1

S.P. MANDALIS
R. A PODAR COLLEGE OF COMMERCE AND ECONOMICS
MATUNGA, MUMBAI-400 019.

A PROJECT REPORT ON
IFC AND INDIA ITS ROLE
SUBMITTED BY
Hitesh Lalji Solanki
Roll No-112
M.COM (SEM. III): International Marketing
SUBMITTED TO
UNIVERSITY OF MUMBAI
2014-2015
PROJECT GUIDE
Prof. Mrs. Tejashree patankar




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S.P. MANDALIS
R. A PODAR COLLEGE OF COMMERCE AND ECONOMICS
MATUNGA, MUMBAI-400 019.

CERTIFICATE
This is to certify that Mr.Hitesh lalji solanki of M.Com (Business Management) Semester
III (2014-2015) has successfully completed the project on international marketing under
the guidance of Prof. Mrs. Tejashree patankar

Project Guide/Internal Examiner External Examiner
Prof. Dr. (Mrs.) Tejashree patankar Prof.________________________

Dr. (Mrs.) Vinita Pimpale Dr. (Mrs.) ShobanaVasudevan
Course Co-ordinator Principal





Date- 8
th
Oct 2014 Seal of the college
3



ACKNOWLEDGEMENT

I acknowledge the valuable assistance provided by S. P Mandalis R. A.
Podar College of Commerce & Economics, for two year degree course in
M.Com.
I specially thank the Principal Dr. (Mrs.) Shobana Vasudevan for allowing
us to use the facilities such as Library, Computer Laboratory, internet etc.
I thank my guide Prof. Ms. Tejashree patankar who has given her valuable
time, knowledge and guidance to complete the project successfully in time.
I sincerely thank the M.Com Co-ordinator for guiding us in the right
direction to prepare the project.
My family and peers were great source of inspiration throughout my project,
their support is deeply acknowledged.





Signature of the Student


4




DECLARATION
I, Hitesh Lalji Solanki of R. A. PODAR COLLEGE OF
COMMERCE & ECONOMICS of M.Com SEMESTER III, hereby
declare that I have completed the project STUDY ON IFC AND INDIA
ITS ROLE in the academic year 2014-2015 for the subject
INTERNATIONALMARKETING the information submitted is true and
original to the best of my knowledge.






Signature of the Student


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INDEX

Sr.no TOPIC
Page
No.
1 Introduction of IFC 6
2 History of IFC 7
3 Indian Economy 14
4 IFC In india 18
5 Strategic approach 19
6 Impact of IFC 23
7 Conclusion 31
8 Bibliography 31
9
10
11
12
13





6


International financial corporation
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector in developing countries. Established in
1956, IFC is owned by 184 member countries, a group that collectively determines our
policies. Our work in more than a 100 developing countries allows companies and financial
institutions in emerging markets to create jobs, generate tax revenues, improve corporate
governance and environmental performance, and contribute to their local communities.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution
focused exclusively on the private sector in developing countries. Established in 1956, IFC is
owned by 184 member countries, a group that collectively determines our policies. Working
with private enterprises in more than 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and promote shared prosperity. IFC leverages the
power of the private sector to create jobs and tackle the worlds most pressing development
challenges. IFCs vision is that people should have the opportunity to escape poverty and
improve their lives. IFCs vision is that people should have the opportunity to escape poverty
and improve their lives.
Strategic Priorities:
Strengthening the focus on frontier markets
Addressing climate change and ensuring environmental and social sustainability
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Addressing constraints to private sector growth in infrastructure, health, education,
and the food-supply chain
Developing local financial markets
Building long-term client relationships in emerging markets
Goals and Values of IFC
As a member of the World Bank Group, IFC has two overarching goals:
End extreme poverty by 2030
Boost shared prosperityin every developing country
Promote food security
Enhance economic development and inclusion in the agriculture sector
Make environmental and social sustainability a business driver
Create jobs at farm and non-farm levels
History of IFC
Six Decades of Creating Opportunity
A daring new idea when created in the 1950s, IFC is the largest organization of its kind in the
world. A sense of innovation and the strength of our core corporate values--excellence,
commitment, integrity, teamwork, and diversity--have driven this growth over the years.
Holding a $49.6 billion portfolio touching almost every major industry, we now reach
millions of people in more than 100 countries, creating jobs, raising living standards, and
building a better future to support the World Bank Group's two goals: ending extreme
poverty and boosting shared prosperity.

