World Bank Lending for Lines of Credit: An IEG Evaluation

World Bank Lending for Lines of Credit: An IEG Evaluation

by Laurie Effron

Paperback

$10.00

Overview

This review of World Bank support for lines of credit, channeled through local financial institutions in client countries, finds that the Bank's own guidelines have not been followed and outcomes are poor.

Product Details

ISBN-13: 9780821366547
Publisher: World Bank Publications
Publication date: 06/09/2006
Series: Independent Evaluation Group Studies
Pages: 96
Product dimensions: 8.30(w) x 10.50(h) x 0.10(d)

Table of Contents

Acknowledgmentsv
Prefacevii
Executive Summaryix
Acronyms and Abbreviationsxiii
1Introduction1
2Literature Review and Bank Guidelines3
Theoretical and Empirical Literature3
Bank Approaches3
Guidelines4
3Are Lines of Credit an Instrument of the Past?7
Overview7
Trends in Lending8
Conclusions on Trends12
4LOC: Are Bank Guidelines Being Followed?13
Methodology and Hypotheses13
Sample Characteristics14
Findings15
Quality Assurance Group's Role in Quality-at-Entry23
Conclusions on LOC Design24
5LOC Outcomes25
Low Disbursements25
Factors in Cancellation Rates26
Outcomes27
A Deeper Look at Outcomes31
Conclusions on LOC Outcomes32
6Conclusions and Recommendations35
Findings35
Recommendations35
Appendixes39
ADefinitions and Methodology41
BData on Lines of Credit49
CLOC Less Than 5 Percent of Total Commitments57
DOperational Policy 8.30 and Bank Procedure 8.3059
EManagement Response65
FChairman's Summary: Committee on Development Effectiveness (CODE)71
Endnotes75
References79
Boxes
3.1Identifying LOC7
4.1CGAP Analysis of Microfinance LOC14
4.2Diversity of LOC Objectives16
4.3Good Practices Do Not Necessarily Yield Good Outcomes20
5.1Cancellation Preceded by Poor Performance26
5.2Exceptions to the Rule: High Cancellation, Satisfactory Outcome30
5.3Good LOC Are Well Prepared, Timely, and Useful32
Figures
3.1LOC Commitments and Number of Projects9
3.2Average Size of LOC, FY93-FY039
3.3Trends in Regular LOC, by Number of Operations and Amounts10
3.4World Bank and IFC-Lending for LOC11
3.5World Bank and Other MDBs, Lending for LOC12
4.1Eligibility Criteria at Appraisal and Monitoring during Implementation18
4.2Project Cycle Information on PFI Financial Health, by Sector19
4.3Percent of LOC with Information on Repayment of Bank Funds20
4.4Evidence on the Use of External Audits21
4.5Quality of Financial Information, by Period22
5.1Disbursements as a Percentage of Commitments, by Region26
5.2Disbursements as a Percentage of Commitments, by LOC and Financial System Size27
5.3Satisfactory Ratings by Number of Projects and Net Commitments28
5.4Factors Associated with Differences in LOC Outcomes30
Tables
3.1LOC Sectoral Distribution, by Number of Operations, FY93-FY038
3.2Commitments for Regular LOC, by Region, FY93-FY0310
4.1LOC Approved and Sample Coverage, FY93-FY0213
4.2Operations by Sector and Objective15
4.3LOC by End Users15
4.4Macroeconomic Framework at Appraisal16
4.5Adherence of LOC to Environmental Policies23
5.1Satisfactory Ratings, by Sector and Region28
5.2LOC Characteristics and Outcome Ratings29

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