Why IMF, World Bank Loans Cost Developing Nations More — G-24 Director
The Director of the has explained why loans from global financial institutions such as the and the often come at higher costs for developing nations.
According to the director, factors including weak domestic revenue, high debt burdens, and elevated risk assessments contribute to the increased cost of borrowing.
He noted that lenders typically apply stricter conditions and higher interest rates to countries perceived as having greater financial risks.
The G-24 official also highlighted structural challenges such as currency instability and limited access to affordable financing options as key drivers of the situation.
He called for reforms in the global financial system to make funding more accessible and affordable for developing economies.
Economists say high borrowing costs can strain national budgets, limiting investments in critical sectors such as infrastructure, healthcare, and education.
They stressed the need for improved fiscal management and diversified revenue sources to reduce reliance on external loans.
The development has reignited discussions on the fairness of global lending frameworks and the need to support sustainable growth in developing countries.