8

1940 ROOT
1944 Bretton Woods Conference
Delegates from 44 countries meet at Bretton Woods Conference, creating the World Bank
and International Monetary Fund to transfer financial resources to member governments--but
no separate entity for private sector development.
1946 World Bank Opens
The World Bank begins operations with 32 shareholding countries, $7.7 billion in capital, and
headquarters in Washington, D.C. IFC has not yet been created.
1947 Garner Arrives
The driving force behind the future IFC, New York financier Robert L. Garner, joins the
World Bank as one of its first senior executives. He brings a keen sense of the role private
business can play in international development, a topic few others considered at the time.
1950S CREATION
1950 The Idea of IFC
Garner and colleagues suggest creating a new institution to stimulate private investment in
the Bank's borrowing countries. "It was my firm conviction that the most promising future for
the less developed countries was the establishing of good private industry," Garner said
1951 Growing Support
The U.S. government calls for "an International Finance Corporation" tied to the World
Bank. It would finance private enterprises in developing countries but:
Take no government guarantees
Always work alongside other private investors
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Never manage its investees
1956 IFC Created
IFC opens under Garner's leadership with 12 full-time staff but just $100 million in
authorized capital, a low amount that prevents it from making major investments.
Shareholders only allow it to make loans, not the equity investments that Garner desired, and
that in time would become the key to its profitability.
1960-1970S GROWTH
1960 IDA Created
World Bank shareholding governments create the International Development Association
(IDA), a new concessional funding arm for the world's poorest countries. In time, IDA
countries will become IFC's main focus.
1961 New Powers
Upon retirement, Robert L. Garner sees a key part of his historic vision become reality: IFC
is authorized to make equity investments. The first one follows the next year (a stake in
Spanish auto parts manufacturer FEMSA).
1965 First Syndication
IFC mobilizes $600,000 from Deutsche Bank and others for Brazilian pulp and paper
company Champion Cellulose. The transaction provides early support for Champion, a rising
player that in 2001 is sold for $9.1 billion to the world's largest paper company, International
Paper of the U.S. The project also launches IFC's syndications program.
1969 A Call for Growth
accepting an independent commission's report, World Bank President Robert S. McNamara
agrees that a larger, more development-oriented IFC could play a powerful role. To guide the
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thinking behind IFC's growth, he recruits IMF official Moeen Qureshi, a future prime
minister of Pakistan.
1971 Financial Markets
At a time when few development thinkers are focused on the role of financial institutions,
IFC breaks the mold, creating a Capital Markets Department to strengthen local banks, stock
markets, and other intermediaries. In time this function will become IFC's largest area of
emphasis.
1972 1977 First Field Offices
Decentralization begins with small one-man offices in Jakarta and Nairobi, followed by
establishment of the first regional mission for East Asia, based in Manila. By 2008, more than
50 percent of IFC staff will be based outside of Washington, DC.
1980s-1990s A New Era
1981 Emerging Markets
IFC coins the phrase "emerging markets." Investment Officer Antoine van Agtmael devises
the term as a way to change the financial world's perception of developing countries. It sticks,
defining a new asset class. Worth almost nothing at first, the total capitalization of emerging
market stock markets will reach $5 trillion within 25 years of IFC's origination of the phrase
1982 First Advisory Facility
IFC creates its first multi donor advisory services initiative, the Caribbean Project
Development Facility. The first of many such initiatives within IFC, the initiative was
credited with creating 17,500 jobs before closing in the 1990s
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1984 Financial Autonomy
Long reliant on World Bank support, IFC becomes financially independent, gaining approval
to issue its own bonds in international capital markets.
1989 AAA Credit Rating
IFC receives the highest possible endorsement of financial health from private rating
agencies. It becomes the key to a large-scale, multicurrency borrowing program that by 2009
will exceed $9 billion a year.
1991 Capital Increase
Shareholders give IFC a record $1.2 billion capital increase, leading to increased work in
privatization, infrastructure finance, capital market development, support of small and
medium enterprises, and renewed collaboration with the World Bank.
1994 Information Disclosure
IFC enacts its first policy on public disclosure of information, greatly increasing its openness
and transparency by increasing the amount of project information it releases on projects
before board approval. As part of the policy, IFC "recognizes and endorses the fundamental
importance of accountability and transparency in the development process."
1999 Increased Accountability
As part of an increasing commitment to openness and accountability, Meg Taylor is
appointed Compliance Advisor/Ombudsman for IFC and MIGA. The post is the first of its
kind in a multilateral development institution.



