International Affairs:

A Summary of Lending by International Financing Institutions to Selected Coffee-Growing Developing Countries

ID-78-23: Published: Apr 25, 1978. Publicly Released: Apr 25, 1978.

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The following questions were raised concerning loans and assistance to coffee-producing countries by international financing institutions: What criteria are used by these institutions to grant loans and how are U.S. policy considerations included in the decisionmaking process? How many loans and in what amounts are being made to one-crop, less developed countries? How many and what percentage of these loans have gone to the coffee-producing countries? What is the current rate of default on these loans and do further defaults seem imminent? How do these loans compare to loans made by U.S. Banks? and What relationship is maintained by U.S. banks to international lending organizations?

Lending criteria are provided for the International Monetary Fund, the International Bank for Reconstruction and Development, the International Development Association, the International Finance Corporation, the Inter-American Development Bank, and the Asian Development Bank. U.S. policy considerations involved in the lending process include: the priority of the project to be financed, technical feasibility, capacity of the recipient's local institutions to implement the project, soundness of the financial plan, and expected benefits. Loans are made to 23 developing countries which realize a significant portion of foreign earnings from coffee. Principal loan recipients were India (9.7 percent), Brazil (8.4 percent), Mexico (6 percent), and Indonesia (5.3 percent). There have been no defaults on loans made by international financing institutions from 1973-1977, and none are expected. There is little comparability between these loans and those made by U.S. banks.

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