Which World Bank Group institution provides concessional loans and grants to the world’s poorest countries?

The International Development Association (IDA) is the World Bank Group institution that provides concessional loans and grants to the world’s poorest countries.

Founded in 1960, IDA was created to extend development financing on more favorable terms than ordinary loans. Its support can include very low-interest or interest-free credits, grants, and assistance for projects involving health, education, infrastructure, poverty reduction, and climate resilience.

IDA’s resources are replenished through contributions from wealthier member countries, repayments from earlier credits, and transfers from other World Bank Group institutions. Eligibility is mainly based on a country’s relative poverty and limited ability to borrow on standard market terms, although other factors can also apply.

IDA is often confused with the International Bank for Reconstruction and Development, or IBRD. IBRD lends primarily to middle-income and creditworthy lower-income countries on non-concessional terms, while IDA focuses on the poorest eligible economies. Together, IDA and IBRD are commonly referred to as the World Bank.