Review of ADB’s Program Lending Policies 1999
What is a program loan?
Program loans assist in developing a sector of an economy-- i.e. energy, agriculture, transport and communications-- by promoting policy reforms.
Highlights of program lending modality
- ADB initiated program lending in 1978. Since then, the policy framework for program lending has shifted from financing sector inputs to improving policy and sector efficiency
- 1987-1995 program loans were mostly in agriculture while 1996-1998 program loans dealt with the Asian financial crisis
- A 1999 performance appraisal which covered 27 program loans revealed that 33.3 percent were generally successful and 59.3 percent were partly successful
General conclusions of the 1999 review
- It is necessary to distinguish between crisis and non-crisis program lending. They involve different program horizons, implementation approaches, and disbursement patterns
- Program cluster approaches should be used to address non-crisis situations. They involve a series of linked subprograms designed to address a policy problem over a longer term
- There should be special program loans designed to help DMCs in crisis situations with large-scale, rescue-package support
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