developing countries: The IFC was

established to address the gap in private sector investment in developing
countries. Its primary aim is to promote investment by providing financing,
advisory services, and technical assistance to private sector companies in these
countries.
2. Support sustainable economic growth: The IFC aims to support sustainable
economic growth in developing countries by investing in projects that have a
positive impact on the environment and society. It seeks to create jobs and
opportunities for local communities, promote innovation, and foster
entrepreneurship.
3. Reduce poverty: The IFC aims to reduce poverty in developing countries by
promoting inclusive economic growth. It seeks to provide financing and advisory
services to small and medium-sized enterprises (SMEs), which are often the main
drivers of economic growth in developing countries.
4. Mobilize private sector capital: The IFC aims to mobilize private sector capital by
partnering with local and international investors. It seeks to leverage its expertise
and networks to attract private sector investment to developing countries and
create opportunities for local businesses.
5. Improve the business environment: The IFC aims to improve the business
environment in developing countries by providing advisory services and technical
assistance to governments and private sector companies. It seeks to promote
good governance, transparency, and accountability, and create a level playing
field for businesses.
6. Promote innovation: The IFC aims to promote innovation in developing countries
by investing in technology and new business models. It seeks to identify and
support innovative entrepreneurs and businesses that have the potential to
create new markets and transform industries.
ACHIEVEMENTS OF IFC

The International Finance Corporation (IFC) has achieved a number of significant

accomplishments since its establishment in 1956. Some of the key achievements of the
IFC include:
 1. Mobilizing private sector investment: The IFC has played a critical role in
mobilizing private sector investment in developing countries. As of 2021, the IFC's
investments have helped mobilize over $6.3 billion in additional private sector
funding.
2. Promoting job creation: The IFC's investments and advisory services have helped
create millions of jobs in developing countries. In 2020 alone, the IFC's
investments supported the creation of over 1.5 million jobs.
3. Supporting women entrepreneurs: The IFC has made significant efforts to
support women entrepreneurs in developing countries. As of 2021, the IFC had
invested over $8.5 billion in women-led businesses and projects.
4. Advancing renewable energy: The IFC has been a leader in advancing renewable
energy in developing countries. As of 2021, the IFC had invested over $25 billion
in renewable energy projects, which had the potential to reduce carbon dioxide
emissions by over 300 million tons per year.
5. Improving access to finance: The IFC has helped improve access to finance for
small and medium-sized enterprises (SMEs) in developing countries. In 2020
alone, the IFC provided $3.3 billion in financing to SMEs, which helped create jobs
and support economic growth.
6. Supporting economic reform: The IFC has played a critical role in supporting
economic reform in developing countries. It has provided advisory services and
technical assistance to governments and businesses to improve the business
environment, promote good governance, and create a level playing field for
businesses.
7. Promoting sustainability: The IFC has made significant efforts to promote
sustainability in its investments and advisory services. As of 2021, the IFC had
invested over $21 billion in climate-related projects and had supported the
development of over 4,000 megawatts of renewable energy capacity
FAILURES OF IFC

The International Finance Corporation (IFC) is the private sector arm of the World Bank
Group and provides financing and advisory services to promote private sector
development in developing countries. While the IFC has had many successes in
supporting private sector growth, there have also been failures and criticisms of its
activities.

Some of the failures of the IFC include:

1. Environmental and social impacts: The IFC has been criticized for funding projects
that have negative environmental and social impacts, such as the destruction of
ecosystems, displacement of communities, and exploitation of workers. For
 example, the IFC has been accused of funding a coal-fired power plant in India
that led to pollution and health problems for local communities.
2. Lack of transparency and accountability: The IFC has been criticized for lacking
transparency in its decision-making processes and for not holding its clients
accountable for their actions. Critics have argued that the IFC has failed to ensure
that the projects it funds adhere to its own environmental and social standards.
3. Conflict of interest: The IFC has been accused of having a conflict of interest
because it both provides financing to private companies and is responsible for
enforcing environmental and social standards. This has led to concerns that the
IFC may prioritize its financial interests over its social and environmental
responsibilities.
4. Economic development: The IFC has been criticized for focusing too heavily on
economic growth and not enough on poverty reduction and social development.
Critics argue that the IFC's emphasis on economic growth has led to the
exploitation of workers and natural resources, as well as increased inequality.
5. Failure to achieve development outcomes: The IFC has been criticized for failing
to achieve its development objectives in some cases. For example, the IFC funded
a project in Honduras to develop palm oil plantations, but the project failed to
deliver the promised economic benefits and led to environmental damage and
land disputes.