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21st century todays IFC
2001 Sustainability Initiatives
Under Executive Vice President Peter Woicke's leadership, IFC begins mainstreaming
sustainability concerns into all its investment operations.
2003 Equator Principles
Meeting at IFC, 10 top international banks adopt the Equator Principles, applying new
environmental and social development standards to their project finance lending based on
IFC's own standards. By 2009, 68 participating banks had adopted the Equator Principles,
representing 90 percent of all global project financing.
2007 IDA Focus
IFC's investment in IDA countries grows by 75 percent in one year, part of a new focus on
the world's poorest countries and other frontier regions left out of the emerging market
investment boom. Soon, more than half of IFC investment projects will be in IDA countries.
2007 Decentralization
With most clients now coming from emerging markets, IFC plans moves to increase client
service and responsiveness by streamlining business procedures and decentralizing staff and
decision making. By 2009, IFC will be present in more than 80 countries and have more than
half of its staff in the field-a dramatic turnaround from previous years.
2008 Expanded Reach
for the year, IFC clients provide 2.1 million jobs, serve 5.5 million patients, and help educate
1.2 million students. This comes as IFC's new financing reaches $16.2 billion, a 34 percent
increase over the previous year. This includes $11.4 billion for IFC's own account and $4.8
billion mobilized for clients.
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2009 Crisis Response
Amid a severe global economic downturn, IFC and its many partners launch crisis response
initiatives in trade finance, microfinance, infrastructure, advisory services, and distressed
assets. The moves show IFC's growing leadership, helping clients weather the storm and
preserve jobs during the crisis.
Organization
IFC coordinates its activities with the other institutions of the World Bank Group but is
legally and financially independent.
Ownership & Governance
IFC's 184 member countries, through a Board of Governors and a Board of Directors, guide
IFC's programs and activities. Each country appoints one governor and one alternate.
G-20 Recognition
Recognizing IFC's leadership in the field, the G-20 makes us its global partner in SME
development. At its Seoul summit, the G-20 receives our knowledge-sharing report on access
to finance, and ask IFC to lead implementation of the SME Finance Challenge, a new
campaign to scale up successful models of support to SMEs, a key driver of job creation and
growth
Financial performance
The IFC prepares consolidated financial statements in accordance with United States GAAP
which are audited by KPMG. It reported income before grants to IDA members of $2.18
billion in fiscal year 2011, up from $1.95 billion in fiscal 2010 and $299 million in fiscal
2009. The increase in income before grants is ascribed to higher earnings from the IFC's
investments and also from higher service fees. The IFC reported a partial offset from lower
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liquid asset trading income, higher administrative costs, and higher advisory service
expenses. The IFC made $600 million in grants to IDA countries in fiscal 2011, up from $200
million in fiscal 2010 and $450 million in fiscal 2009. The IFC reported a net income of
$1.58 billion in fiscal year 2011
Indian Economy
For those not familiar with the Indian economy. In the post-independence era 1947 91,
India was a mixed economy with a high degree of state intervention including
nationalization and price controls. The economic performance was mixed, but generally
disappointing. Since 1991, the economy has pursued a general approach of free market
liberalization and greater investment in infrastructure. This helped the Indian economy to
achieve a rapid rate of economic growth and economic development. The economy has
become more open, with significant growth in exports and imports. The economic growth has
led to a boom in investment, real estate and a growth of the financial sector. Too many, India
is the second China and the economy has the potential to become one of the largest in the
world.
However, at the present time, the Indian economy faces several challenges.
In the past couple of years, there has been a fall in the rate of growth causing concern
that the period of high growth is coming to an end. (growth fell to a low of 4.4% in
2013 bear in mind, Indias rising population mean GDP per capita is less impressive
than just real GDP growth)
India has struggled to keep inflation low. In 2013, inflation was nudging near 10%,
hurting the living standards of the poor who are particularly vulnerable to the price of
food. High inflation is also harming confidence for investment.
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Current account deficit. Indias growth has been at the cost of a persistent current
account deficit (which reached over 6% of GDP in 2012). India needs to import crude
oil, machinery and many other raw commodities. Its export sector has struggled to
match the growth of imports.
Rupee devaluation. The large current account deficit has caused the Rupee to fall,
despite very low interest rates in US and Europe.
Inequality / poverty. Parts of the Indian economy have made rapid growth, but it has
proved difficult for the fruits of economic growth to filter through to all areas of the
economy, especially isolated rural areas where there is poor infrastructure.
Government budget deficit. Despite years of economic growth, the government has
found it difficult to balance the budget. The budget deficit is 4.8% of GDP in the year
201213. Public sector debt is 68.05% of GDP, one of highest for a developing
economy. Tax collection is still limited by tax evasion and corruption (tax collection
only accounts for 9% of GDP one of lowest in the world). The government is
committed to reducing the budget deficit, but this may be at cost of social welfare
programmers.
More detail on the Indian economy
Economic growth
Indian economic growth is predicted to be around 5% by March 2014. From European
standards, this sounds very impressive. But, is much lower than the rate of nearly 10%
achieved in much of the recent decade. Growth of 5% reflects the fact there is much spare
capacity and scope for improvement. Without a high rate of growth, the concern is that it will
lead to unemployment and discourage future investment. Politicians have been predicting
upturns in the rate of economic growth for a long time, hoping it would come in the next
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quarter. Unfortunately, this has raised and then broken expectations. However, growth did
finally picked up to 4.8% in Q3 2013. (Higher than previous quarter of 4.4%)
Inflation
Inflation is a real problem for the Indian economy. It has proved stubbornly high. Inflation
reached 11.24% in November 2013 the highest for years. Inflation did fall back to 9.92% in
Dec, but there is concern about the stubbornness of high inflation, despite the relatively
sluggish growth. The chief of the Reserve Bank of India, Raghu ram Rajang has made control
of inflation his highest priority and has increased interest rates twice since his appointment in
September. Rajan argues that price stability is key to Indias long term prosperity. However,
the concern is that inflationary pressures tend to be due to supply side factors (e.g. rising
vegetable prices) and the use of monetary policy may be limited in solving this. For Rajan to
tackle cost push inflationary pressures using interest rates may damage prospects for growth
without tackling the underlying inflationary causes. To tackle supply constraints which are
behind the cost-push inflation will prove much more difficult.
The Central Bank repo rate is 7.75% (Central Bank of India)
Current account deficit
One benefit of the slowdown in economic growth has been the improvement in the current
account deficit. Reaching a deficit of over 6.7% in last quarters 2012, the deficit has fallen to
1.2% in Q3 2013. This is an important improvement, and means less foreign currency needs
to be attracted to finance the deficit. However, the Economist notes that 75% of the
deficit reduction is artificially related to reducing imports of gold through government
restrictions. Therefore, there is still an underlying trade deficit, India will need to work on
through increasing exports and competitiveness. This may require further devaluation in the
Indian Rupee, which will increase the cost of living for many.
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Indian Rupee
Since the beginning of 2012, there has been a significant fall in the Indian Rupee against the
US dollar. From 1 Indian Rupee = 0.023 US dollars (2012), the Rupee has fallen to 1 Indian
Rupee = 0.0016 US dollars (2014). This is a reflection of the large current account deficit and
uncertainties about the Indian economy. The concern is that a recovering American economy
could see US rates and the US dollar increase, putting more pressure on the Indian Rupee.
To some extent, the devaluation in the Rupee has been necessary to improve Indias
Competitiveness. But, there is a danger that a rapid fall can cause a loss of confidence and
increase import prices.
Open economy
One of the success stories of the Indian economy has been the improvement in trade in recent
years. India has liberalized trade and seen its exports of both visible and invisibles grow.
However, the downside of a more open economy is that the Indian economy is now more
vulnerable to a downturn in the world economy. This can be offset by a diversification in
trade away from Europe and the US.
Other indicators
Unemployment in India is only 8.5% (2012 est.)
There are still levels of extreme poverty. 21.9% of the population are considered to be
living in poverty during 201112 (Tendulkar Methodology)
Agriculture produces 17.4% of economic output but, over 51% of the population work
in agriculture

