What is the Difference Between World Bank and IMF?

Found in the USA in July 1944 in Bretton Woods The world’s states came together to establish a more stable and more prosperous world. At the conference, it was decided to establish two new institutions: World Bank and International Monetary Fund or better known as the IMF.

Since then, the IMF and the World Bank have started to work very hard. Finally Minister of Finance Mehmet Şimşek Following his statements, many people said, “Are the IMF and the World Bank the same? He started looking for an answer to the question. The goals and ways of working of the two organizations are quite different from each other.

Let’s look at the IMF first

IMF, international financial cooperation It provides policy advice and capacity-building support to help countries build strong economies. The IMF, which creates funds for countries with balance of payments, makes some requests in return for the regulation of financial policy programs. Experts in macroeconomics and finance play an important role in this organization, which provides financing with short-medium-term loans.

The World Bank is a different organization

The World Bank, on the other hand, does not interfere with monetary policies and does not interfere with payments. not for debts. When a country needs to make a breakthrough in a sector or to invest in areas such as education and health, countries in need of resources knock on the door of this institution. The World Bank was established to support long-term economic development with financial and technical support. The organization, which includes experts in a broader context, generates resources both from the contributions of member countries and through bond issuances.

If we need to list the differences item by item:

• The World Bank gives loans to investment projects and receives a certain amount of money in return for that investment. use of imported materials demands. The IMF lends across the board, it doesn’t really care where you spend the money, but it does help you pay off your debt. policy recommendations gives.
• The loan received from the World Bank, loan specific project cannot be used outside. IMF loans are generally wherever you want you can use
• World Bank, project stages checks and makes the loan available accordingly. The IMF put performance criteria It makes the relevant part of the debt available for use, provided that it is met.
• Maturity of World Bank loans is around 10-15 years for a long time But IMF borrowings short or medium term It is possible.
• When giving loans, the World Bank only provides resources for public projects. On the other hand, the interest rates on loans provided by both institutions are lower than the market. As the debt received from the IMF increases, the interest applied by the IMF on the loan also increases.