International Development Association facts for kids

Quick facts for kids
International Development Association

Association internationale de développement
IDA logo
Formation	1960; 65 years ago (1960)
Type	Development finance institution
Legal status	Treaty
Purpose	Development assistance, Poverty reduction
Headquarters	Washington, D.C., United States
Membership	174 countries
Parent organization	World Bank Group
Website	worldbank.org/ida

The International Development Association (IDA) is a special part of the World Bank Group. It helps the world's poorest countries. IDA gives out special loans and grants. These are like gifts of money that don't have to be paid back, or loans with very low interest.

IDA was started in 1960. Its main goal is to help countries that are very poor. These countries might have low income per person or find it hard to get regular loans. IDA works with the International Bank for Reconstruction and Development (IBRD). Together, they are often called the World Bank. They share the same leaders and staff.

IDA's main mission is to help reduce poverty. It provides money for development that countries might not get elsewhere. This is because their financial risk is too high for regular banks. IDA wants to help poor nations grow faster and more fairly. This helps them become stronger and reduce poverty.

IDA is the biggest helper for human development projects in poor countries. Between 2000 and 2010, it did a lot of good. It helped train 3 million teachers. It also helped give shots to 310 million children. IDA funded $792 million in loans for small businesses. It built or fixed 118,000 kilometers of roads. It also built or fixed 1,600 bridges. Plus, it helped 113 million people get clean water. It also helped 5.8 million people get better toilets. Since 1960, IDA has given out $238 billion in loans and grants. Many countries have improved enough to no longer need IDA's help.

How IDA Started

In the 1940s and 1950s, many poor countries needed money. But they found it hard to borrow from the International Bank for Reconstruction and Development (IBRD). They needed loans with easier rules.

Around 1949, the US President Harry S. Truman wanted to help developing countries. This was part of his plan to stop them from joining communist countries. His team suggested a new way to give money. It would be a mix of loans and grants. The United Nations and the US government supported this idea. They wanted a program to give special loans to the poorest countries. But the US was busy with the Korean War. It also wasn't sure if more money was needed for development.

Poor countries felt that the Marshall Plan gave a lot of money to Europe. They wanted similar help. In the early 1950s, they asked the United Nations to create a new agency. This agency would offer advice and easy loans. They wanted each country to have one vote, like in the UN. But the US did not agree with this idea.

As the Cold War grew, the US changed its mind a bit. In 1954, it supported the idea of the International Finance Corporation (IFC). The IFC started in 1956. But poor countries still wanted a way to get easy loans. The idea grew popular within the IBRD.

The head of the IBRD, Eugene R. Black, Sr., started talking about an International Development Association. This was different from a UN-led fund. A US senator, A. S. Mike Monroney, also supported this idea. He suggested studying how to create an IDA linked to the IBRD. This idea was more popular in the US. The US Senate approved it in 1958. Other countries were also asked to study it. In 1959, the World Bank approved plans to create IDA.

By January 1960, fifteen countries signed the agreement to start IDA. It officially began in September 1960. It had an initial budget of $913 million. This would be about $7.1 billion today. In the next eight months, IDA grew to 51 member countries. It loaned $101 million to four developing countries.

How IDA Works

IDA is run by the World Bank's Board of Governors. This group meets once a year. Each member country sends one governor, usually their finance minister. The governors let a smaller group, the Board of Directors, handle daily tasks. This board has 25 directors. The president of the World Bank Group leads them. These directors represent all 187 World Bank member countries. But decisions about IDA only affect its 172 member countries.

The president guides IDA's overall work. As of May 2024, Ajay Banga is the President of the World Bank Group. IDA and IBRD share about 10,000 employees.

An independent group checks IDA's work. In 2009, they found some weak spots in preventing fraud. In 2011, they suggested ways to improve how IDA works with countries. They also said IDA should help countries lead their own development efforts. Experts like William Easterly have said that IDA is very open and uses good practices.

Some researchers think that fewer countries will need IDA's help by 2025. This is because many will have improved. Most remaining countries needing help will be in Africa. This means IDA will need to think about its future plans.

Who Belongs to IDA

International Development Association member states

IDA has 173 member countries. These countries give money every three years to keep IDA's funds full. Samoa joined as the 173rd member in 2008. IDA lends money to 75 countries. More than half of these (39) are in Africa. Only countries that are members of the World Bank can join IDA. Over time, 44 countries have improved enough to stop borrowing from IDA. But 9 of these countries later needed help again.

