The International Finance Corporation (IFC) is an organization dedicated to helping the private sector within developing countries. It provides investment and asset management services to encourage the development of private enterprise in nations that might be lacking the the necessary infrastructure or liquidity for businesses to secure financing.
The IFC was established in 1956 as a sector of the World Bank Group, focused on alleviating poverty and creating jobs through the development of private enterprise. To that end, IFC also ensures that private enterprises in developing nations have access to markets and financing. Its most recent goals include the development of sustainable agriculture, expanding small businesses’ access to microfinance, infrastructure improvements, as well as climate, health, and education policies. The IFC is governed by its 184 member countries and is headquartered in Washington, D.C.
The IFC views itself as a partner to its clients, delivering not only support with financing but also technical expertise, global experience, and innovative thinking to help developing nations overcome a range of problems, including financial, operational, and even at times political.
The IFC also aims to mobilize third-party resources for its projects, often engaging in difficult environments and leading crowding-in private finance, with the notion of extending its impact beyond its direct resources.
International Development Association (IDA)
IDA is the largest source of concessional finance for the world’s 75 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries.
With the ratification of the Sustainable Development Goals (SDGs) in 2015, along with a historic agreement in Addis Ababa on ways to mobilize financing needed for the SDGs, the world has a new roadmap for ending poverty by 2030. The International Development Association (IDA) is poised to play a key role in this mission, by catalyzing trillions of dollars in needed investment – public and private, national and global—and translating the SDGs into country-led action.
As the largest source of concessional finance, IDA is recognized as a global institution with a transformative effect that individual national donors cannot match. Here’s why:
- IDA provides leadership on global challenges. From its support for climate resilience to the creation of jobs to get former combatants back into society, IDA rallies others on tough issues for the common good and helps make the world more secure.
- IDA is transformational. IDA helps countries develop solutions that have literally reshaped the development landscape—from its history-changing agriculture solutions for millions of South Asians who faced starvation in the 1970s to its pioneering work in the areas of debt relief and the phase-out of leaded gasoline.
- IDA is there for the long haul. IDA stays in a country after the cameras leave, emphasizing long-term growth and capability to make sure results are sustained.
- When the poorest are ignored because they’re not profitable, IDA delivers. IDA provides dignity and quality of life, bringing clean water, electricity, and toilets to hundreds of millions of poor people.
- IDA makes the world a better place for girls and women. IDA works to reverse gender discrimination by getting girls to school, helping women access financing to start small businesses, and ultimately helping to improve the prospects of families and communities.
- Working with the World Bank Group, IDA brings an integrated approach to development. IDA helps create environments where change can flourish and where the private sector can jumpstart investment.
- IDA is also a global leader in transparency and undergoes the toughest independent evaluations of any international organization. For example, IDA placed in the highest category in the 2018 Aid Transparency Index every year since the index was first published in 2010—ranking highest among multilateral development banks.
- Equally, a 2018 assessment by the Center for Global Development and the Brookings Institution named IDA one of the international community’s top performing providers of development assistance, citing IDA’s low administrative costs, more predictable aid flows, and large project size relative to other donors.
- And a 2017 survey of policymakers from 126 low- and middle-income countries by AidData ranked the World Bank 2nd out of 56 bilateral donors and multilateral institutions on its agenda-setting influence in developing countries. The report cites the World Bank as “punching above its weight” on value for money.