Definition

International Financial Corporation (IFC)

In 1956 the International financial corporation (IFC) was established to promote private enterprise within countries. Composed of a number of member nations, the IFC works to promote economic development through the private rather than the government sector. It not only provides loans to corporations but also purchases stock, thereby becoming part owner in some cases rather than just a creditor. The IFC typically provides 10 to 15 percent of the necessary funds in the private enterprise projects in which it invests, and the remainder of the project must be financed through other sources. Thus, the IFC acts as a catalyst, as opposed to a sole supporter, for private enterprise development projects. It traditionally has obtained financing from the World Bank but can borrow in the international financial markets.

Share it:  Cite

More from this Section

  • Assignments
    Assignments is a form of loan sale in which ownership of a loan is transferred to the ...
  • Ratio percentage test
    Ratio percentage test is a test that a qualified pension plan must meet to receive favorable ...
  • Forward exchange rate
    Forward exchange rate is the exchange rate for a forward transaction. ...
  • Hypothecation
    In case of hypothecation, possession of goods is not given to the bank. The goods remain ...
  • Central Bank
    A central bank is an semi-independent autonomous government institution that conducts ...