In 1947, at the of Independence, there was a significant demand for new capital but the Indian Capital Market was relatively under-developed. Merchant bankers and underwriting firms were almost non existence and commercial banks were not quipped to provide long term industrial finance in any significant manner.
- The Industrial Finance Corporation of India (IFCI) was established on July 1, 1948.
- IFCI was the first Development Financial Institution (DFI) in India.
- IFCI was established to cater to the long-term finance needs of the industrial sector.
- Until the establishment of ICICI and IDBI, The IFCI remained solely responsible for implementation of the government’s industrial policy.
- Some of the sector that benefited from IFCI include – Textiles, paper, sugar, hotels, hospitals, iron and steel, fertilizers, basic chemicals, cement, power generation etc.