The IDB: What it is and what it does

The mission of the Inter-American Development Bank is to reduce poverty, foster economic and social development, and strengthen democratic institutions in the countries of Latin America and the Caribbean.

An international organization with a world-wide membership of 46 nations, the IDB provides financing to the developing nations of the Americas to carry out investment projects in a wide variety of areas. Most of its lending resources are raised on the international capital markets. Other resources are contributed by individual governments, both in the form of subscribed capital in the Bank and also as contributions to finance IDB-administered funds.

History. The oldest and largest regional multilateral development institution, the IDB was established in 1959 in response to a longstanding desire for a development institution that would focus specifically on the problems of Latin America and the Caribbean. Its original membership included 19 Latin American and Caribbean countries and the United States. These were subsequently joined by eight other Western Hemisphere nations, including Canada.

In addition, between 1976 and 1993, 18 countries from outside of the region were admitted into the Bank, most from Europe, but also Israel and Japan.

In its 40 years of operations, the IDB has mobilized financing for projects that represent a total investment of $255 billion through 1999. Annual lending has grown dramatically from the $294 million in loans approved in 1961. For details on current lending, see the Bank's Annual Report.

Evolving emphasis. The Bank's operations cover the entire spectrum of economic and social development. In its earlier years, Bank lending emphasized agriculture, industry, energy, transportation and the social sectors.

Since its founding, the Bank has pioneered in financing social projects such as health and education. Currently, the Bank is exceeding its target of 40 percent of lending for social projects.

It also has been a leader in supporting microenterprise, helping to provide small loans and technical assistance to many thousands of microentrepreneurs and small-scale farmers as well as financing large-scale microcredit programs.

Today, the Bank has broadened the scope of its lending to include programs to reduce poverty, increase social equity, strengthen civil society and democratic institutions, protect the environment, streamline financial systems, modernize governmental operations, reduce levels of violence, foster integration, and much more.

Since 1995, the IDB has been lending up to 5 percent of its ordinary capital resources directly to the private sector, without government guarantees.

Sources of funds. The financial resources of the Bank consist of the ordinary capital account—which is comprised of subscribed capital, reserves and funds raised through borrowings—and funds in administration, which is comprised of contributions made by member countries. The Bank also has a Fund for Special Operations which lends on concessional terms for projects in small and less-developed countries.

The IDB raises most of its lending resources in the capital markets of Europe, Japan, Latin America, the Caribbean and the United States. The Bank's debt is AAA rated by the three major rating services in the United States, and is accorded equivalent status in the other major capital markets. For more information on the Bank's capital markets activities, please click here.

Institutitonal structure. The IDB's Board of Governors is the Bank's highest authority. The governors representing each member country are usually ministers of finance, presidents of central banks or officers of comparable rank. The Board of Governors has delegated many of its operational powers to the Board of Executive Directors, which is responsible for the conduct of the Bank's operations.

The Bank, whose headquarters are in Washington, D.C., has Country Offices in each of its borrowing member countries and in Paris and Tokyo.