FEDERAL URDU UNIVERSITY OF ARTS, SCIENCE AND TECHNOLOGY

International Financial Management

Submitted by:
JAWAD ALI RAY

MBA 4th (A)

INTERNATIONAL FINANCE CORPORATION

Contents
OVERVIEW: ................................................................................................................................................................... 1 IFC's Vision, Values, & Purpose: ..................................................................................................................................... 1 HISTORY: ....................................................................................................................................................................... 2 Six Decades of Creating Opportunity:........................................................................................................................... 2 ROOTS 1940s: ............................................................................................................................................................. 2 Bretton Woods Conference: ...................................................................................................................................... 2 World Bank Opens: .................................................................................................................................................. 2 Garner Arrives:......................................................................................................................................................... 2 CREATION 1950s: ...................................................................................................................................................... 2 The Idea of IFC: ....................................................................................................................................................... 2 Growing Support: ..................................................................................................................................................... 2 IFC Created: ............................................................................................................................................................. 2 21st century (Todays IFC): .............................................................................................................................................. 3 Sustainability Initiatives: .......................................................................................................................................... 3 Equator Principles: ................................................................................................................................................... 3 IDA Focus: ............................................................................................................................................................... 3 Member Countries: .......................................................................................................................................................... 3 Functions of IFC: ............................................................................................................................................................. 3 IFCs Working In Pakistan: .............................................................................................................................................. 4 Financial Crisis: IFC's Response : .................................................................................................................................... 4 References: ...................................................................................................................................................................... 5

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OVERVIEW:
The International Finance Corporation (IFC) promotes sustainable private sector investment in developing countries. IFC is a member of the World Bank Group and is headquartered in Washington, DC. It shares the primary objective of all World Bank Group institutions: to improve the quality of the lives of people in its developing member countries Established in 1956, IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. It promotes sustainable private sector development primarily by: 1. Financing private sector projects and companies located in the developing world. 2. Helping private companies in the developing world mobilize financing in international financial markets. 3. Providing advice and technical assistance to businesses and governments. Robert L. Garner presents the idea of such type of corporation while Lars H. Thunell is the present CEO of ICF.

IFC's Vision, Values, & Purpose:

Our vision: Is that people should have the opportunity to escape poverty and improve their lives. Our values: Are excellence, commitment, integrity, and teamwork. IFC's Purpose: Is to create opportunity for people to escape poverty and improve their lives by:
y y y y

Promoting open and competitive markets in developing countries Supporting companies and other private sector partners where there is a gap Helping generate productive jobs and deliver essential services to the underserved Catalyzing and mobilizing other sources of finance for private enterprise development

To achieve its Purpose, IFC offers development-impact solutions through firm-level interventions (direct investments, advisory services, and the IFC Asset Management Company); standard-setting; and business enabling environment work. Our Mission: IFC, as the private sector arm of the World Bank Group, shares its mission:

To fight poverty with passion and professionalism for lasting results. To help people help themselves and their environment by providing resources, sharing knowledge, building capacity, and forging partnerships in the public and private sectors.

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HISTORY:
Six Decades of Creating Opportunity:
A daring new idea when created in the 1950s, IFC is the largest organization of its kind in the world. A sense of innovation and the strength of our core corporate values--excellence, commitment, integrity and teamwork--have driven this remarkable growth over the years. Holding a $48.8 billion portfolio touching almost every major industry, we now reach millions of people in more than 100 countries, creating jobs, raising living standards, and building a better future.

ROOTS 1940s:
1944 Bretton Woods Conference: Delegates from 44 countries meet at Bretton Woods Conference, creating the World Bank and International Monetary Fund to transfer financial resources to member governments--but no separate entity for private sector development. 1946 World Bank Opens: The World Bank begins operations with 32 shareholding countries, $7.7 billion in capital, and headquarters in Washington, D.C. IFC has not yet been created. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. 1947 Garner Arrives: The driving force behind the future IFC, New York financier Robert L. Garner, joins the World Bank as one of its first senior executives. He brings a keen sense of the role private business can play in international development, a topic few others considered at the time.