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India Statistics
GDP PPP $4.716 trillion (2012 est.) 4th world
GDP PPP per capita $3,800 (2012 est.) 168th
IFC in India
Since 1956, IFC has invested in 346 companies in India, providing over $10.3 billion in
financing for its own account and $2.9 billion in mobilization from external resources.
As of June 30, 2014, IFC's committed portfolio in India stood at $4.7 billion, making India
IFC's largest portfolio exposure. The most acute needs for energy, water, roads, phone
connections, healthcare, education, sanitation, waste management, access to financial
services, are among those who live in low-income, rural and semi-urban parts of the country.
To grow opportunities for the underserved, IFC concentrates on low-income, rural, and
fragile regions while
building infrastructure and assisting public-private-partnerships;
facilitating renewable energy generation; promoting cleaner production, energy and
water efficiency;
supporting agriculture for improved food security;
creating growth opportunities for small businesses;
reforming investment climate;
developing public-private partnerships;
encouraging low-income housing; and
making affordable healthcare efficient and accessible.
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Through these strategic interventions in the region, IFC aims to bring economic opportunities
to underserved communities where needs are greatest, particularly in the low income states of
India; help address climate change impacts; and encourage global and regional integration
including promoting trade and investments within and from South Asia
Inclusive Growth
India has seen strong economic growth in recent years, and it now faces the challenge of
using this growth to address widespread poverty. IFC is using a combination of investments
and advisory services to support private sector development in the country, with an emphasis
on making growth more inclusive.
On a visit to India this week, IFC Executive Vice President and CEO Lars Thunell was struck
by the country's stark economic contrasts. "While India has made impressive progress, IFC
seeks to help the country reach more of its neediest people and regions with the benefits of
growth," Thunell said.
A Strategic Approach
IFC's work in India focuses in several key areas:
Improving rural productivity though agribusiness and supply-chain linkage programs
Facilitating access to finance in underserved rural and urban markets
Promoting private investment in infrastructure, including through advice on specific public-
private partnerships Supporting private sector solutions for climate change Our focus on
agribusiness has led to recent investments in small companies, like ABC Coffee and Suguna
Poultry, that are leaders in their field. IFC Advisory Services works closely with the World
Bank to assess India's investment climate and advise government agencies on competition
20

