India largest borrower of IDA, which helps poorest countries

India has become the largest borrower from the International Development Association (IDA), the soft loan affiliate of the World Bank, which helps the world’s poorest countries, with a total borrowing of $2,578 million.

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).

Among the states in the country, Tamil Nadu is now the largest borrower from the World Bank, with an exposure of $2.1 billion spread over six projects.

Established in 1960, the IDA aims to reduce poverty by providing interest-free credits and grants for programs that boost economic growth, reduce inequalities and improve people’s living conditions. It is the largest sources of assistance for the world’s 79 poorest countries, 39 of which are in Africa. It is also the single largest source of donor funds for basic social services in the poorest countries.

Since its inception, IDA credits and grants have totalled $222 billion, averaging $13 billion a year in recent years and directing the largest share, about 50 per cent, to Africa.

According to the bank’s FY10 Top Ten IDA borrowing countries, India tops the table with $2,578 million, followed by Vietnam ($1,429 million), Tanzania ($943 million), Ethiopia and Nigeria with $890 million each, Bangladesh ($828 million), Kenya ($614 million), Uganda ($480 million), Democratic Republic of Congo ($460 million) and Ghana ($433 million).

IDA lends money (known as credits) on concessional terms. This means IDA credits have no interest charge and repayments are stretched over 35 to 40 years, including a 10-year grace period. IDA also provides grants to countries at risk of debt distress.

As for IBRD loans and India, the bank’s $21.9-billion portfolio in the country covers 77 active investment projects.