The full name of the World Bank is the International Bank for Reconstruction and Development. Its function is to provide a financing mechanism for the long-term foreign exchange needed for economic reconstruction and development-twenty or thirty years. It is recognized that buying equipment from abroad is a shortcut to development, but it is not feasible for a country lacking specific export commodities to obtain the foreign exchange needed to buy such equipment. By providing long-term financing, banks can accelerate economic growth in the region.
The World Bank gets loans from three sources. When it was established, members were required to subscribe for its capital. Each country is allocated a batch of shares in proportion to its gross national product.
There are three sources of loan funds from the World Bank. When it was established, it required member countries to subscribe for shares and provide capital. Each country can be allocated a certain share of shares according to a certain proportion of its gross national product.
10% of the subscription will be paid to the bank in cash, and the rest will be paid when the bank needs to pay its financial problems. The second source is private loans. 90% of the subscription is used as a guarantee for the bank's own borrowing, so that it can compete with the US government, blue-chip private companies and other high-quality debtors in borrowing from the public. The money it gets from borrowing is then lent to countries in need. In this way, the World Bank promises to repay loans to developing countries or war-torn countries with the honor and resources of all its members. If the borrower defaults, the World Bank will first use up the funds paid by its member countries, and then call on them to provide more funds. A third source of funds has emerged-the "profit" of bank borrowers paying interest. By reducing the interest on initial contributions from member countries, the World Bank has successfully doubled these contributions.
65,438+00% of the share capital is paid to the World Bank in cash, and the remaining share capital will be paid in case of financial difficulties. The second source of funds is private loans. 90% of the shares are used as the guarantee for the bank's own loans, thus enabling the World Bank to compete with the US government, outstanding private companies and other reputable lenders who raise funds from the public. The World Bank will use the funds raised to lend to those poor countries, thus providing credibility and resource guarantee for all developing countries or war-torn member countries to repay loans. If the borrower is insolvent, the bank will first give full support with the funds paid by its member countries, and then ask its member countries to subscribe for additional shares. The third source of funds is the "profit" generated after production-that is, the interest paid by the borrower to the bank. The bank successfully doubled its share capital by charging interest on its use.
As of June 1976, the World Bank has lent more than 42.9 billion dollars to 1 15 countries. Most of the loans granted by the World Bank are used to improve infrastructure projects, mainly to improve transportation, communication and energy. Since the late 1960s, the Bank has expanded its activities to include housing, education, farmers' credit, irrigation and various other projects that have a more direct impact on individuals, especially the very poor.
By the end of June, the World Bank had lent more than $429 billion to 1 1976 countries. Most of the loans are used for projects aimed at improving infrastructure, mainly for improving infrastructure such as transportation, communication and energy. Since the late 1960s, the bank has expanded its business activities to include housing, education, agricultural loans, irrigation and other projects, which have a more direct impact on individuals, especially the poor.