The International Finance Corporation (IFC), a member of the World Bank Group (WBG), is the largest global development institution focused exclusively on the private sector. IFC helps developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY13, IFC’s investments reached more than $25 billion, leveraging the power of the private sector to create jobs, spark innovation, and tacking the world’s most pressing development challenges.
Private sector development (PSD) policy and strategy
The basis for IFC’s strategy is threefold: (i) the broad recognition of the role of the private sector as a critical driver of economic growth, and creator of the majority of jobs, in developing countries; (ii) IFC’s unique offering to the private sector operating in those countries including through its global knowledge and reach, combination of Investment Services (IS), Advisory Services (AS) and the IFC Asset Management Company (AMC), role as part of the WBG, and combination of both development and financial goals; and (iii) the opportunity for the WBG to be transformational through collaborative approaches that support, leverage, and complement private sector activity.
The WBG goals are to eradicate extreme poverty and pursue shared prosperity, taking into account the need to promote environmentally sustainable development. In support of this, IFC’s five Strategic Focus Areas constitute the framework for prioritizing its activities across IS, AS and AMC:
- Strengthening the focus on frontier markets – IDA countries, Fragile and Conflict Situations (FCS), and frontier regions in non-IDA countries;
- Addressing climate change, and ensuring environmental and social sustainability;
- Addressing constraints to private-sector growth in infrastructure, including water; health, education, and the food supply chain;
- Developing local financial markets through institution-building, the use of innovative financial products and mobilization, focusing on micro, small and medium enterprises (MSMEs); and
- Building and maintaining long-term client relationships with firms in developing countries, using the full range of IFC’s products and services, and assisting their cross-border growth.
IFC also continues to place a strong emphasis on gender as a cross-cutting theme. Following the 2013 World Development Report (WDR) on Jobs and the IFC Jobs Study, IFC is also putting a special emphasis on jobs, which the majority of poor people consider their most likely pathway out of poverty.
While IFC will continue strategy implementation in all five Strategic Focus Areas, it will put more focus on certain geographies, sectors and themes in the near to medium term. These are:
- FCS and other challenging IDA countries;
- South Asia, with the intent to increase this region’s share of IFC’s own-account commitments, as well as IFC’s Advisory Services program (increased focus in addition to Sub- Saharan Africa (SSA) and the Middle East and North Africa, which continue to be priority regions);
- Agribusiness and the food supply chain, and infrastructure, especially in SSA; and
- Climate change, with the intent to grow annual long-term and short-term finance commitment volumes.
Key resources include:
- IFC Annual Report
- World Bank Group Corporate Scorecards (2014)
- Two Goals (2013)
- Telling Our Story
- Handshake, quarterly journal on Public-Private Partnerships
- A Rough Guide to Investment Climate Reform in Conflict-Affected Countries (2009)
- Better Work (partnership with the ILO)
- World Bank PSD Blog
Transparency, effectiveness and results in PSD
Through its Access to Information Policy (AIP), the IFC seeks to provide accurate and timely information regarding its investment and advisory services activities to its clients, partners and stakeholders.
The World Bank Group’s core strategy (2013), ending extreme poverty by reducing the percentage of people living on less than $1.25 a day to three percent by 2030; and promoting shared prosperity by fostering income growth for the bottom 40 percent of the population in every developing country. The is being monitored by the World Bank Group Corporate Scorecard (2014), which provides an apex view of the results and performance indicators of the the three World Bank Group institutions, including the IFC – as compared against the IFC Development Goals.
Evaluation has been integral to IFC’s results measurement since 2005, when IFC first began working with external evaluators to generate useful lessons and produce impartial assessments of development effectiveness. By revealing the factors for success or failure, evaluations help IFC understand what we need to do more of—and less of—to achieve IFC’s mission. In 2011, we launched an evaluation strategy focused on maximizing opportunities for learning. The strategy has four main objectives: (1) to credibly articulate IFC’s development impact; (2) to learn how to maximize the effectiveness of IFC interventions; (3) to provide useful business intelligence to clients and partners; and (4) to exchange knowledge with external actors. The evaluation strategy complements the work of the Independent Evaluation Group which reports directly to the Board of Directors and is charged with providing its own assessments and lessons of experience. IEG’s evaluations incorporate findings from IFC’s own monitoring and evaluations. IFC’s evaluation staff works closely with IEG to discuss work programs, share knowledge, and align efforts whenever possible.