Why was the International Development Association created? What is the purpose of the IDA? Do you think its loan guidelines are fair? Why or why not?

What will be an ideal response?

It was created after poor countries complained that the World Bank's hard loan policy made it difficult for them to obtain World Bank loans. The IDA offers soft loans, loans that bear some significant risk of not being repaid. IDA loans carry no interest rate, although the IDA collects a small service charge (currently 0.75 percent) from borrowers. The loans also have long maturities (normally 35 to 40 years), and borrowers are often granted a 10-year grace period before they need to begin repaying their loans. The IDA's lending efforts focus on the least developed countries.