Functions of International Development Association
The International Development Association (IDA) is also a subsidiary of the World Bank. IDA is also known as the World Bank’s “Fund for the Poorest.” It was established on 24 September 1960. The International Development Association is headquartered in Washington. The number of its member countries is 173. IDA provides concessional loans to the world’s poorest countries. The primary Functions of International Development Association is to reduce poverty by providing easy loans to the poorest countries.
15 countries signed the articles of agreement in January 1960 with an initial budget of $913 million. The member of countries increased to 51 within 8 months of its launch. Only that countries can be a member of IDA who is already the member of the World Bank.
The International Development Association is governed by the World Bank’s board of governors only. The IDA’s member countries (173) pay their contributions every three years. IDA lends only those countries whose gross national income (GNP) per capita should not exceed $1175 (As of 2012). It lends the highest number of countries in Africa (81). African countries have the most severe poverty and underdevelopment.
The IDA was established on 24 September 1960.
Aim and Objective of the International Development Association:
The Aim of IDA is to help the poorest countries in developing more quickly and to reduce poverty. The International Development Association’s aim to provide development financing whose credit risk is in trouble and the gross national income and per capita income are the lowest. It’s the largest loan provider institution for economic and human development projects in the poorest countries. Actually, these countries can’t afford to borrow from the Banks or other commercial institutions.
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The prime developmental area of IDA is infrastructural, Institutional development and technical support. IDA is also encouraging the donors to help the developing countries. IDA has supported more than 110 countries through grants, interest-free loans, and long-term loans.
The main objective of the establishment of the International Development Association is to provide credit to semi-developed and developing countries. The institution provides loan on easy terms. The purpose of the loan is to improve the living standard by increasing the economic growth rate of these countries.
The International Development Association is headquartered in Washington.
Easy Debt Window:
The International Development Association lends money on concessional terms. It provides loan on Zero interest or very low-interest charges. The re-payment is also stretched over 25 to 30 years of tenure. IDA also provides debt relief fund through the Heavily indebted poor countries (HIPC).
The International Development Association is also called the World Bank’s “Easy Debt Window.”
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The facts related to International Development Association:
- The International Development Association established on 24 September 1960.
- The International Development Association (IDA) provides the loan to the 75 poorest countries. 39 countries are included in these poorest countries from Africa only.
- IDA is getting fund by its member countries. All donors meet once every three years.
- IDA comprises by the board of governors of all 173 countries.
- IDA lends the highest number of countries in Africa which is 81.
- The International Development Association is ranked as one of the top 5 most transparent development aid organization.
The International Development Association launched with initial funding of $912.7 in 1960.
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