policy. Our advisory portfolio includes about 40 projects in such areas as micro, small, and
medium enterprises; grassroots and rural businesses; infrastructure; the environment; access
to finance; and the investment climate. With IFC's support, the Self Employed Women's
Association in Gujarat has been able to extend its services to women in rural areas. These
include a managers' school, which has trained 80,000 people in technical and management
skills, and the SEWA Trade Facilitation Centre, which has provided market access and secure
livelihoods for its 15,000 members. IFC is also helping SEWA restructure its financial and
accounting systems.
IFC has also provided more than 3,000 small farmers in Jharkhand with capacity-building
services and better income opportunities through a project with Usha Martin, an IFC portfolio
client. Another major initiative is the Cairn linkages program in Rajasthan, which focuses on
local supplier development, child and maternal health care, and a dairy development project.
Reaching Needy Markets
IFC considers microfinance a key part of including more people and needy regions in India's
growth. We have reinforced this focus by supporting important market players with a variety
of financial instruments. Through collective investment vehicles, such as Lock Capital, IFC
has supported the emergence and growth of microfinance institutions. Similarly, IFC's
investment in Aavishkaar Goodwill will facilitate the launch of up to 60 new microfinance
organizations across India and the expansion of up to 10 fast-growing microfinance
institutions across the country. Last year, we also invested in Financial Information Network
& Operations Private Ltd, a startup provider of technology services. Known as FINO, the
company offers end-to-end IT solutions that can help banks address a large unmet demand for
financial services. FINO's technology will enable India's microfinance institutions to
automate government payments, banking, and other financial services for customers in rural
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areas. It will help also micro insurance providers process claims at lower cost and improve
the flow of information to the insurer from the field. FINO's "smart card"based platform will
help make social security and pension payments more efficient, reducing the cost of
transactions and ensuring that end-users receive payments on time.
"Unique partnerships and innovation are giving India an opportunity to bridge the gap
between large financial services providers and many underserved people. FINO is an
important example of what can be done, and IFC is pleased to work with clients who support
our objective of making development as inclusive as possible," Thunell said. IFC and FINO
will run pilot projects with leading microfinance institutions, banks, and government
organizations to develop, customize, test, and expand the adoption of IT technologies in
India's underserved markets. The two organizations will set up training, conferences, and
workshops for microfinance institutions. Training in local dialects will emphasize the benefits
of banking in rural areas and for people not currently being reached by financial services.
Partnership Overview
India has been a member of IFC since 1956. Through the Export-Import Bank of India, it
partners with IFC in providing technical assistance and advisory services to the
Private sector in the developing world. India is one of IFCs partners in the countries of the
former Soviet Union where work concentrates on attracting private direct investment;
supporting the creation and growth of the private sector, especially small and medium
enterprises; and improving the business-enabling environment in the region.
India has been a member of IFC since 1956. ThroughThe Export-Import Bank of India, it
partners with IFC in Providing technical assistance and advisory services to the Private sector
in the developing world. India is one of IFCs partners in the countries of the former Soviet
Union where work concentrates on attracting private direct investment; Supporting the
22

