Operations and Policies of International Public Lending Agencies in Relation to Industrial Development Banks
As has already been noted, each of the major external public lending agencies (the World Bank Group, AID, IDB, and the Eximbank) has provided financial and technical assistance to industrial development banks, and all of them with the exception of the Eximbank have actively promoted their establishment. The nature and degree of participation in these activities differ substantially among the external financing agencies. This is a reflection partly of differing approaches and philosophies and partly of the functions and of the amounts and types of resources, both financial and technical, available to the external agencies. While AID has provided the largest volume of financing to industrial development banks, both in dollars and in local currencies, the IDB has made available the largest proportion of its total loans to intermediate credit institutions. Thus, for example, as of December 31, 1964, about one third of the IDB's loans from its Ordinary Capital Resources and nearly 40 per cent of its loans from the Fund for Special Operations had been made to intermediate credit institutions for re-lending to private enterprise, with the ultimate borrowers about equally divided between industry and agriculture. The World Bank Group has provided financial and technical assistance in this field almost entirely to private development banks, whereas the other external institutions have assisted both privately and publicly owned development financing institutions. The IFC has provided equity financing to industrial development banks, but such financing has not been available from the other external agencies.
In the following sections, we shall discuss the operations and policies of these external agencies with respect to industrial development banks under the following headings: 1) approaches to industrial development banking; 2) terms and conditions of external financing; and 3) conditions relating to sub-loans and equities.
Data on loan and equity investments of the major external public lending agencies in industrial development banks are summarized by external lending agency in Appendix A, Table 4. The compilation of these data is complicated by a certain amount of ambiguity in the concept of an industrial development bank, arising partly because some institutions serve more than one function, and partly because external lending agencies frequently employ a government development institution such as the Nacional Financiera of Mexico or CORFO of Chile as an instrument through which loans are made for specific projects which the external