Development Finance Institutions : Measuring Their Subsidy

The term "development finance institutions" (DFI) encompasses no only government development banks, but also nongovernmental micro-finance organizations, that match grants to attempt to promote community development, decentralization of p...

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Main Authors:	Schreiner, Mark, Yaron, Jacob
Format:	Publication
Language:	English en_US
Published:	Washington, DC: World Bank 2013
Subjects:	ACCOUNTING ACCOUNTING PRINCIPLES ACCOUNTING SYSTEMS BALANCE SHEET BENCHMARKS CASH FLOWS COMMUNITY DEVELOPMENT COST ANALYSIS COST OF CAPITAL DEBT DECENTRALIZATION DEPOSIT ACCOUNTS DEPOSITS DEVELOPMENT BANKS DEVELOPMENT CREDIT DEVELOPMENT CREDIT CORPORATIONS DEVELOPMENT FINANCE DEVELOPMENT FINANCE INSTITUTIONS DEVELOPMENT PROJECTS DISCOUNT RATE DONOR FUNDS EARNINGS PER SHARE ECONOMIC VALUE EXTERNALITIES FINANCIAL DATA FINANCIAL FLOWS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL RATIOS GAAP GENERALLY ACCEPTED ACCOUNTING PRINCIPLES GOVERNMENT BONDS INFLATION INFLATION RATE INTEREST RATE LAWS LENDERS LICENSES LOAN LOAN LOSSES MARKET PRICES MATCHING GRANTS MICROFINANCE NET WORTH OPERATING MARGINS OPPORTUNITY COST OPPORTUNITY COSTS PRESENT VALUE PRIVATE OPPORTUNITY COSTS PROFITABILITY PUBLIC DEBT PUBLIC FUNDS PUBLIC GOOD PUBLIC INVESTMENTS PUBLIC RESOURCES PUBLIC SERVANTS RATE OF TIME PREFERENCE RESERVE REQUIREMENT RETURN ON ASSETS RETURN ON EQUITY ROADS SIM SOCIAL WELFARE STOCK PRICES TAX TIME VALUE OF MONEY VALUE ADDED
Online Access:	http://documents.worldbank.org/curated/en/2001/10/1614965/development-finance-institutions-measuring-subsidy http://hdl.handle.net/10986/13983

