from where does world bank get money?
World bank does funding to so many countries. who is funding the world bank?
- Carol BLv 41 decade agoFavorite Answer
We raise money in several different ways to support the low interest and no interest loans (credits) and grants that the World Bank (IBRD and IDA) offers to developing and poor countries.
IBRD lending to developing countries is primarily financed by selling AAA-rated bonds in the world's financial markets. IBRD bonds are purchased by a wide range of private and institutional investors in North America, Europe and Asia. While IBRD earns a small margin on this lending, the greater proportion of income comes from lending out our own capital. This capital consists of reserves built up over the years and money paid in from the bank's 185 member country shareholders. IBRD income also pays for World Bank operating expenses and has contributed to IDA and debt relief. We maintain strict financial discipline to maintain the AAA status of our bonds and continue to extend financing to developing countries.
Shareholder support is also very important for the Bank. This is reflected in the capital backing we have received from shareholders in meeting their debt service obligations to IBRD. We also have US$178 billion in what is known as "callable capital," which could be drawn from our shareholders as backing, should it ever be needed to meet IBRD obligations for borrowings (bonds) or guarantees. We have never had to call on this resource. For more information on the World Bank's bonds and notes, go to the World Bank Debt Securities.
IDA, the world's largest source of interest-free loans and grant assistance to the poorest countries, is replenished every three years by 40 donor countries. Additional funds are regenerated through repayments of loan principal on 35-to-40-year, no-interest loans, which are then available for re-lending. IDA accounts for nearly 40% of our lending.
- Mr. XLv 71 decade ago
Countries which have extra cash like Japan