creation and growth of the private sector, especially small and medium enterprises; and
improving the business-enabling environment in the Region.
Credit line for Indian small scale business
The International Finance Corporation (IFC) is supplying a US$150m credit line to Indian
lender YES Bank. The money will go to supporting small businesses, particularly those
owned by women. The loans will be directed to companies in low-income states, including
the North East of India.
The US$150m investment is sourced from three pools of capital, including the IFC itself, a
Peoples Bank of China portfolio managed by the IFC and a syndicated loan from partner
banks AKA Frankfurt, Bank Muscat, Doha Bank and Intesa Sanpaolo. The IFCs direct
contribution to the YES Bank on-lending project was US$60m, with the syndicated loans
comprising US$45m and the IFCs co-lending portfolio funded by the Peoples Bank of
China offering another US$45m.
The YES Bank loan is the first IFC deal to be financed through the managed co-
lending programmed, where partner banks provide the capital, but the investment is selected
and implemented by the IFC.
IFC invested in bandhan finance service limited
IFC proposes to invest in Bandhan Financial Services Limited (Bandhan or the
Company), the fourth largest microfinance institution (MFI) in India. Bandhan operates
in 18 Indian states in the northern and eastern parts of the country, including some of the
poorest states, where population density is high and microfinance penetration is low. The
Company focuses primarily on providing microloans to women micro-entrepreneurs in rural
and urban areas. Bandhan today has about 3.0 million borrowers and a loan portfolio of about
US$520 million equivalent. The proposed project intends to help Bandhan increase its
23

outreach in the states where it operates as well as expand its operations in other states, where
access to finance is most scarce; diversify its product base; and establish international best
practice in its operations and governance.
Impact of the project
The proposed project is expected to have a high developmental impact by: (I) increasing
access to finance in some of the poorest states in the northern and eastern parts of India; (ii)
promoting a more balanced growth of microfinance in India. Most of the MFIs operating in
India are concentrated in southern India. Bandhan's operations are largely in the northern and
eastern part where microfinance penetration is very low and very few MFIs of significant size
are located; (iii) contributing to employment creation and poverty reduction in each of the
states where Bandhan operates; and (iv) providing capacity building support in areas such as
governance, product development and environmental and social standards so as to establish
best practice.

Impact of IFC on India
Increase productivity
Facilitating access to market
Enabling access to finance
Promoting sustainability
Increase productivity
South Asia has millions of high potential farmers. However, many rely on traditional farming
methods which may not always be the most productive. IFC identifies larger firms and
24

through their extension services, trains farmers to adopt farming techniques that lead to
higher productivity.
Increasing Sugarcane Productivity
Sugarcane farmers in Indias low-income state of Uttar Pradesh are seeing an increase in
sugarcane productivity as a result of IFCs agribusiness advisory project Meth Sona, or sweet
Gold. In India, over 50 million farmers depend on sugarcane cultivation for their livelihood.
But while some states in India have yields of more than 100 tons per hectare, farmers in Uttar
Pradesh produce only around 50-55 tons per hectare resulting in lower incomes from
sugarcane cultivation. IFC is working with DSCL to create a model for replication for the
sugar sector in Uttar Pradesh. The project supports IFCs South Asia strategy of inclusive
economic growth by promoting economic activities at the base of the pyramid. It also
strengthens IFCs footprint in one of Indias low income states.
Impact
In the second year of the project itself, trained farmers recorded a productivity increase of 86
percent from baseline levels, while farmers in control groups, who did not receive any
training, recorded an increase of only 19 percent. The program reached over 17,000 farmers
translating into improved quality of life for nearly 85,000people taking the average family
size as five. Based on the success of this initiative, IFC has now scaled up the project to work
with four sugar companies and increase the productivity of farmers in their supply chains.






