How the World Bank Supports Developing Nations

Every year, billions of dollars flow from the World Bank to some of the poorest and most vulnerable nations on earth, funding schools, roads, hospitals, clean water systems, and climate resilience programmes that governments could not otherwise afford.

Yet despite being one of the most consequential financial institutions in human history, many people still ask a simple question: What exactly does the World Bank do?

What Is the World Bank?

The World Bank, established in 1944, is a vital international financial institution that aims to reduce poverty and promote sustainable economic development across the globe. Headquartered in Washington, D.C., it comprises two main institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

Together, these two institutions, along with three affiliated agencies, form what is formally known as the World Bank Group: a five-institution family that collectively represents the world’s largest multilateral development lender.

With 189 member countries, the World Bank Group is a unique global partnership fighting poverty worldwide through sustainable solutions. Its stated mission has two core goals: ending extreme poverty and building shared prosperity, particularly in low and middle-income countries where market forces alone cannot deliver the scale of investment needed.

What Is the Difference Between the IBRD and IDA?

This is one of the most commonly misunderstood aspects of how the World Bank operates. The two institutions serve different types of countries at different income levels.

The International Bank for Reconstruction and Development (IBRD) lends to middle-income developing countries, nations that are creditworthy enough to access international capital markets but benefit from the World Bank’s lower borrowing costs and long repayment periods. 

In fiscal 2025, new IBRD lending commitments totalled $40.9 billion across 139 operations. The IBRD has mobilised finance for middle-income countries for more than 75 years, raising over $1 trillion from capital markets since issuing its first bond in 1947.

The International Development Association (IDA) is the arm of the World Bank that serves the world’s poorest countries, those that cannot access credit on commercial terms. IDA provides financing at zero to very low interest rates, with grace periods and repayment terms that can stretch across decades. 

In the fiscal year ending June 30, 2025, IDA commitments totalled $33.8 billion, of which $8.2 billion came in the form of outright grants. The Africa region received 66 percent, some $22.4 billion, of total commitments. Since its founding in 1960, IDA has provided $600 billion to 116 countries.

A total of 78 countries are currently eligible to receive IDA resources. Some countries, such as Nigeria and Pakistan, are IDA eligible based on per capita income levels and are also creditworthy for some IBRD borrowing. They are referred to as blend countries.

How Much Does the World Bank Lend Each Year?

The scale of World Bank financing is enormous. In fiscal 2025, new IDA lending commitments totalled $39.9 billion for 303 operations, including $31.1 billion in credits, $0.6 billion in guarantees, and $8.2 billion in grants.

On the IBRD side, the World Bank raised approximately $64.5 billion by issuing medium- and long-term bonds in various currencies in fiscal 2025. This makes the World Bank not only the world’s largest multilateral development lender but also the world’s largest issuer of sustainable bonds, using capital markets to fund development rather than relying solely on government contributions.

In total, the World Bank has funded over 15,000 development projects via traditional loans, interest-free credits, and grants, a track record spanning eight decades and touching virtually every developing country on earth.

What Does the World Bank Actually Fund?

The World Bank’s lending portfolio is far broader than most people realise. The World Bank provides low-interest loans, zero to low-interest credits, and grants to developing countries. These support a wide array of investments in areas such as education, health, public administration, infrastructure, and financial services.

Here is a breakdown of the key areas where World Bank funding makes a direct difference:

Education

The World Bank has supported 324.5 million students with better education through more than 300 projects in 107 countries. In Africa specifically, the institution is confronting a learning crisis head-on. 

Africa has a young population of 1.5 billion people and is expected to see great economic growth in the future, but without access to quality education, no country’s economic system can function, and economic prosperity cannot be expected. The World Bank funds teacher training, textbook supply, school construction, and digital learning tools across the continent.

Health 

The World Bank works to strengthen health systems in some of the world’s most fragile environments. Through its partnership with the Asian Development Bank, it is currently modernising healthcare in the Pacific. 

A project in Fiji will upgrade primary healthcare networks and support a new regional hospital, giving people across the Pacific greater access to treatment for cancer, cardiovascular disease, diabetes, and other major conditions. Across Africa, the Bank’s health investments range from community health worker training in the Sahel to maternal and child health programmes in sub-Saharan Africa.

