With 700 students studying on Villa Scholarships and thousands of patients getting treated abroad, few would even think of denying Gasim Ibrahim's philanthropic credentials. His detractors have therefore concentrated on questioning his motives and casting aspersions on how he acquired wealth, slyly insinuating that he has some undisclosed obligations to spend on welfare.
One such insinuation revolves around the loans granted by International Finance Corporation (IFC) to Villa Shipping and Trade. A popular story alleges that Villa Foundation (which grants Villa Scholarships) is a precondition set by IFC for the loans. Let us examine this allegation in detail. IFC says its work is to provide investments and advisory services to build the private sector in developing countries. It operates commercially and grants loans at market-based interest rates up to a maximum of 25% of the project cost. Eligibility criteria for IFC loans do not include establishing national scholarship schemes. The detailed eligibility criteria merely require that a project must:
- Be located in a developing country that is a member of IFC;
- Be in the private sector;
- Be technically sound;
- Have good prospects of being profitable;
- Benefit the local economy; and
- Be environmentally and socially sound, satisfying IFC environmental and social standards as well as those of the host country.
Gasim is not the only Maldivian borrower from IFC, nor is he the biggest. According to information currently disclosed by IFC, it has granted a total of $ 74.5 million to the Maldives private sector. This includes $ 25 million to Universal Enterprises, $ 21 million to Villa, $ 20 million to Wataniya Maldives and $ 8.5 million to Taj Hotels. (see graph above.) These are all type A loans subject to the same terms and conditions.
A related insinuation is that the loan to Gasim was secured by a Government guarantee. Funnily enough, IFC regulations prohibit the organization from accepting government guarantees. IFC relies instead on the client company's proposal and track record. IFC "fully shares risks with its partners."