To get help from IDA, countries are checked for poverty. They also need to show they can't get loans easily from other places. IDA looks at their income per person. It also checks if they can get money from private banks. And it looks at how well they are making changes to help their economy grow and reduce poverty. As of 2019, a country's income per person must be less than $1,145 to get IDA's special loans.

Countries Getting IDA Loans

Here are the 75 countries that currently get loans from IDA:

Countries That No Longer Need IDA Loans

These countries have improved enough that they no longer need loans from IDA:

Countries That Needed IDA Loans Again

These countries had improved but later needed IDA's help again. Some are now "blend countries," meaning they get some IDA help and some regular IBRD loans.

•  Cameroon (1994)
•  Congo (1994)
•  Cote d'Ivoire (1992)
•  Honduras (1991)
•  Nicaragua (1991)
•  Nigeria (1989)
•  Papua New Guinea (2003, partially eligible)
• Syria (2017)
•  Zimbabwe (1992)

How IDA Gets Its Money

IDA is special because it needs new money all the time. Member countries give money every three years. The IBRD and IFC also add funds. While the IBRD gets most of its money from financial markets, IDA relies on countries' donations. IDA received $3 billion USD from the IBRD and IFC.

About half of IDA's money comes from 45 donating countries. In the past, the United Kingdom and United States gave most of the money. But other rich countries started to help more. Every three years, countries that give money meet to refill IDA's funds. The main donors are the United States, Japan, France, Germany, and the United Kingdom. The US gives 58%, France 22%, and the UK 8%. As of 2025, there have been 21 times IDA's funds have been refilled. In the 16th refill, 51 countries gave $49.3 billion USD.

IDA loans are usually not given all at once. The money is given out as needed for a project. Many donor countries, like the US, give "letters of credit" to IDA. These are like promises of money that don't earn interest. IDA uses these promises to get cash when it needs to pay for projects. Other countries pay their full share right away. This helps IDA cover its running costs. Donors do not get their money back. When countries repay their loans, that money is then loaned out again for new projects.

Getting money for IDA is not always easy. When donor countries meet, they often discuss IDA's goals. Sometimes, there are delays in getting money approved, especially in the US Congress. To make sure money comes in, IDA members set a rule. A certain amount of voting power (85%) is needed for funds to be released. This rule was meant to make sure the US participated. But it also gave the US a lot of power. The US could stop funding talks if it didn't agree. This allowed the US to push for its own foreign policy goals.

What IDA Loans Are For

IBRD loans and IDA credits in 2005

IDA gives loans to help countries build things like roads and schools. It also helps improve healthcare, clean water, and sanitation. And it helps with protecting the environment. IDA is known as the "soft lending window" of the World Bank. This means its loans are easier to get and pay back.

IDA offers grants and loans that can be paid back over 25 to 40 years. Countries get 5 to 10 years before they have to start paying. Interest rates are very low, either 2.8% or 1.25%. This depends on whether the country also gets regular IBRD loans. The poorest countries get loans with no interest at all.

Countries that use their money well get more help. IDA uses a special score to see how well a country is doing. This score looks at how a country manages its policies to help growth and reduce poverty. IDA gives more money to countries that show they are doing well. In 2007, IDA created a "Crisis Response Window." This helps countries get money quickly during emergencies. In 2011, it added an "Immediate Response Mechanism." This lets countries get their loan money faster if a crisis happens.

Helping Africa

Many African countries are very poor. Because of this, IDA gives about half of its money to projects in Africa. As of 2012, IDA's work in Africa has helped a lot. Since 1997, 66 million more Africans have electricity. Since 2002, 240,000 kilometers of paved roads have been built or fixed. Also, 15 million more African children are in school. In May 2012, IDA approved $50 million for a project in Ethiopia. This project helps women start businesses or get skilled jobs. IDA's large funding in Africa has led to good results, especially in farming and building roads.

Helping Asia

IDA has been very successful in Asia. Many Asian countries, like the Philippines, China, South Korea, Thailand, and India, no longer need IDA loans. About 20 of the countries still borrowing from IDA are in Asia. In South Asia, IDA focuses on education, healthcare, transport, farming, and energy.

Some parts of Asia have seen poverty grow because of fast population growth. To help with this, IDA made a plan. It set up groups to improve education and healthcare. The goal is to reduce poverty in ways that fit each country's culture.

See also

• Bretton Woods system
• United Nations Development Programme