MICROCAPITAL BRIEF: World Bank Approves $300m Loan to Small Industries Development Bank of India (SIDBI) and $107m to Indian Government to Improve Statistics

The World Bank has approved a USD 300 million loan from the Scaling Up Sustainable and Responsible Microfinance Project to the Small Industries Development Bank of India (SIDBI) and a USD 107 million loan from the Statistical Strengthening Loan Program to the national government of India [1]. The loan to SIDBI for on-lending to microfinance institutions follows closely on the heels of a USD 200 million loan for the same purpose that was covered by MicroCapital earlier this month (https://www.microcapital.org/microcapital-brief-world-bank-approves-200m-…). The current USD 300 million loan is divided into two parts, each funded by a division of the World Bank: USD 100 million will come from the International Development Association (IDA), and the remaining USD 200 million will come from the International Bank for Reconstruction and Development (IBRD). The loan from IDA will carry 0.75 percent interest with a ten-year grace period and a term of 35 years. The loan from IBRD will have a term of 25 years with a 14.5-year grace period. The interest rate on this loan is not available.

The Statistical Strengthening Loan Program will “support an institutional and policy based reform of the Government of India for strengthening state statistical systems within a national policy framework.” It will additionally “enable states and union territories to make progress towards common national standards relating to key statistical activities and to improve the credibility, timeliness and accuracy of these and other statistics at both central and the state levels” [1]. The loan from the Statistical Strengthening Loan Program is also funded by IBRD and has a 30-year maturity with a 5-year grace period.

By Julia Korn, Research Associate

About The World Bank:

The World Bank Group consists of five closely associated institutions, all owned by member countries that carry ultimate decision-making power. Each institution plays a distinct role in the Group’s mission to fight poverty and improve living standards for people in the developing world. The World Bank Group encompasses the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).

About The Small Industries Development Bank of India (SIDBI):

The Small Industries Development Bank of India (SIDBI) was established by the Indian Parliament in 1990. It provides credit to large- and medium-scale microfinance institutions (MFIs). SIDBI reports having facilitated total financial assistance equivalent to USD 397 million during the fiscal year ending March 2009. This amount has gone toward various ventures such as term loans, equity support, and capacity building grants to MFIs. SIDBI is listed on, but does not report data to, the MIX Market.

About The International Development Association (IDA):

Established in 1960, The International Development Association (IDA) is the arm of the World Bank that provides interest-free credits and grants for programs in the world’s poorest countries. Loans from IDA have repayment terms stretching over 35 to 40 years, including a 10-year grace period. IDA also provides grants to countries at risk of debt distress. IDA provides assistance to 79 of the world’s poorest countries, 39 of which are in Africa. From 1960 to 2009, IDA has provided USD 207 billion in credits and grants, with about 50 percent directed to Africa.

About The International Bank for Reconstruction and Development (IBRD):

Founded in 1944 to help Europe recover from World War II, the International Bank for Reconstruction and Development (IBRD) is one of five institutions that make up the World Bank Group. IBRD is the part of the World Bank (IBRD/IDA) that works with middle-income and creditworthy poorer countries to promote sustainable, equitable and job-creating growth, reduce poverty and address issues of regional and global importance. IBRD operates with 186 member countries.

Sources and Additional Resources:

[1] The World Bank. “World Bank Supports Microfinance, Statistical Strengthening in India” on June 1, 2010. http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIA

[2] MicroCapital. “MICROCAPITAL BRIEF: World Bank Approves $200m Loan to Small Industries Development Bank of India (SIDBI) For Microfinance Institutions (MFIs) in India” by Julia Korn on June 3, 2010. https://www.microcapital.org/microcapital-brief-world-bank-approves-200m-

MicroCapital Universe: World Bank Group. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The

MicroCapital Universe: The Small Industries Development Bank of India. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sma

MicroCapital Universe: International Development Association.
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Int

MicroCapital Universe: The International Bank for Reconstruction and Development (IBRD). https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Int

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