Development finance institutions mix financial return with policy missions such as infrastructure, climate, or SME growth. They may be national or international, and they often take longer tenors or higher risk than commercial banks alone would accept.
Key takeaways
- DFIs can lend, equity-invest, or guarantee to crowd in private capital.
- Mandate discipline matters so development goals do not become open-ended subsidies.
- Procurement and impact reporting are usually stricter than pure private credit.
- They are not grant agencies; capital is still expected to revolve and be repaid in most products.