International Development Association(IDA)

Introduction
The International Development Association (IDA) is the part of the World Bank that helps the worlds poorest countries. Established in 1960, IDA aims to reduce poverty by providing interest-free credits and grants for programs that boost economic growth, reduce inequalities and improve peoples living conditions. IDA complements the World Banks other lending arm.

 International Bank for Reconstruction and Development(IBRD) which serves middle-income countries with capital investment and advisory services. IDA is one of the largest sources of assistance for the worlds 79 poorest countries,39 of which are in Africa. It is the single largest source of donor funds for basic social services in the poorest countries. DA lends money (known as credits) on concessional I terms.

Formation Type Legal status Purpose /focus Headquarters Membership President of world bank Parent organization

1960 Development finance institution Treaty Development assistance, Poverty reduction Washington, D.C 172 countries Jim Yong Kim World bank group

HISTORY
IBRD was established in 1944 to help Europe recover from the devastation caused by World War II. Success of that enterprise led the Bank, within a few years, to turn its attention to developing countries . By the 1950s- poorest developing countries needed softer terms than those offered by the Bank-afford to borrow the capital they needed to grow. US took the initiative, and a group of the Banks member countries decided to set up an agency that could give financial assistance to the poorest countries on the most favorable terms possible. They called the agency as "International Development Association (IDA).

 Wanted IDA to be run with the discipline of a bank. (world bank) IDA's Articles of Agreement became effective in 1960. The first IDA loans, known as credits, were approved in 1961 to Chile, Honduras, India and Sudan. IDA currently has 172 member countries Members subscribe to IDAs -submitting necessary documentation make required payments under the replenishment arrangements. 35 countries have graduated from IDA throughout its history and some re-entered

 IDA currently has 172 members. Eligibility for IDA support depends on a countrys relative poverty also defined as GNI per capita below an established threshold and the same is updated annually. IDA also supports several small island economies, which although are above the operational cutoff but lack the creditworthiness needed to borrow from IBRD. Some countries, such as India, Indonesia and Pakistan, are IDA-eligible based on their per capita income levels, but at the same time are creditworthy for IBRD borrowing also. These are referred to as blend countries.

MEMBERSHIP

 79 countries are currently eligible to receive IDA assistance. Collectively these countries are home to about 2.5 billion people, which amounts to half of the total population of the developing world.

Functions
Promote world development, increase productivity and standards of leaving in the less developed countries of its membership Assist the International Bank for Reconstruction and Development.

Top 10 IDA borrowers

India Vietnam Tanzania 2578 1429 943

Enthiopia Nigeria
Bangladesh Kenya Uganda Dem.Rep.Congo Ghana

890 890
823 614 480 460 433

LENDING
. IDA credits have maturities ranging from 20, 35 to 40 years with a further grace period of 10 years before repayments of principal begins. IDA funds are allocated to the borrowing countries in relation to their income levels and record of success in managing their economies and their ongoing IDA projects. IDA also provides donor assistance to provide relief to those poor countries that cannot manage their debt-service burden. IDA-financed operations address primary education, basic health services, clean water & sanitation, environmental safeguards, business climate improvements, infrastructure & institutional reform.

FUNDING
IDA is funded largely by funds provided by the governments of its richer member countries. Additional funds also come from IBRD's income and from the borrowers repayments of earlier IDA credits/loans. IDA & India: India is among the top 10 IDA borrowers with $956 million borrowings in the financial year 2009. IDA has assisted India with US $10.1 billion over the past decade through 48 projects. IDA also helped India stabilize its economy in the early 1990s during the economic reforms and accelerate growth through various policy reforms.

Thank you..

Done by group 2