Borrowing from IMF vs World Bank?

Question

What is the differences of borrowing money from IMF and borrowing from World Bank?

E.g. interest rate? penalty of not paying back?

Answer 1

both are strong lenders

Answer 2

Borrowing from IMF is intended for monetary ends.  That means the IMF lends money for structural adjustments in countries going through crises.  Take, for instance, the case of a country that imports a lot more than it exports.  That means it has a balance of payments deficit.  Money is going out.  If money is going out, eventually it will have no money to finance its imports.  It will be lacking "foreign currency", "foreign reserves".   It incurs in debt.  And if it has no foreign reserves, it will not be able to pay its foreign creditors.  It risks defaulting.  In order to prevent that, the IMF comes in.  With the IMF "aid" comes a package of conditionalities -- "the strings attached".  Those will force "structural adjustment" and "ensure" that the country pays back the IMF what it borrowed.

Borrowing from the World Bank has no "structural adjustment" purposes.  It's not meant to resolve financial crisis.  You see, the World Bank's original name is "International Development and Reconstruction Bank", the IRDB.  It was conceived together with the IMF, but for a different purpose.  It is basically aimed at development.  Now that involves different sorts of "aid".  Usually loans and "project aid".  That means the WB can concede a loan (usually with a high "grant" element, meaning [briefly] that the loan is conceded below market rates, and/or with a long term for payment and/or with a long "hold on time" before it actually starts being repaid); or it can finance a specific project (such as building a dam; a school; hospital etc.).  

Now, as to interest rates, both usually operate below market standards.  You should notice, however, that the IMF is a "last resort" bank: it will not concede any loans if the country can still borrow from private creditors.  Once a crisis sharpens, however, no private creditors will want to lend anymore.  And as to the World Bank, given the "grant element" in its loans, they're also below market rates.  

As to penalties for not paying back, that is highly controversial, I'd say.  In William Easterly's "The white man's burden" (2006) (a book about foreign aid), he says that the fact that many countries did not repay IMF loans did not prevent them from getting more loans.  Indeed, many countries spent more than half of their "existing time"  (notice that many of the borrowers were former colonies "born" after World War II) under IMF loans...  

Besides that, nowadays there's a strong campaign for debt forgiveness for the HIDC (Highly Indebted developing countries).  See, for instance, Sachs's book: "The end of poverty" (2005)