The financial intermediary, in turn, may pass on Bank funds to subborrowers as subloans or equity, to finance projects that aim to increase the production of goods and services. To ensure satisfactory performance, these subprojects must meet specific eligibility and development criteria. Bank funds are disbursed against eligible expenditures for goods, works, and services, including technical assistance. FILs help to develop sound financial sector policies and institutions, promote the operational efficiency of those institutions in a competitive environment, improve the terms of credit to enterprises and households, and promote private investment. They are also used to strengthen the management and implementation of reconstruction efforts, and to develop disaster-resilient technology and early warning systems to prevent or mitigate the impact of future emergencies.
Special design features.
To accommodate the emergency nature of the operation, abbreviated processing may be used. The ERL may include fast-disbursing components that finance a list of imports identified as necessary to an effective recovery program. ERLs focus on the rapid reconstruction of economic, social, and physical systems within a limited period, normally 2 to 3 years. They finance investment and productive activities, rather than relief or consumption. For recurring events such as annual flooding, or for a slow-onset disaster such as drought, a SIL is usually more appropriate.