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TYPES AND DELIVERY METHODS OF FINANCIAL PRODUCTS
OFFERED BY INTERNATIONAL FINANCIAL INSTITUTIONS
Yovkochev Sherzod
PhD
+998 99 696-01-05
https://doi.org/10.5281/zenodo.16879688
Financial products provided by international financial organizations are
distinguished by their optimal and long-term nature in the architecture of the
international financial system.
In the process of globalization of the world economy and transformation of
national economies, a thorough study of the essence of financial products
offered by international financial institutions is of great importance for member
countries in their use, as well as in making informed decisions.
As you know, a financial product is a set of interconnected financial
services, financial instruments, and technologies offered as commodities by
international financial institutions in the international financial market [1]. A
common similarity between international financial institutions is that the
financial product provided is financed for specific purposes (programs and
projects).
As we know, the World Bank Group is an international financial institution
that provides major financial instruments and advisory services. This
international financial institution allocates its financial resources through the
following three financial instruments:[2]
1) financing of investment projects (financing of projects implemented
within various sectors of the economy);
2) a lending program tied to the results of the project (allocation of credit
resources depending on the results achieved within the project);
3) financing of structural changes and development goals of the country
(allocation of financial resources to support institutional, structural, political,
economic reforms in the country).
Since the main lending institutions of the World Bank Group are the
International Bank for Reconstruction and Development (IBRD) and the
International Development Association (IDA), it is appropriate to analyze the
financial products of these organizations. The IDB offers flexible and affordable
financial products to its member countries to obtain resources. The IDA, on the
other hand, provides loans and grants to poor, developing countries with very
low or zero interest rates for 30-40 years.[3] In addition to the above, the World
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Bank Group also offers guarantees, project preparation fund products, and
special trust fund loans.
In the scientific works of E.A. Markelova, the financial products of the IBRD
are divided into two groups:
[4]
1) investment (flexible credit programs, loans
for education and innovation); 2) systemic (credit programs for systemic
reforms, special loans for sectoral systemic reforms) were analyzed separately.
V.V. Konovalov noted that the IBRD's systemic loans are provided for a
period of 2-3 years for systemic reform programs, and among them, special
loans have been formed for new systemic reforms.[5]
The World Bank Group classifies the economies of the world into four
income groups: high-income, upper-middle-income, lower-middle-income, and
low-income countries. Income is calculated as gross national income (GNI) per
capita in current U.S. dollars using the Atlas method (see Appendix 5). This
classification is updated annually on July 1[6].
The World Bank Group classifies member countries according to three
criteria: regions, income levels, and financing groups. Within the regional
classification, the Republic of Uzbekistan belongs to the Europe and Central Asia
region; in terms of income, it is categorized as a lower-middle-income economy;
and within the financing classification, it is placed in the blend group, meaning
that it can access credit resources from both the International Development
Association (IDA) and the International Bank for Reconstruction and
Development (IBRD).[7]
From this perspective, after the World Bank Group classifies member
countries according to their level of economic development, it develops and
offers the terms of financial products (such as loan interest rates, loan periods,
and other conditions) that match each group’s repayment capacity.
According to G. N. Ratnikov, in order for international financial institutions
to mobilize more assistance and resources for developing countries, it is
necessary to develop new directions and instruments.[8]
At the same time, scholarly works note that in the activities of international
financial institutions, priority should be given to addressing problems in the
national economy, eliminating crisis processes in a short period of time, and
reducing their costs.[9]. This also implies the need for international financial
institutions to review their financial products. Furthermore, the systematization
of international finance and credit has been analyzed as important for
developing concepts, financial policies, and identifying stability factors for
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countries. This is explained by the fact that it can be used as an element of the
financial product mechanism of international financial institutions.
The Asian Development Bank (ADB) also provides various financial
products to its member countries, such as loans, grants, technical assistance,
guarantees, and debt management products. It should be noted that the ADB
finances its financial products through Ordinary Capital Resources (OCR), the
Asian Development Fund (ADF), and special and trust funds. The financial
products offered by the ADB include the following:[10]:
Local currency loans (LCL) – In 2005, a product in national currency was
introduced to meet borrowers’ financial needs. It is available to private sector
enterprises and certain public sector entities. This financial product was
developed to prevent currency mismatches in the country and to support the
development of the local capital market. In addition, borrowers are allowed to
change interest rates based on mutual agreements.
