World Bank Announces Low-Interest Loans to Poorest Countries
(3Bl Media/Justmeans) - Rich and emerging countries have committed $52 billion over a period of three years to help the poorest countries in the world. The money will be put into a World Bank fund which accepts loans instead of grants to encourage donations in a continuing tough economic climate.
The amount represents an increase of five percent since it was last topped up in 2010. IDA is the World Bank’s main instrument to tackle extreme poverty and boosting shared prosperity in the world’s poorest countries, where almost one billion people live on less than $1.25 per day.
The funding will allow IDA to "deliver customized and innovative solutions to help the poorest countries address their most pressing development challenges ," said the Bank in a statement. The top-up was agreed upon due to consensus that those countries need an injection of funds to deal with conflict-induced fragility, to promote private sector mobilization, sustainability and gender equality.
In practical terms, the investment is expected to bring electricity to an estimated 15-20 million people, vaccines for 200 million children, microfinance loans for more than one million women, and basic health services for 65 million people.
It is estimated that 32 million people will benefit from access to clean water and another 5.6 million from better sanitation facilities. A total of 46 countries pledged to IDA, and the World Bank Group will also contribute from its own resources to the organization. IBRD and IFC are providing close to $3 billion to IDA over the next three years.
Advocacy and development agency Oxfam welcomed the news but added that loans should be avoided in the future. It said in a statement that loans should be a temporary fix and not a permanent way of helping the poor. It also welcomed the Bank’s announcement that it will focus more attention on fragile states.
Image credit: The World Bank