Infrastructure 

Roads, bridges, ports, power grids, and water systems are among the most consistently funded categories in the World Bank’s project portfolio. These investments reduce the cost of doing business, connect remote communities to markets, and lay the physical foundations on which all other development depends.

Climate Resilience 

The World Bank has made climate change a central pillar of its lending strategy. It funds flood defence systems in rapidly urbanising cities, drought-resistant agriculture across the Sahel, and renewable energy infrastructure across Africa and Asia. Its Sustainable Development Bond programme raises billions from global investors specifically to finance sustainable development activities in member countries.

Digital Development 

The World Bank supports countries with policy advice, research, analysis, and technical assistance, and its analytical work often guides financing and informs countries’ investment decisions. In 2025, it funded digital identity enrolment in Nigeria, digital job creation in Latin America, and broadband connectivity in fragile states, reflecting a recognition that digital infrastructure is now as critical as physical infrastructure.

How Does the World Bank Raise Its Money?

Unlike aid agencies that depend entirely on government donations, the World Bank uses a sophisticated funding model that blends donor contributions with capital market borrowing.

The IBRD funds most of its lending by borrowing on international capital markets, issuing World Bank bonds, and passing the savings from its triple-A credit rating on to its borrowing members. This allows developing countries to access funds at rates far below what they could obtain independently on global markets.

The IDA operates differently. Approximately half of the IDA’s resources come from 45 donating member countries, primarily well-developed nations including the United States, Japan, France, Germany, and the United Kingdom. Every three years, member nations gather to replenish IDA’s resources. In 2024, the IDA gained $24 billion in donor funding during its latest replenishment round.

In July 2025, the World Bank opened its fiscal 2026 funding cycle in style. A Sustainable Development Bond raised GBP 1.5 billion from global investors to support the financing of the World Bank’s sustainable development activities in member countries.

Beyond Loans: Technical Assistance and Knowledge Sharing

Money alone does not transform economies. The World Bank understands this, which is why financial support is almost always paired with policy advice, technical expertise, and knowledge transfer.

The World Bank works in partnership with developing countries through national governments to support the coordinated delivery of its projects and programmes across various sectors, using financial instruments such as grants, loans, and guarantees.

In practice, this means World Bank economists work alongside finance ministries to design tax systems, its infrastructure specialists advise on procurement processes, and its education experts help governments design curricula. 

The institution also manages one of the world’s most comprehensive open-access development data platforms, providing researchers, governments, and civil society organisations with free access to decades of global development statistics.

Does the World Bank Support Nigeria?

Yes. Nigeria is one of the World Bank’s most active borrowing relationships in Africa. As a blend country, Nigeria is IDA eligible based on per capita income levels and is also creditworthy for some IBRD borrowing. This means Nigeria can access both concessional IDA financing and IBRD loans depending on the nature of the project.

Recent World Bank-supported initiatives in Nigeria include digital identity programmes, agricultural development in the north, education reform projects, and power sector investments, reflecting the breadth of the institution’s engagement with Africa’s most populous nation.

What Are the Criticisms of the World Bank?

No institution of this scale operates without criticism, and the World Bank is no exception. Critics have long raised concerns about the conditions attached to World Bank loans, particularly the structural adjustment programmes of the 1980s and 1990s, which some analysts argue placed excessive austerity burdens on poor countries. Questions about debt sustainability, project effectiveness, and the pace of institutional reform continue to be debated in academic and policy circles.

United States policymakers have long debated the effectiveness of World Bank financing, with critics raising concerns about its lending practices. Supporters, meanwhile, point to the institution’s unmatched track record of funding poverty reduction across six decades and 116 countries, and to the fact that without the World Bank, many of the world’s most vulnerable nations would have no access to long-term development finance at all.

World Bank at a Glance: Key Facts and Figures

Fact	Figure
Year established	1944
Member countries	189
Total development projects funded	15,000+
IDA commitments (FY2025)	$33.8 billion
IBRD lending (FY2025)	$40.9 billion
IDA grants (FY2025)	$8.2 billion
Africa share of IDA commitments	66% ($22.4 billion)
Total IDA funding since 1960	$600 billion
Students supported through education projects	324.5 million
IDA eligible countries	78