(Recasts first paragraph; adds details, Oxfam comment, staff survey)
WASHINGTON, April 1 (Reuters) - The World Bank plans to increase its funds for development by around 40 percent per year over the next decade as part of its first major realignment since 1997, the institution's president said on Tuesday.
Jim Yong Kim said the development lender will focus on 10 countries -- including India, China, Bangladesh and Democratic Republic of Congo -- that are home to 80 percent of the world's extreme poor. These residents live on less than $1.25 a day.
The bank's commitments should grow to more than $70 billion a year in the next decade, from about $45 to $50 billion now, Kim said. Reuters first reported part of the funding boost in February.
"The world's development needs, of course, far outstrip the World Bank Group's abilities to address them," Kim told the Council on Foreign Relations. "But we can do much, much more."
Kim spoke ahead of next week's meetings of the World Bank and the International Monetary Fund, where the bank will formally present its increased financial capabilities.
The growth in the bank's lending and investment guarantees, alongside planned staff and budget cuts, are part of a massive reorganization Kim launched after he assumed his post nearly two years ago. He hopes the reforms will make the institution more relevant, especially to middle-income countries.
Middle-income countries, including the bank's five-biggest borrowers -- China, Brazil, Turkey, India and Indonesia -- can rely more on private funding and bilateral loans as they grow.
But the bank is betting these countries, which still have deep pockets of poverty, will want access to its experience in areas like the environment and infrastructure. It also offers lower loan rates than the private sector.
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Kim said the planned lending increase was partly aimed at meeting greater demand from its biggest borrowers. The bank raised its loan limits to allow each of those countries to borrow an extra $2.5 billion in total.
"This is an extremely positive sign for us, in the sense that even the largest middle-income countries, China, India, Brazil, continue to want to do business with us," Kim told reporters.
The bank said there will be expansions in all of its major branches, including a $100 billion boost in the fund for middle-income countries, known as the International Bank for Reconstruction and Development.
The bank's private sector arm, the International Finance Corporation, will boost annual commitments to $26 billion a year. And the Multilateral Investment Guarantee Agency, which provides political risk insurance, aims to increase its guarantees by 50 percent over four years.
"If we are going to help developing countries end extreme poverty and boost shared prosperity, we have to provide them with more financial resources, more solutions-based knowledge, and help leverage more private sector investment," Kim told reporters ahead of his speech.
Nicolas Mombrial, head of the Washington branch of Oxfam, said the bank should also focus on improving the quality of its lending rather than just pushing money out the door. "This will be bad news for poor people if World Bank social and environmental standards are not improved," he said in a statement.
Only 40 percent of World Bank employees believe the institution prioritizes development results over the number and volume of transactions, according to a survey obtained by Reuters.
A year ago, Kim committed the bank to the twin goals of eliminating extreme poverty by 2030 and boosting the incomes of the poorest 40 percent of the population in each country.
He has also said the bank should be more selective, focusing on "bold" projects and technical solutions where it can make the biggest difference. The World Bank must meet its goals amid greater competition for development funds and a tight budget.
"I believe we must get leaner in order to get bigger," Kim said. He said the bank was likely to have fewer staff over time, though he did not have a particular number in mind.
The World Bank in October announced it was cutting $400 million from its budget over three years.
(Reporting by Anna Yukhananov; Editing by Leslie Adler and Sofina Mirza-Reid)