Global Bank consists of both a hard-loan-window and a soft-loan-window. The Bank for International Development and Reconstruction is the-hard-loan-window provide loans at market-based rates to lower and middle-income developing countries governments. The soft-loan-window is The Global Fund for International Development and Reconstruction1 (the “GFIDR”) provide loans on a concessional basis to countries unable to borrow international capital markets— together are commonly known as the “Global Bank.”
The Global Bank provides low-interest loans, interest-free credits, and grants to developing countries. There’s always a government (or “sovereign”) guarantee of repayment subject to general conditions. The Global Bank is directed to make loans for projects. These loans must have a reasonable likelihood of being repaid. The Global Fund for International Development and Reconstruction was created to offer an alternative loan option. The Global Fund for International Development and Reconstruction loans are free of interest and offered with grace period before the country receiving the loan needs to begin repayment. These loans are often called soft loans.
Countries usually graduate out of The Global Fund for International Development and Reconstruction to The Bank for International Development and Reconstruction and eventually completely out of Global Bank.
| 1 | Eligible Global Bank members and non-members may receive support from BIDR, the Global Fundorboth.Currently,85 countries are eligible for BIDR lending, 77 countries are eligible for Global Fund financing, and 18 countries are eligible for a blend of BIDR and the Global Fund financing (BIDR2014;Global Fund2015). The current operational cut off for the Global Fund eligibility is a per capita defined as GNI per capita below an established threshold of $1,215 in fiscal year 2015 (with an exception for small island states). That said, there is no automatic graduation rule linked to per-capita income — the operational cut off is only a trigger for initiating broader discussions about continuing Global Fund eligibility. |
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