ICFC Today
CBE By the Rt. Hon. LORD PIERCY, To look at ICFC today, it is, 1 think, neces- sary to examine first its yesterday. In other words, the Corporation's growth and develop- ment since it was formed, which are the base of its functioning today.
The English and Scottish joint-stock banks set up the Industrial and Commercial Finance Cor- poration Limited in 1945, with resources of £45 million. The idea was that there was a gap in the country's financial structure. This was the lack of capital funds for small- and medium-sized companies. In short, these companies could get short-term credit from the banks, but could not, because of their size, obtain funds through the Stock Exchanges. For development which re- quired long-term funds—for the purchase of plant, factory extension and so forth—they were, therefore, in a difficult situation. This was pointed out in the Macmillan Report of 1931, but it was only in 1945, with post-war recon- struction in mind, that the climate was right for a venture of this size. The banks had the courage to take the plunge, and ICFC was established.
I believe that the banks were right, and, if they had any doubts themselves, these have no doubt been put to rest by the way in which ICFC has developed: £94 million have, to date, been lent to, or invested in, over 1,200 businesses.
The record of growth has been steady, build- ing up slowly at first. It has to be remembered that, in 1945, ICFC had no home, a handful of staff and certainly no business. We worked at
first from a few rooms in a chartered accoun- tant's office in the City, with, 1 recollect, one telephone between us! After a time we were able to take offices of our own, and engage more staff.
By 1951 we realised that we were going to find it difficult to gain the confidence of the businessman from our pedestal in the City. So we opened a branch in Birmingham, and found the Black Country a rich source of business. Today we have nine branches, including London, and these are manned by experienced men trained at head office. These branches are our nerve centres, not only for gathering business, but for keeping us in close touch with industry in operation, as opposed to industry seen in balance sheets. Another aspect which we have developed to a high degree, with a similar ob- jective, is technical investigation. We have built up an industrial division comprising engineers and experts in management techniques, property valuation and so forth. This means that we our- selves can assess the business and trading acumen of prospective customers.
ICFC makes no bones about being a commer- cial undertaking, but it is not out to limit its investment to the most promising, fastest-growing and most profitable propositions. To a consider- able degree it is a public institution, without in any way being eleemosynary. It has its yard- sticks, proved by experience, but it can, and does, lend amounts from £5,000 to £200,000 or more to any eligible applicant; and perhaps its main criterion is whether or not the applicant com- pany can use the facilities to advantage. This point is very important, since, as a matter of policy, the Corporation does not believe in inter- fering with management or the day-to-day run- ning of a business.
All our transactions are confidential, of course; but there are occasions when a customer will give us permission to feature his success in our annual accounts, or will invite us to participate in his great occasions. such as the opening of a new building. 1 am convinced that these are the things that have humanised ICFC.
The image which ICFC has created is that impression of it which the present-clay applicant company recognises. This is founded upon the following: (a) ICFC does not interfere in management, or meddle in the running of the businesses it finances (b) It cuts expenses to the customer to the lowest possible point. Its rates are those current for long-term capital. and they are charged on the outstanding amount only.
(c) Any scheme of finance which ICFC proposes is tailor-made for the circumstances of the applicant. e.g.. with regard to repayment, which can be spread over ten to twenty years.
(d) ICFC keeps in touch with the customer. and can often help it in one way or another with advice. if required.
Today we are doing the same job we started out to do, but with no diminution of energy or initiative, and with the experience of eighteen years behind us. I believe that ICFC fulfils an economic function in stimulating industrial enter- prise by providing the means for development.
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