NK Singh: G20 expert group examining ways to enhance lending capacity of multilateral development banks: NK Singh

A G20 expert group is examining how the lending capacity of the multilateral development banks can be substantially enhanced to help developing nations meet the SDGs and eliminate poverty, N K Singh, co-convenor of the group, said on Wednesday. Singh, who is the co-convenor of the G20 Independent Expert Group, stressed that Multilateral Development Banks (MDBs) need to leverage their internal resources and optimise their balance sheets for higher lending.

“We certainly intend to be cognizant of the leveraging ability of multilateral institutions,” Singh said.

“We are examining how.. their lending capability can be substantially enhanced to meet the challenges that lie ahead; the challenge of meeting the SDGs (Sustainable Development Goals), the original mission of eliminating extreme poverty, and shared prosperity,” he said.

Giving an example, Singh said the World Bank has a capitalisation of just over USD 20 billion against which it has successfully undertaken lending operations of over USD 800 billion.

“To increase the lending capacity, the need for recapitalisation, in some form or the other, is inescapable.

“It is curious that the IBRD (International Bank for Reconstruction and Development) is an institution which does not have any replenishment cycle. This deserves serious consideration,” Singh said.

According to him, the group needs to address issues like how the lending capability can be extended, how the balance sheets of MDBs can be optimised, how can greater private capital be mobilised and how can the MDBs as a system be reformed.

Singh was speaking at the convocation of the Indira Gandhi Institute of Development Research.