strategy

Providing loans

Synonyms:
Providing credit
Extending loans
Giving loans
Granting loans
Implementation:
The International Bank for Reconstruction and Development (IBRD), commonly known as the World Bank, was established in 1945 and is a specialized agency of United Nations. The IBRD and its affiliates are known as the World Bank Group. The affiliates include the International Development Association (IDA), International Finance END IBRD aims to reduce poverty and promote economic development of member countries by loaning to member governments below conventional rates of interest. As of June 1992, the IBRD had made loans totalling about US$ 218,210 million to help finance over 3,000 operations in over 100 countries and territories. The Bank's lending to regions in 1993 was as follows: Sub-Saharan Africa $47 million; East Asia and Pacific $4,405 million; Middle East and North Africa $1,756 million; Latin America and the Caribbean $5,852 million; Europe and Central Asia $3,740 million; South Asia $1,145 million. The largest share of lending is for agricultural/rural development. As of 30 June 1993, loans totalling $16,945 million were approved for 122 economic development projects and programmes designed to restructure national economies in 44 countries, not including a further estimated $2,100 million from IFC. Interest on loans to developing countries was 7.43% as of August 1993. Outstanding loans usually have a 5-year grace period and must be repaid within 15 to 20 years, though debt restructuring may be opted for heavily indebted countries.

As of 1993, in thirty-three years of operation in Latin America and the Caribbean, the Inter-American Development Bank (IDB) has approved 2,101 loans totalling $63,000 million for projects costing an estimated $170,000 million. Record lending between 1990 and 1993 totalled $21,500 million (or a third of all the bank's lending since operating), 40% of which was allocated to productive sector projects, 33% to 50 infrastructure projects, and 25% to 74 projects in the social sector. During 1990 to 1993, IDB continued to be the region's main source of multilateral funding for small and medium sized countries.

IDB members established the Multilateral Investment Fund (MIF) for the region in 1992. The MIF focuses on human resource development, supporting public policies aimed at expanding private sector participation in national economies, and small enterprise development (facilitated by the Small Enterprise Investment Fund (SEIF)). The MIF emphasizes bringing marginalized groups such as women and the young into the economic mainstream, and cooperates with NGO and private firms in addition to working with governments. The MIF relies upon separate financial subscriptions than the IDB. Over five years, pledged contributions by the current signatures amount to more than $1,200 million.

In 1993, the European Investment Bank (EIB) cofinanced three projects, in Argentina, Costa-Rica, and Jamaica, for a total of $112 million. The Nordic Development Fund (NDF) provided $13.5 million for projects in the Dominican Republic, Jamaica and Nicaragua, and $60 million for a project in Venezuela. The International Fund for Agricultural Development (IFAD) provided $6 million on concessional terms to cofinance a project in the Dominican Republic.

Values:
Credit
Discredit
Subjects:
Credit
Arbitration
Type Classification:
B: Basic universal strategies