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

  • Letter of Credit (L/C)
    A letter of credit, abbreviated L/C, is a bank’s conditional promise to pay issued ...
  • Points
    Points— a “point” is the smallest unit of price change quoted, given a conventional ...
  • Consequential loss
    Consequential loss means financial loss occurring as the consequence of some other loss. ...
  • Overdraft on Current Account
    An overdraft allows to borrow money for a short period of time through current account. ...
  • Head and Counter Credits
    Back to Back Credits or Head and Counter Credits is a documentary credit (counter) taken ...