Exclusive: World Bank aims to boost lending by 50 percent over 10 years

WASHINGTON Thu Feb 13, 2014 5:38pm EST

A man is silhouetted against the logo of the World Bank at the main venue for the International Monetary Fund (IMF) and World Bank annual meeting in Tokyo October 10, 2012. REUTERS/Kim Kyung-Hoon

A man is silhouetted against the logo of the World Bank at the main venue for the International Monetary Fund (IMF) and World Bank annual meeting in Tokyo October 10, 2012.

Credit: Reuters/Kim Kyung-Hoon

WASHINGTON (Reuters) - The World Bank hopes to boost its lending by 50 percent over 10 years by cutting costs, loosening a restriction on how much it can lend, and charging richer nations higher fees for some services, several people familiar with the matter said.

The bank's board signed off on the plan to raise lending by $100 billion this week, and the details are supposed to be worked out ahead of the spring meetings of the World Bank and the International Monetary Fund in April, said the sources, who were not authorized to speak publicly.

The bank's current loan portfolio is around $200 billion.

The World Bank, a poverty-fighting institution based in Washington, has been undergoing its first major strategic realignment since 1996 to make it more efficient and attuned to what countries need.

Under the new strategy, the bank said it was seeking ways to boost its overall lending portfolio in order to keep itself relevant amid greater competition for development funds.

Middle-income countries, including the bank's five biggest borrowers -- China, Brazil, Turkey, India and Indonesia -- can rely more on private funding and bilateral loans as they grow.

But the bank is betting that these countries, which still have deep pockets of poverty, want access to its advice and experience in areas like the environment and infrastructure. The bank also offers lower rates than the private sector.

The $100 billion lending boost would come specifically from the IBRD, or the International Bank for Reconstruction and Development, the World Bank arm that focuses on reducing poverty in middle-income countries, two of the sources said.

The IBRD gets contributions from each of its 187 member countries. But the World Bank hopes to finance the higher lending itself, including by lowering its loan to equity ratio.

The World Bank also plans to cut $400 million from its administrative budget over the next three years to be able to provide more to its client countries, the bank's chief financial officer told Reuters in October.

(Reporting by Anna Yukhananov; Editing by Leslie Adler)

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Comments (2)
Newsrocket wrote:
Saving face for poor performance at making money available for less than USUARY rates is severely too little too late. The world’s private banking system is working absolutely just fine…for those whose families have been at the trough for 5o years. Time for real…REAL PUBLIC BANKING.

Feb 13, 2014 9:56pm EST  --  Report as abuse
thelaowai wrote:
50% growth over 10 years. so about in line with growth in inflation wow.

Feb 14, 2014 1:07am EST  --  Report as abuse
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