CREATION 1950s:
1950 The Idea of IFC: Garner and colleagues suggest creating a new institution to stimulate private investment in the Bank's borrowing countries. "It was my firm conviction that the most promising future for the less developed countries was the establishing of good private industry," Garner said. 1951 Growing Support: The U.S. government calls for "an International Finance Corporation" tied to the World Bank. It would finance private enterprises in developing countries but:  Take no government guarantees  Always work alongside other private investors  Never manage its investees 1956 IFC Created: IFC opens under Garner's leadership with 12 full-time staff but just $100 million in authorized capital, a low amount that prevents it from making major investments. Shareholders only allow it to make loans, not the equity investments that Garner desired, and that in time would become the key to its profitability.

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21st century (Todays IFC):

2001 Sustainability Initiatives: Under Executive Vice President Peter Woicke's leadership, IFC begins mainstreaming sustainability concerns into all its investment operations. 2003 Equator Principles: Meeting at IFC10 top international banks adopt the Equator Principles, applying new environmental and social development standards to their project finance lending based on IFC's own standards. By 2009, 68 participating banks had adopted the Equator Principles, representing 90 percent of all global project financing. 2007 IDA Focus: IFC's investment in IDA countries grows by 75 percent in one year, part of a new focus on the world's poorest countries and other frontier regions left out of the emesrging market investment boom. Soon, more than half of IFC investment projects will be in IDA countries.

Member Countries:
IFC has 182 member countries. To join IFC, a country must:
y y y

Be a member of the World Bank (International Bank for Reconstruction and Development). Have signed IFC's Articles of Agreement and Have deposited with the World Bank Group's Corporate Secretariat an Instrument of Acceptance of IFC's Articles of Agreement.

Pakistan has joined IFC 20th July 1956.

Functions of IFC:
Investment & Advisory Services: IFC is a dynamic organization, constantly adjusting to the evolving needs of our clients in emerging markets. We are no longer defined predominantly by our role in providing project finance to companies in developing countries. IFC supports private sector development both by investing and by providing advisory services that build businesses. We have also:
y y y

Developed innovative investment services . Broadened our capacity to provide advisory services. Deepened our corporate governance, environmental and social expertise.

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IFCs Working In Pakistan:

Pakistan is one of the biggest beneficiaries of IFC's Global Trade Finance Program in MENA (Middle East and North Africa). In fiscal year 2009, it provided 11 Pakistani banks with a combined $233 million in guarantees, which has enabled banks to increase cross-border transactions in machinery, oil, iron and steel and agricultural products. IFC also provided our most active partner in the program, Habib Bank, with $116 million in guarantees to keep business moving. The guarantees allowed those businesses to import essential raw materials and equipment and ship their products to buyers overseasand keep their people employed. Our advisory services have had numerous successes, such as helping launch the first alternative dispute resolution center in Pakistan, the Karachi Center for Dispute Resolution. We also supported the first private credit bureau, Data Check. Under our Business Edge management training program, IFC teamed up with Standard Chartered Bank in Pakistan to support small and medium enterprises in different sectors and cities such as trade in Lahore, metal work in Gujranwala, rice processing in Sialkot, and textiles in Faisalabad.

Financial Crisis: IFC's Response :

The global financial crisis changed the economic order, deepening the challenges developing countries will face in the decades ahead. During the crisis and into the recovery, IFC provided critical support to banking sectors and businesses around the world, easing unemployment and ensuring that companies and individuals continue to have access to finance. Support for the initiatives totaled more than $11 billion in FY10, including over $6 billion from IFCs own account, $2 billion in direct support from partner governments and international financial institutions through IFC, and $3 billion in parallel financing arrangements. We have also launched coordinated action plans with other international financial institutions in Africa, Central and Eastern Europe, and Latin America and the Caribbean. Our targeted initiatives include:
y y y y y y y y y

Access to Finance. Debt & Asset Recovery Program. Global Agriculture and Food Security Program. Global Trade Finance Program. Global Trade Liquidity Program. IFC Capitalization Fund. Infrastructure Crisis Facility. Microfinance Enhancement Facility. Targeted Regional Responses.

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References:
1. 2. 3. 4. 5. 6. http://www.ifc.org/about http://www.ifc.org/ifcext/about.nsf/AttachmentsByTitle/ifctFS.htm/$FILE/ifctFS.htm http://www.ifc.org/ifcext/about.nsf/Content/Mission http://www.ifc.org/ifcext/about.nsf/Content/Services http://www.ifc.org/ifcext/about.nsf/Content/Member_Countries http://www.ifc.org/ifcext/about.nsf/Content/FinancialCrisis

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