Results-Based Lending (RBL) for Programs
Results-based lending (RBL) is a performance-based form of financing, where disbursements are linked to the achievement of results rather than to upfront expenditures, as is the case with traditional investment lending.
Results-based lending in ADB
RBL was approved in March 2013 as a new ADB financing modality on a pilot basis for an initial six years. Once approved, RBL programs are implemented using the borrowing country’s program systems while ADB and client countries focus more on policy dialogue. RBL has quickly became a popular financing modality in ADB.
RBL is important to ADB for a few reasons. First, developing member countries (DMCs) and shareholders have asked ADB to reduce transaction costs, response times, and make program administration more efficient. Slow loan processing and administration means high transaction costs to client countries, high administrative costs for ADB, and lost developmental opportunities. RBL provides an additional tool to better meet these requests while improving development effectiveness. Second, ADB has been working in the region for about 50 years now and the development finance landscape in Asia is rapidly changing. Countries now have much stronger systems and capacity. ADB also has to adjust accordingly. By using country systems and principle-based approaches effectively, RBL gives our DMCs a stronger sense of ownership of ADB-financed development programs.
Learn more about our experience in implementing RBL:
- Midterm Review of Results-Based Lending for Programs, 2016
- Results-Based Lending at the Asian Development Bank: An Early Assessment, 2017
- Piloting Results-Based Lending for Programs: Proposed Increase in Resource Allocation Ceiling, 2018