International financial institutions

part or any of 
their 
requirements on 
IBRD terms. 
All developing countries, 
from the poorest to the 
more advanced. 

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The World Bank 
International
International 
Bank for 
Development 
Reconstruction Association 
and development 
(IBRD) 
International Finance 
Corporation (IFC) 
Types of activities 
assisted 
Agriculture and rural 
development, energy, education, 
transportation, 
telecommunications, industry, 
mining, development finance 
companies, urban development, 
water supply, sewerage, 
population, health and nutrition. 
Some nonproject lending, 
including structural adjustment. 
Agribusiness, 
development, finance 
companies, energy, 
fertiliser, manufacturing, 
mining, money and 
capital market 
institutions, tourism and 
services, utilities. 
Terms of lending: 
Average maturity 
period 
Generally 15 to 
20 years 
50 years 
7 to 12 years 
Grace period 
Generally 3 to 5 
years 
10 years 
An average of 3 years 
Recipients of 
financing 
Governments, 
government 
agencies and 
private 
enterprises 
which can get a 
government 
guarantee for 
the IBRD loan. 
Government. 
But they may 
relend funds to 
state or private 
organisations. 
Private enterprises; 
government organisations 
that assist the private 
sector. 

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The World Bank 
International
International 
Bank for 
Development 
Reconstruction Association 
and development 
(IBRD) 
International Finance 
Corporation (IFC) 
Government 
guarantee 
Essential 
Essential 
Neither sought nor 
accepted 
Main method of 
raising funds 
Borrowings 
capital markets 
Grants from in 
world’s 
governments. 
Borrowings and IFC’s own 
capital, subscribed by 
member governments. 
Main sources of 
funds 
Financial 
markets in US, 
Germany, 
Japan and 
Switzerland. 
Governments of 
US, Japan, 
Germany, 
France, other 
OECD countries 
and certain 
OPEC countries. 
Borrowings from IBRD. 
Source: The World Bank and international Finance Corporation 
(Washingto0n, D.C. The World Bank, 1983). 
15.3 THE WORLD BANK
The World Bank group is a multinational financial institution 
established at the end of World War II (1944) to help provide long-term 
capital for the reconstruction and development of member countries. 
The group is important to multinational corporations because it 
provides much of the planning and financing for economic 
development projects involving billions of dollars for which private 
businesses can act as contractors and suppliers of goods and 
engineering related services.

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The purpose for the setting up of the Bank are 
• 
To assist in the reconstruction and development of 
territories of members by facilitating the investment of 
capital for productive purposes, including the restoration 
of economies destroyed or disrupted by war, the 
reconversion of productive facilities to peacetime needs 
and encouragement of the development or productive 
facilities and resources in less developed countries.
• 
To promote private foreign investment by means of 
guarantees or participation in loans and other 
investments made by private investors; and when private 
capital is not available on reasonable terms, to 
supplement private investment by providing, on suitable 
conditions, finance for productive purposes out of its own 
capital, funds raised by it and its other resources.
• 
To promote the long-range balanced growth of 
international trade and the maintenance of equilibrium in 
balance of payments by encouraging international 
investment for the development of the productive 
resources of members, thereby assisting in raising 
productivity, the standard of living and condition of 
labour in their territories.
• 
To arrange the loans made or guaranteed by it in relation 
to international loans through other channels so that the 
more useful and urgent projects, large and small alike, 
can be dealt with first.

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• 
To conduct its operations with due regard to the effect of 
international investment on business conditions in the 
territories of members and, in the immediate post-war 
years, to assist in bringing about a smooth transition 
from a wartime to a peacetime economy. 
The World Bank is the International Bank for Reconstruction 
and Development (IBRD) and the International Development 
Association (IDA). The IBRD has two affiliates, the International 
Finance Corporation (IFC) and the Multilateral Investment Guarantee 
Agency (MIGA). The Bank, the IFC and the MIGA are sometimes 
referred to as the “World Bank Group”.