Question
How does a country determined which of these organizations to approach for funds. If these institutions are always availed to receive. Some countries are not going through these structures rather they borrow directly from the bank of another country. Which is better?
The choice of where to borrow from will depend on the purpose for which the loan is required. How does a country determined which of these organizations to approach for funds. If these institutions are always availed to receive. Some countries are not going through these structures rather they borrow directly from the bank of another country. Which is better?
The IMF, World Bank and other lenders have requirements that make borrowers eligible for a loan.
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The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects.
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Typically, a country’s government and the IMF agree on a program of economic policies before the IMF lends to the country. In most cases, a country’s commitments to undertake certain policy actions, known as policy conditionality, are an integral part of IMF lending.
Direct borrowing may not have so many requirements for eligibility, so maybe countries do direct borrowing when they know that they are not borrowing for capital projects or policy actions.
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