25

Facilitate to access market
IFCs contribution to the challenge of agricultural development in rural areas focuses on
strengthening the supply chain between farmers and markets in terms of knowledge,
technology, and finance. It is expanding its work with new clients in agricultural products
such as fruits, vegetables, and dairy. For maximum impact, IFC identifies larger local firms
that have an interest in efficient and productive supply chains in agribusiness, and works with
them to deliver
Reach, inclusion, and impact. Modern grain silos in Punjab that are helping address grain
wastage and enhance food security in India.

In 2009, the Indian state of Punjab asked IFC to advise on public private partnership (PPP)
basis to develop state-of-the-art, long-term storage grain silos to store 7.1 million tons of
wheat for below poverty line families. The pilot project was implemented in April 2011.
Following competitive bidding, the government selected LT Foods Limited, a mid-size grain
trading company, to build and operate a 50,000 metric ton storage facility. The new silos
ensure that,
Annually 500,000 of Indias poorest will receive better nutrition and adequate grains.
This pilot had a positive effect for linkages in the supply chain and can be replicated
throughout
India and in other markets. The project was named the Best Pathfinder Project at the
Partnership Awards 2012 in London. The project was also featured in Euro moneys
Project Finance Yearbook and was ranked first in East Asia, Pacific and South Asia region by
Emerging Partnerships, IFCs global publication of top 40 PPPs in emerging markets.IFCs
experience with the Punjab Grain Silos project was featured as a case study in Economist
26

Intelligence Units recent report titled healthy Future for All: Improving Food Quality for
Asia.
Impact
Case Study | India Building on the pilots success, the government of India is planning a roll-
out program across 10 states to create 2 million metric tons of capacity on PPP basis. IFC is
assisting the Food Corporation of India in this strategic initiative which is at the core of
Indias food security. As part of the national level initiative, IFC expects to facilitate more
than 40
PPP contracts for setting up silo facilities, mobilize $400 million in private investment, help
provide more nutritious wheat for 20 million of Indias poorest, implement better
procurement practices and reduce waiting time for 266,000 farmers.


Enabling Access to Finance
A major problem is that only a limited number of farmers in South Asia have been able to
afford the improved seeds, fertilizers, micronutrients, and equipment they need to get ahead.
IFC works with banks and microfinance institutions to increase access to finance for small
agribusinesses
And farmers. IFC works with financial institutions to develop affordable and flexible
financial services that can help address environmental and market volatility to drive
productivity and increase access to markets. IFC has helped SANASA Insurance expand
access to insurance for small farmers by offering protection against weather-related risks and
natural disasters. The project will also raise awareness among farmers on the availability and
benefits of these index-based insurance products.

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Improving banking service for farmers
IFC is helping Andhra Pradesh State Cooperative Bank design and offer new products for
small farmers in Andhra Pradesh, Indias fourth largest state. The state cooperative bank
serves 4.3 million small and marginal farmers through a network of district cooperative
central banks and primary agricultural cooperative credit societies. With IFCs support, the
state cooperative bank is designing new credit and non-credit products, including loans,
savings, insurance, remittances, and other offerings for farmers. IFC is assisting the bank by
developing a robust risk management system to promote responsible finance and check over
indebtedness, which is leading to stronger Business operations. The project also includes
training on responsible finance for bank staff and member institutions of the bank. As a part
of this project, the state cooperative bank and IFC are working with Rabo Bank International
Advisory Services, which has expertise in the cooperative and financial sector.
Impact
The project aims to increase access to agri-finance for farmers in Andhra Pradesh. It
Will also expand financial offerings by developing at least three new financial products,
That meet customers needs. Finally, the project will advise the state cooperative bank
On how to improve overall strategy, governance, human resource management, risk
Management, and operations to ensure sustainability and engage in responsible finance
practices both in terms of staff training and financial awareness for its customers.






