Differences between World bank and IDA

The World bank and the International Development Association (IDA) are complementary international financial institutions, both providing development assistance to member countries.

They have played a pivotal role in the economic development of the countries and chiefly contributed to the expansion of international trade. But these two institutions differ from each other in the manner of granting assistance to member countries.

World Bank vs International Development Association

World Bank vs International Development Association

Differences between World bank and IDA

The following are the differences between World bank and IDA in terms of lending operations and conditions imposed while granting assistance to member countries.

Period of credit:

IDA provides assistance to member countries on more flexible terms than the World Bank. The period of credit extended by the IDA is 5 to 15 years or even more. Poorer countries are given loans repayable over 40 years or more.

Repayment of loans:

The repayment of IDA loans begins after a long grace period of 10 years. But in the case of the World Bank, it is very short.

Interest Rate:

The World Bank loan is extended at the interest rates consistent with market rate. But the interest rate is very low in case of IDA loans covering only the administrative charges.

Form of repayment:

World Bank loan is required to be repaid in terms of Special Drawing Rights (SDRs) or in terms of one of the principal currencies. The IDA loans are repayable even in terms of local currency. So, the borrowers are relieved from the botheration of arranging the scarce foreign exchange for the repayment of IDA loans.

Guarantee:

The World Bank loan requires the guarantee of the Government of the member nation while lending loans. In the case of IDA, there is no insistence upon any guarantee.

Conditions of loan:

World Bank loan is extended for specified projects and the credit worthiness of the borrowing country is taken into account. The IDA does not impose such conditions.

Leave a Reply




Recent Posts


Related pages


mixed economy of welfarembo controlparticipative leadership style advantages and disadvantageswhat is autocratic leadershipwhat is lifting the veil of incorporation in company lawinter firm meaninginco terms meaningtypes of nonprobability samplingfull form of eximdefinition of wageringwhat are the five essential elements of an enforceable contractbounties meaningthe disadvantages of socialismvci capitalmerchant banking definitionconglomerate merger examplewhat is a diseconomy of scaleadvantages and disadvantages of quota samplingwhat is lifting the veil of incorporation in company lawconglomerate merger exampledefinition of centralisation and decentralisationadvantages and disadvantages of radio advertisingmeasuring employee moralesoundplan essentialadvantages and disadvantages of incremental budgetingdisadvantages of irrinventory turnover ratio explanationdefinition urbanizationmeaning of budgetary controlimportance of deficit financingpayback period problemsdisadvantages of simple random samplingsales ledgerssalient features of joint stock companytarget costing approachdefine bankerswhat are the advantages of socialismformula of inventory turnover ratioteeming and lading fraudaptech meaningwhat is iou in accountingformula for stock turnover ratiodebt to capitalization ratiofinancial intermediaries functionsdefine bankerstaylor's theory of scientific managementserviceblueprintstraight numeric filing system for medical recordswhat is secured debentureadvantages and disadvantages of indirect marketingdebtors collection period definitionbuyer beware principlewhat is the difference between lessor and lesseemeaning of bailmentinternet demeritscalculate inventory turnover rationon probability methods of samplingdeductive method in economicscrisil rating symbolsplanned socialist economypayback period method in capital budgetingcore product augmented productpv calculation formulaoverheads business definitionleverage gearing ratioautocratic leadership examples in sportwhat is autocratic leadershipabsolute assignment of life insurance policywhat is deductive and inductive approachdeductive inductive methodactivity based costing management accountingsebi was set up inspecial relationship between banker and customerabc costing advantagesadvantages of deductive methodachievements of gattcost oriented pricing methods