There is the provision for expanding the capital base of the Corporation, if it is asked by the members through a three-fourth majority.
Apart from the contribution from the members, the IFC is authorised to borrow funds from the World Bank upto the extent of four times its subscribed capital for financing its lending operations.
The need was, therefore, felt to institute a specialised financial agency to provide capital to the private sector enterprises in the developing member countries.
Consequently, the International Finance Corporation (IFC) was set up in July 1956.
The IFC, in contrast, has limited financial resources which it offers to the private enterprises for facilitating their expansion in the LDC’s.
(x) The IFC does require no guarantee of the country where the project to be aided by the IFC, is located.
International Finance Corporation (IFC) is the private sector arm of the World Bank.
There were two glaring shortcomings related to the IBRD lending.
First, it provides loans only to the member countries on the basis of the guarantee of member country.
Second, the World Bank could provide fixed interest loans and not the equity capital.