INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA )

IDA was established in 1960 as an affiliate to the World Bank. The International Development Association (IDA) is an international financial institution which offers concessional loans and grants to the world's poorest developing countries. The IDA is a member of the World Bank Group and is headquartered in Washington, D.C., United States

It was established to complement the existing International Bank for Reconstruction and Development by lending to developing countries which suffer from the lowest gross national income, from troubled creditworthiness, or from the lowest per capita income. Together, the International Development Association and International Bank for Reconstruction and Development are collectively known as the World Bank, as they follow the same executive leadership and operate with the same staff.

The World banks finance is conditional & inadequately meets the requirements of the under developed countries. Its loans are for specific purposes and bear a high rate of interest. The IDA was started to supplement the World Banks assistance .

To provide development finance to the less developed countries on easy and flexible terms. To promote economic development, increase productivity and raise standard of living. To supplement the activities & objectives of World Bank.

The membership of IDA is open to all the members of the World Bank. The members of IDA are divided into 2 parts: Part I countries are developed countries which are required to pay their subscription in gold or freely convertible currencies. Part II countries are less developed countries which are required to pay only 10% of their subscription in gold or freely convertible currencies & the remaining 90% is payable in domestic currencies. India falls in Part II.

The IDA is governed by the World Bank's Board of Governors which meets annually and consists of one governor per member country. The Board of Governors delegates most of its authority over daily matters such as lending and operations to the Board of Directors. The Board of Directors consists of 25 executive directors and is chaired by the President of the World Bank Group.

The executive directors collectively represent all 187 member states of the World Bank, although decisions regarding IDA matters concern only the IDA's 172 member states. The president oversees the IDA's overall direction and daily operations. As of July 2012, Jim Yong Kim serves as the President of the World Bank Group. The association and IBRD operate with a staff of approximately 10,000 employees.

 The IDA grants loans for projects whether they

are productive or not. The IDA loans are interest free; only a nominal rate of 3.4% on the amounts withdrawn & outstanding is charged to meet the expenses. The loans are for long periods i.e for 50 years. There is a 10 years of grace and no amount is repayable during this period. After this only 1% of the principal is to be repaid annually for 10 years & 3% annually for the remaining 30 years.

 IDA loans are repaid in foreign exchange.

IDA loans are granted to the government of

the country concerned.

General Progress: The IDA is a symbol of multilateral cooperation & worldwide commitment to development. It has made a great contribution to economic development by granting soft loans to the less developed countries. Most of its infrastructure has gone to the development of infrastructure. The IDA has granted loans worth 47766 million dollars.

1980 Member Countries 121

1985 133

1988 137

Usable Resources
Credits Approved Disbursements Operations Approved

20773
3838 1411 103

33295
3028 2491 105

48665
4459 3397 99

INDIA VIETNAM

2578 1429

TANZANIA
ETHOPIA NIGERIA BANGLADESH KENYA UGANDA

943
890 890 828 649 480

INFRASTRUCTURE SOCIAL SECTOR INDUSTRY PUBLIC ADMIN AND LAW AGRICULTURE FINANCE

37% 29% 2% 18% 8% 5%

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 Ccredits/loans.

The IDA gives special attention to the poorest countries whose per capita income is less than $425. The assistance to these countries has gradually increased during the years.

India has become the largest borrower from the International Development Association (IDA). India is also now the third largest borrower of the International Bank for Reconstruction and Development (the World Bank), with a total portfolio of $21.9 billion (Rs 98,590 crore). The IDAs assistance to India has been for financing the projects like construction of national highway, river valley projects, sinking tubewells, rural electrification, railways & telecom.

IDA has assisted India with US $ 10.1 billion over the past decade through 48 projects. IDA has also helped India in stabilising its economy in the early 1990s during the economic reforms and accelerate the growth through various policy reforms.

Focuses on the main challenges going forward and how IDA is gearing up to address them. IDA will have to adapt and intensify its efforts in four main areas:

strengthening complimentarily with vertical approaches to aid delivery; (ii) ensuring appropriate sectoral funding; (iii) addressing critical global challenges with an increased priority given to climate change; (iv) and enhancing alignment and harmonization.

IDA is also in the process of reforming and modernizing its operational policies, designed to improve its operational effectiveness and thus its ability to meet the challenges that are outlined.

THANK YOU !!