World Bank warns of fraud risks in lending programme

World Bank warns of fraud risks in lending programme
PTI
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First Published: Sun, Apr 19 2009. 04 28 PM IST
Updated: Sun, Apr 19 2009. 04 28 PM IST
Washington: The World Bank’s independent evaluation group has warned of significant risks of fraud and corruption in the bank’s lending programme which provides loans and grants to 78 countries, including India.
The report relates to the review of the World Bank’s International Development Association (IDA) programme carried out by the bank’s Independent Evaluation Group (IEG).
The IEG said a “material weakness” exists in controls over fraud and corruption (F&C) related to IDA.
Further, the report pointed out that risk of F&C by stakeholders including local beneficiaries and contractors could result in diversion of IDA funds.
“Evidence emerged during the review that suggested that there are significant risks of fraud and corruption (F&C) impinging on IDA’s lending operations, not fully matched by appropriate controls,” the report said.
IDA is part of the World Bank Group that provides interest free loans and grants to 78 poorest countries including India, which is one of the biggest borrowers from the programme.
The IDA is aimed at boosting economic growth, reducing inequalities and improving people’s living conditions.
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First Published: Sun, Apr 19 2009. 04 28 PM IST