The Poverty Reduction and Growth Trust (PRGT) is the IMF's main vehicle for providing concessional (low- or zero-interest) financing to low-income countries (LICs). Established in 2009 as a successor to the Poverty Reduction and Growth Facility, it consolidated the IMF's concessional lending architecture into a single trust funded by member contributions rather than the Fund's general resources.
The PRGT administers three lending facilities tailored to different needs:
- Extended Credit Facility (ECF) – medium-term support for countries with protracted balance-of-payments problems, typically disbursed over 3–4 years.
- Standby Credit Facility (SCF) – short-term support for countries with episodic financing needs.
- Rapid Credit Facility (RCF) – fast-disbursing, low-conditionality support for urgent needs such as natural disasters or commodity price shocks.
Loans carry concessional terms, and during much of the post-2009 period the interest rate on PRGT loans has been set at zero, with grace periods and long maturities. Eligibility is based primarily on per-capita income thresholds and market access criteria, with a list of eligible countries periodically reviewed by the IMF Executive Board.
The PRGT is financed through a mix of loan resources (borrowed from richer member countries' central banks and treasuries) and subsidy resources (grants that allow the Fund to lend at concessional rates). Following the COVID-19 pandemic, demand surged dramatically, prompting fundraising drives and proposals to channel Special Drawing Rights (SDRs) from the 2021 general allocation into the trust. In 2024 the IMF Executive Board approved reforms to put the PRGT on a more sustainable footing, including the introduction of tiered interest rates for wealthier LIC borrowers and the use of IMF internal resources to support the subsidy account.
The PRGT is distinct from the Resilience and Sustainability Trust (RST), created in 2022 to address longer-term challenges like climate change and pandemic preparedness, though both rely on SDR channelling.
Example
In 2023, Bangladesh and several sub-Saharan African states drew on PRGT-backed Extended Credit Facility arrangements to address balance-of-payments pressures from food and fuel price shocks.
Frequently asked questions
PRGT loans are concessional—offered at low or zero interest with long grace periods and maturities—and funded by a separate trust, whereas regular IMF lending uses the Fund's General Resources Account and charges market-based rates.
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