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Promoting sustainability
In all of IFCs work in agribusiness, sustainability is a business driver for the clients and
partners. IFC has worked on developing and supporting the implementation of innovative
Projects to deal with the challenges of reducing water tables and other environmental
Vulnerabilities in South Asia. The focus is specifically around tackling water scarcity and
Climate change impacts while also supporting companies to meet market challenges by
adopting higher food standards.
Addressing Water Security in Agriculture
By 2025, two-thirds of the worlds population will live in water-stressed conditions. Water
footprint assessments help companies reduce water-related risks, improve water efficiency,
and mitigate social and environmental impact. IFC worked with Jain Irrigation Systems to
conduct a water footprint assessment. This was the first time that a business conducted such
an assessment in a developing country, paving the way for similar assessments for IFC clients
in other
Water-scarce countries. Jain Irrigation Systems, an India based IFC client is the worlds
largest Manufacturer of drip irrigation systems and operates in an area where water
Scarcity is a major issue. It is also the worlds largest producer of mango pulp, puree, and
concentrate, and the second largest producer of dehydrated onions. The assessment focused
on water consumption in the production of dehydrated onions and the manufacturing of its
micro-irrigation systems. The assessment revealed that onions grown under drip irrigation
have 42 percent smaller water footprint than those grown using traditional irrigation methods.
IFC partnered with Tata Steel, Tata Power, Tata Motors, and Tata Chemicals to conduct
water footprint assessments and develop a sustainability framework for these Tata group of
companies. IFC used Water Footprint Networks globally acknowledged water footprint
methodology.
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Building Climate Resilient Communities
Nepal produces only 0.025 percent of global greenhouse-gas emissions but its 20 million
farmers, of whom 96 percent are smallholders, are likely to face increased climate variability
and significant water- related stresses. A climate risk assessment carried out at the
community level identified water and food security as the most critical risks. Nepals
agriculture sector
Contributes 35 percent of its gross domestic product and employs 66 percent of the
population. However, high dependence on rain, poor farming practices, and limited access to
finance constrains productivity. IFC, in partnership with the World Bank and the Asian
Development
Bank, has designed a project to address key climate-induced risks and other productivity
constraints faced by farmers and to provide potential solutions. The project will work with
agribusiness lead firms to promote improved agricultural and water management practices. It
will introduce new technologies to help small farmers who produce rice, maize, and
sugarcane adapt to climate change. The project will promote improved seed varieties and
modern agriculture and water practices. These inputs will improve farmers climate change
resilience and productivity. The project will also work with a financial institution to increase
lending farmers and other value chain members.





30

Promoting Water-Efficient Agricultural Production
India is a leading exporter and a primary producer of basmati rice, with over 43 million
hectares under rice cultivation. The sector provides livelihood opportunities for small
landholders. Agriculture in India accounts for 85 percent consumption of the countrys water
resources. Of this, rice is a major water consumer.
Rough estimates of water usage in the sector are pegged at 3,000-5,000 liters per kilogram.
Groundwater extraction for irrigation is leading to alarming depletion rates that places future
agricultural production in states like Haryana at a higher risk. In this scenario, there is a
strong case for efficient in the use of existing water resources. IFC is working with private
sector rice companies to introduce water use-efficiency practices and technologies in their
basmati rice supply chain in the state of Haryana, India. Technologies like direct seeded rice,
which do not have to be transplanted, have demonstrated substantial water saving potential by
eliminating the need for standing water for seed germination. Mechanized operations are also
time and labor-efficient when compared to traditional practices. Similarly, laser leveling
technology to prepare land to near-flatness has reduced water use and has led to higher yields.
This project has helped IFC develop innovative delivery models by creating rural
entrepreneurs who provide farmers access to technologies on a custom-hire basis. These rural
entrepreneurs advise farmers on good agriculture and water management practices, and help
overcome financial and knowledge barriers to technology uptake.
Impact
The program has currently reached over 1,100 farmers in water stressed areas of Haryana
with estimated water savings of 6.3 million cubic meters. Planned interventions over the next
four years will benefit more farmers in the state.
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Data collection
Data has been collected from secondary sources i.e. websites and magazines
Conclusion
The sustainability agenda and its Sustainability Framework have become important
Differentiators for IFC in the marketplace and a pillar of IFCs corporate strategy. Continued
Successful implementation of this framework is therefore a corporate priority. IFC expects
Continued significant interest in this review from external stakeholders and commits to
engage in a constructive and collaborative dialog to fully understand the implications of the
proposed changes to the Sustainability Framework. IFC is mindful that the proposed changes
may have cost and resource implications for our clients, in particular smaller ones.
Bibliography
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http://ifcext.ifc.org/ifcext/pressroom/ifcpressroom.nsf/1f70cd9a07d692d685256ee1001cd
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