Loan costs set to rise

15 April 1998

Borrowers from the International Bank for Reconstruction and Development (IBRD), the main World Bank lending arm, may have to pay higher charges for their loans in the future. IBRD net income – used to cover administrative costs as well as some of the Bank’s concessional lending, and special activities such as the Heavily Indebted Poor Country Debt Initiative – has fallen in recent years.

While some developing country governments are sceptical, most seem to support an increase in charges and the possible elimination of an interest waiver on existing loans, to bring them into line with interest rates charged by the regional development banks. Executive Directors have three months to agree concrete proposals.