This can be termed as the Soft lending arm of the World Bank. It gives loans to poorer member countries, with zero interest and levies a small_ handling fee. The repayment Schedule is very long extending to 10 years, 35 years or even to 40 years. The IDA raises its resources through donations from the rich member countries of the World Bank Group. It either lends to Governments or against their guarantee. The IDA loans are particularly suitable for infrastructure projects, which have long gestation periods, in view of its very low rate of interest and
loan repayment schedules. The IDA distributes its funds on the basis of the per capita income and population of the borrowing country.