Concessional OCR loans (COL) – These are concessional loans offered at low
interest rates aimed at narrowing the development gap in the Asia-Pacific region
and reducing poverty in member countries. Concessional assistance to
developing member countries is intended to help them overcome challenges in
their development process and to promote inclusive and sustainable growth.
Debt management products – The ADB offers debt management products to
its members to help manage obligations to third parties. By providing such
products, member countries can improve the management of their external debt
systems. Debt management products include currency swaps, local currency
swaps, and interest rate swaps.
Furthermore, as noted in the scientific work of A. V. Shelepov, the ADB
implements joint projects through co-financing (official, commercial, and other)
and syndicated financing instruments [10].
The eligibility of developing member countries of the ADB to receive
concessional financial resources is determined by two indicators:
Gross national income (GNI) per capita; and
Creditworthiness for ordinary capital resources, i.e., repayment
capacity.
Similar to the World Bank Group, the ADB calculates GNI per capita using
the Atlas method. The repayment capacity of member countries—that is, their
ability to return financial resources—is classified into three categories: fully
creditworthy, limited creditworthy, and non-creditworthy countries. From this
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perspective, based on the above data, the ADB classifies its member countries
under a three-tier system:
Group A – eligible only for concessional assistance,
Group B – eligible for both ordinary capital resources and
concessional assistance, and
Group C – eligible only for ordinary capital resources.
The Republic of Uzbekistan is classified by the ADB in Group B, meaning
that the country is eligible to access both ordinary capital resources and
concessional assistance.[11]
It is important that the above-mentioned international financial institutions
implement their regulatory documents on the organization of financial product
forms and distribution aspects in accordance with international standards. [12].
However, the establishment and recognition of international standards is only a
condition and tool that creates the necessary prerequisites for strengthening the
financial system and provides additional opportunities for economic growth.
Literature:
1. Mirkin, Y. M., & Mirkin, V. Y. (2008). English–Russian explanatory dictionary of
financial markets. Moscow, Russia: Alpina Business Books, Alpina Publishers.
2. World Bank Group. (n.d.). Financing instruments. Retrieved August 13, 2025,
from
https://www.worldbank.org/en/what-we-do/products-and-
services/financing-instruments
3. Khavin, D. V., & Bekker, P. R. (2015). International economic and monetary-
financial organizations: Problems and prospects. Infrastructure Sectors of the
Economy: Problems and Prospects for Development, (10), 31–43.
4. Markelova, E. A., & Nikonets, O. E. (2016). The role of international monetary-
credit and financial organizations in the modern economy. Concept: Scientific
and Methodological Electronic Journal, 11, 86–90.
5. Konovalov, V. V. (2017). International financial organizations and their role in
the world financial system. In Current trends in the development of the economy
of Russia and foreign countries: Collection of scientific works (pp. 9–11).
Moscow, Russia.
6. World Bank Group. How does the World Bank classify countries. Retrieved
August
13,
2025,
from
https://datahelpdesk.worldbank.org/
knowledgebase/articles/378834-how-does-the-world-bank-classify-countries
7. World Bank Group. Country classification. Retrieved August 13, 2025, from
https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-
bank-country-and-lending-groups
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8. Ratnikov, G. N., & Bikalova, N. A. (2015). The role of international financial
organizations in the economy: The IMF case. A New Word in Science: Prospects
for Development, 2(4), 420–421.
9. Azizov, U. U., & Ataniyazov, J. Kh. (2019, October). Directions for reforming the
world financial architecture and the international financial system in the context
of globalization. International Finance and Accounting Scientific Electronic
Journal, (5), 20–21.
10. Shokhazami, Sh. Sh. (2017, February). On the need for financial and credit
systemology. International Finance and Accounting Scientific Electronic Journal,
(1), 7.
11. Asian Development Bank. Financial products. Retrieved August 13, 2025,
from https://www.adb.org/site/public-sector-financing/financial-products#
12. Shelepov, A. V., & Andronova, I. V. (2018). Interaction of the New
Development Bank with other development banks: Formal foundations for
future cooperation. International Organizations Research Journal: Education,
Science, New Economy, (1), 102.
