Development finance institution

For other uses of "DFI", see DFI (disambiguation).

A development finance institution (DFI) is an alternative financial institution which includes microfinance institutions, community development financial institution and revolving loan funds.[1] These institutions provide a crucial role in providing credit in the form of higher risk loans, equity positions and risk guarantee instruments to private sector investments in developing countries.[2] DFIs are backed by states with developed economies. In 2005, total commitments (as loans, equity, guarantees and debt securities) of the major regional, multilateral and bilateral DFIs totalled US$45 billion (US$21.3 billion of which went to support the private sector).[2]

DFIs provide finance to the private sector for investments that promote development and to help companies to invest, especially in countries with various restrictions on the market.[2]

References

  1. ↑ Andrea Levere, Bill Schweke, and Beadsie Woo, Development Finance and Regional Economnic Development, Washington, DC: CFED, July 2006
  2. 1 2 3 Dirk Willem te Velde and Michael Warner (2007) Use of subsidies by Development Finance Institutions in the infrastructure sector Overseas Development Institute

See also

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