Resource Mobilization

Mobilizing funds from private investors and lenders for private sector projects in developing countries is one of IFC's most essential functions. IFC actively seeks partners for joint ventures and raises additional finance by encouraging other institutions to make investments in IFC projects. The Corporation's unique strengths include:

• The ability to act as a catalyst. By mobilizing capital from institutions that would not invest without IFC's involvement, the Corporation greatly increases the leverage of its limited resources.
• A large network of company contacts and a special ability to match sponsors and partners with investors.
• A capacity to pioneer transactions that are first-of-their kind to a particular market.

IFC operates on a commercial basis. It invests exclusively in for-profit projects and charges market rates for its products and services.

Securitization, Underwriting and Private Placements

The cornerstone of IFC's finance mobilization efforts is the B-loan program for syndicated loans. In addition, IFC is at the forefront of developing innovative products and instruments that channel investor funds to the private sector in developing countries. It continuously adopts new approaches to fund mobilization in areas such as underwriting, securitization and private placements.

For example, IFC helped established the first specialized securitization and credit enhancement institution in Indonesia. As corporations in developing countries find that their financing requirements increase, some attempt to fill these needs by issuing securities in international capital markets. Through securitization, IFC can help these companies raise funds.

Portfolio Investment    

IFC also promotes foreign portfolio investment in developing countries by establishing and investing in a wide range of funds, such as private equity funds and debt funds that invest in emerging market securities issues. For example:

• IFC launched the first local currency emerging market corporate debt fund.
• As an alternative method for investors to gain access to emerging markets, IFC promotes index funds.
• Investments in venture capital funds help channel flows to companies that are generally unlisted and that might not recieve the notice of large investors.

By pioneering and actively promoting such funds for developing countries, IFC has introduced many international portfolio investors to emerging markets. Through IFC's mobilization efforts, both small and large companies in the developing world gain access to longer-term finance, many for the first time. Accessing financing from international capital markets help them enhance their competitiveness in more open economies around the world.