Stand-By Arrangement (SBA)

October 7, 2021

In an economic crisis, countries often need financing to help them overcome their balance of payments problems. Since its creation in June 1952, the IMF’s Stand-By Arrangement (SBA) has been the workhorse lending instrument for emerging and advanced market countries. The SBA was upgraded in 2009 along with the Fund’s broader toolkit to be more flexible and responsive to member countries’ needs. Conditions were streamlined and simplified, and more funds were made available up front. The reform also enables broader high-access on a precautionary basis.

Lending tailored to member countries’ needs

The SBA framework allows the Fund to respond flexibly to countries’ external financing needs-and to support their adjustment policies with short-term financing.


Eligibility. All member countries facing actual or potential external financing needs are eligible for SBAs subject to IMF policies. However, SBAs are more often used by middle income (and, more recently, advanced) member countries, since low-income countries have a range of concessional instruments tailored to their needs.

Duration. The length of an SBA is flexible, and typically covers a period of 12–24 months, but no more than 36 months. 

Borrowing terms. Access to IMF financial resources under SBAs is guided by a member country’s need for financing, capacity to repay, and track record with use of IMF resources. Within these guidelines, the SBA provides flexibility in terms of the amounts to lend and timing of disbursement. These include:

  • Normal access. The SBA is one of several lending facilities under the Fund’s General Resources Account (GRA). Access to GRA resources is subject to an annual limit of 145 percent of quota for any 12‑month period (temporarily increased to 245 percent of quota through end 2021 as part of the Fund’s COVID-19 response), and a cumulative limit over the life of the arrangement of up to 435 percent of quota, net of repayments.
  • Exceptional access. Access above normal limits is decided on a case-by-case basis under the IMF's Exceptional Access policy.
  • Front-loaded access. Funds can be front-loaded when warranted by the strength of the country’s policies and the nature of its financing needs.
  • Rapid access. Approval of IMF lending under the SBA can be accelerated under Emergency Financing Mechanism. this mechanism has been used during the global financial crisis.

Precautionary access. High access precautionary arrangements (HAPAs) are available to countries facing very large potential financing needs that do not intend to draw on approved amounts, but retain the option to do so should they need it.

Fewer conditions, focus on objectives

When a country borrows from the IMF, it agrees to adjust its economic policies to overcome the problems that led it to seek funding. These commitments, including specific conditionality, are described in the country’s letter of intent.

Building on earlier efforts, the IMF has further reformed the conditions of its lending which focus on criteria that are measurable, observable, and subject to regular reviews whose frequency is based on the strength of the country’s policies and the nature of its financing needs:

Quantitative conditions. Member countries’ progress is monitored using quantitative program targets (quantitative performance criteria and indicative targets). Fund disbursements are conditional on the observance of quantitative performance criteria, unless the Executive Board decides to waive them. Examples include targets for international reserves and government deficits or borrowing, consistent with program goals.

Structural measures. Following the elimination of structural performance criteria, progress in implementing structural measures that are critical to achieving the objectives of the program is assessed in a holistic way, including via benchmarks.

Lending terms

Repayment. Repayments of borrowed resources under the SBA are due within 3¼-5 years of disbursement, which means each disbursement is repaid in eight equal quarterly installments beginning 3¼ years after the date of each disbursement.

Lending rate. The lending rate comprises (1) the market-determined Special Drawing Rights (SDR) interest rate—which has a minimum floor of 5 basis points—and a margin (currently 100 basis points), together known as the basic rate of charge, and (2) surcharges, which depend on the amount and time that credit is outstanding. A surcharge of 200 basis points is paid on the amount of credit outstanding above 187.5 percent of quota. If credit remains above 187.5 percent of quota after three years, this surcharge rises to 300 basis points.

Surcharges. Surcharges are designed to discourage large and prolonged use of IMF resources. They are an important part of the Fund’s risk management and help the Fund to continue to play it central role as the global lender of last resort in times of crisis – something we have seen in full display during the COVID-19 pandemic. Surcharges help strengthen the IMF’s balance sheet to the benefit of all members. They are critical to allowing the IMF to continue providing financing at affordable rates to members in need of financial support, often when they are locked out of private debt markets or interest rates are unsustainably high. It’s important to note that most IMF lending to low-income countries is extended under the Poverty Reduction and Growth Trust (PRGT), which is provided on concessional terms at zero interest and without surcharges.

Commitment fee. Resources committed under all SBAs are subject to a commitment fee levied at the beginning of each 12‑month period on amounts that could be drawn in the period (15 basis points for committed amounts up to 115 percent of quota, 30 basis points on committed amounts above 115 percent and up to 575 percent of quota and 60 basis points on amounts exceeding 575 percent of quota). These fees are refunded pro rata if the amounts are drawn during the course of the relevant period. As a result, if the country borrows the entire amount committed under an SBA, the commitment fee is fully refunded. However, no refund is made under a precautionary SBA under which countries do not draw.

Service charge. A service charge of 50 basis points is applied on each amount drawn.