Previous Year Question

The International Development Association (IDA) is an institution of the World Bank Group. It was established in 1960 to provide concessional financial assistance, particularly to low-income developing countries.

IDA is administered through the institutional and administrative structure of the International Bank for Reconstruction and Development (IBRD). IBRD and IDA together are commonly referred to as the World Bank. They share their headquarters, staff and overall administrative machinery.

The principal distinction between IBRD and IDA financing is:

• IBRD lends mainly to middle-income countries and creditworthy low-income countries.

• IDA provides grants and highly concessional credits carrying low or zero interest to the poorest eligible countries.

• IDA credits may have long maturity periods and grace periods before repayment begins.

• IDA’s resources are generally replenished every three years through contributions from member governments and other sources.

Why are the other options incorrect?

IFAD is a UN specialised agency and international financial institution concentrating on rural poverty and agricultural development. UNDP is the United Nations development programme, while UNIDO is a UN specialised agency promoting inclusive and sustainable industrial development. None of them administers IDA.