This is one example of the many radical ideas people have developed to solve this critical problem. Other NGOs give countries grants that they do not have to repay. The problem, however, is that many nations are using the loans to make short-term investments, such as buying food. These loans are shown to be the most effective when nations use them to invest in infrastructure and education. This way, the nations receive long-term benefits and are able to pay off the loan.
Bilateral loans are loans agreements between two nations.
An example of this is the United States loaning an indebted nation money so it can pay of its previous loans. Usually the nations refinancing loans are more lenient in their debt repayment schedules. Debt forgiveness is when the nation originally loaning the indebted nation money forgets the loans and cleans the slate. Essentially a nation will relieve an indebted nation of its debts if it promises to take steps to clean up its environment. Examples include Nike and McDonalds.