IMF Executive Board Reviews Eligibility to Use the Fund’s Facilities for Concessional Financing for 2017

May 23, 2017

On May 15, 2017, the Executive Board of the International Monetary Fund (IMF) reviewed the framework for determining eligibility of member countries to use concessional financial resources under the Poverty Reduction and Growth Trust (PRGT) and the current list of
PRGT-eligible countries.

Background

The PRGT eligibility framework, which was introduced in 2010, includes transparent and
rules-based criteria to guide decisions on the eligibility of countries to access the Fund’s concessional facilities. It is designed to ensure uniformity of treatment among members, alignment of access to concessional resources with PRGT objectives, and consistency with the financial self-sustainability of the PRGT. The framework and the list of PRGT-eligible members are normally reviewed every two years, with the most recent review completed on July 17, 2015.

The framework includes differentiated criteria for entry and graduation. In general terms, countries enter onto the list of PRGT-eligible countries when their income per capita is below a specified threshold and they do not have the capacity to access international financial markets on a durable and substantial basis. Countries are expected to graduate from the list when they have achieved income per capita levels that exceed specified thresholds or have established the capacity to access external commercial financing on a durable and substantial basis and they do not face serious short-term vulnerabilities.

Executive Board Assessment [1]

Executive Directors welcomed the opportunity to review the PRGT-eligibility framework and the associated list of PRGT-eligible countries. They emphasized that PRGT eligibility should continue to be guided by a framework that is transparent and rules-based, ensures uniformity of treatment among members in similar circumstances, and preserves the Fund’s scarce concessional resources for the use of low-income members that are most in need, while maintaining the self-sustainability of PRGT lending. Directors reiterated that the eligibility framework should remain broadly aligned with International Development Association (IDA) practices, while allowing scope for some differences given the different mandates of the two institutions.

Directors generally concurred that the existing framework remains broadly appropriate, and did not see a need to introduce changes at this time. In this context, they noted that none of the countries that graduated recently from the PRGT-eligibility list are currently at risk of
re-entering it.

Directors agreed that no members are currently eligible for entry onto, or graduation from, the list of PRGT-eligible countries. They encouraged staff to continue monitoring closely the potential demand for PRGT resources, underscoring the importance of maintaining the
self-sustained capacity of the PRGT. In this regard, Directors welcomed that the decision to keep the list of PRGT-eligible countries unchanged at this review is consistent with the principle of
self-sustainability of the PRGT. Noting that 13 countries meet the income and/or market access criteria but are assessed to face serious short-term vulnerabilities, Directors emphasized the importance of continuing to help these countries address these vulnerabilities and move towards graduation.

Directors agreed that the next review of PRGT eligibility would be held on the standard two-year cycle.



[1] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm .

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