Lending




The IDA lends to countries with the aim to finance projects that will develop infrastructure and improve education, healthcare, access to clean water and sanitation facilities, and environmental responsibility. It is considered to be the soft lending window of the World Bank, while the IBRD is considered to be the hard lending window. The association offers grants and loans with maturities ranging from 25 to 40 years, grace periods of 5 to 10 years, and interest rates of 2.8% or 1.25% depending on whether the borrower is a blend country and to which degree it is eligible. Regular IDA-eligible borrowers may take advantage of no-interest loans. Financial resources are allocated to eligible countries based on their success at implementing pro-growth and a poverty-reducing domestic policies. The IDA uses the World Bank's Country Policy and Institutional Assessment (CPIA) development indicator to determine each country's place in a resource allocation index. It then prioritizes its lending to those countries which are indicated to be most promising in terms of favorable policies and aid effectiveness. The IDA adopted the Crisis Response Window in 2007 to enable the rapid provision of emergency financing in response to crises. The association adopted the Immediate Response Mechanism in 2011 to provide IDA borrowers with immediate access to withdraw undisbursed portions of their loans, should a crisis arise that meets the mechanism's criteria.

The replenishment rounds are typically agreed every three years . The eighteenth was finalised in December 2016, the nineteenth was being discussed in October 2019.

Africaedit

Because African countries face some of the most severe poverty and underdevelopment, and because 39 of those countries are the IDA's poorest member states, the association allocates approximately half of the IDA's resources toward financing projects in those countries. As a result of its efforts to improve the region, the IDA has helped bring electricity to an additional 66 million Africans since 1997, helped build or restore 240,000 kilometers of paved roads, and helped enroll an additional 15 million African children in school since 2002. The IDA was approved in May 2012 to provide US$50 million worth of credit to the Women Entrepreneur Development Project as part of an effort to help women in Ethiopia participate in business as skilled employees or leaders. Although the positive outcomes of the IDA's efforts in Africa had been historically slow, the large allocation of funding to African countries led to positive outcomes particularly within agriculture and infrastructure development efforts.

Asiaedit

The IDA's efforts in Asia have been particularly successful. Numerous Asian countries have graduated from the IDA lending program, including the Philippines, China, South Korea, Thailand, and India. Of the association's borrowing countries, approximately 20 are in Asia. The association's efforts in South Asia have focused primarily on projects for education, healthcare, transportation, agriculture, and energy. Due to rapid growth in Asian countries' populations, some pockets of poverty have emerged. To mitigate this effect, the IDA adopted an economic plan of action which established organizations to improve education and healthcare, with a focus on reducing poverty across Asian nations in ways that are compatible with local culture.

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