id	okr-10986-13983
recordtype	oai_dc
spelling	okr-10986-139832021-04-23T14:03:10Z Development Finance Institutions : Measuring Their Subsidy Schreiner, Mark Yaron, Jacob ACCOUNTING ACCOUNTING PRINCIPLES ACCOUNTING SYSTEMS BALANCE SHEET BENCHMARKS CASH FLOWS COMMUNITY DEVELOPMENT COST ANALYSIS COST OF CAPITAL DEBT DECENTRALIZATION DEPOSIT ACCOUNTS DEPOSITS DEVELOPMENT BANKS DEVELOPMENT CREDIT DEVELOPMENT CREDIT CORPORATIONS DEVELOPMENT FINANCE DEVELOPMENT FINANCE INSTITUTIONS DEVELOPMENT PROJECTS DISCOUNT RATE DONOR FUNDS EARNINGS PER SHARE ECONOMIC VALUE EXTERNALITIES FINANCIAL DATA FINANCIAL FLOWS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL RATIOS GAAP GENERALLY ACCEPTED ACCOUNTING PRINCIPLES GOVERNMENT BONDS INFLATION INFLATION RATE INTEREST RATE LAWS LENDERS LICENSES LOAN LOAN LOSSES MARKET PRICES MATCHING GRANTS MICROFINANCE NET WORTH OPERATING MARGINS OPPORTUNITY COST OPPORTUNITY COSTS PRESENT VALUE PRIVATE OPPORTUNITY COSTS PROFITABILITY PUBLIC DEBT PUBLIC FUNDS PUBLIC GOOD PUBLIC INVESTMENTS PUBLIC RESOURCES PUBLIC SERVANTS RATE OF TIME PREFERENCE RESERVE REQUIREMENT RETURN ON ASSETS RETURN ON EQUITY ROADS SIM SOCIAL WELFARE STOCK PRICES TAX TIME VALUE OF MONEY VALUE ADDED The term "development finance institutions" (DFI) encompasses no only government development banks, but also nongovernmental micro-finance organizations, that match grants to attempt to promote community development, decentralization of power, and local empowerment. Measures of the social cost of DFIs that receive public funds, help to check whether DFIs are good uses of public funds, i.e., if the social benefit of a DFI exceeds the social cost, then public funds are indeed well-spent, further improving social welfare. This report describes the measurement of costs but not of benefits; but even without knowledge of benefits, knowledge of costs can help to adequately spend funds. Two measures of social cost are presented: first, the Subsidy Dependence Index (SDI) - the ratio of subsidy received to revenue from loans; and, subsidy is the social cost of the public funds used to run a DFI - which does not discount flows, rather it works in short time frames, or when the rate of time preference is low; second, the Net Present Cost to Society (NPCs) - like standard present-value measures, it discounts cash flows, and works in any time frame. Both SDI and NPCs are tools, to help establish benchmarks, chart trends, and compare a DFI with identical clients, and services. It is stipulated that measurement of the social cost of public DFIs matters because funds earmarked for development are scarce, while subsidies for DFIs could be adequate, provided social welfare improves in a broader scale. 2013-06-17T20:11:07Z 2013-06-17T20:11:07Z 2001-10 http://documents.worldbank.org/curated/en/2001/10/1614965/development-finance-institutions-measuring-subsidy 0-8213-4984-8 http://hdl.handle.net/10986/13983 English en_US Directions in Development; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Publications & Research :: Publication Publications & Research :: Publication
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING ACCOUNTING PRINCIPLES ACCOUNTING SYSTEMS BALANCE SHEET BENCHMARKS CASH FLOWS COMMUNITY DEVELOPMENT COST ANALYSIS COST OF CAPITAL DEBT DECENTRALIZATION DEPOSIT ACCOUNTS DEPOSITS DEVELOPMENT BANKS DEVELOPMENT CREDIT DEVELOPMENT CREDIT CORPORATIONS DEVELOPMENT FINANCE DEVELOPMENT FINANCE INSTITUTIONS DEVELOPMENT PROJECTS DISCOUNT RATE DONOR FUNDS EARNINGS PER SHARE ECONOMIC VALUE EXTERNALITIES FINANCIAL DATA FINANCIAL FLOWS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL RATIOS GAAP GENERALLY ACCEPTED ACCOUNTING PRINCIPLES GOVERNMENT BONDS INFLATION INFLATION RATE INTEREST RATE LAWS LENDERS LICENSES LOAN LOAN LOSSES MARKET PRICES MATCHING GRANTS MICROFINANCE NET WORTH OPERATING MARGINS OPPORTUNITY COST OPPORTUNITY COSTS PRESENT VALUE PRIVATE OPPORTUNITY COSTS PROFITABILITY PUBLIC DEBT PUBLIC FUNDS PUBLIC GOOD PUBLIC INVESTMENTS PUBLIC RESOURCES PUBLIC SERVANTS RATE OF TIME PREFERENCE RESERVE REQUIREMENT RETURN ON ASSETS RETURN ON EQUITY ROADS SIM SOCIAL WELFARE STOCK PRICES TAX TIME VALUE OF MONEY VALUE ADDED
spellingShingle	ACCOUNTING ACCOUNTING PRINCIPLES ACCOUNTING SYSTEMS BALANCE SHEET BENCHMARKS CASH FLOWS COMMUNITY DEVELOPMENT COST ANALYSIS COST OF CAPITAL DEBT DECENTRALIZATION DEPOSIT ACCOUNTS DEPOSITS DEVELOPMENT BANKS DEVELOPMENT CREDIT DEVELOPMENT CREDIT CORPORATIONS DEVELOPMENT FINANCE DEVELOPMENT FINANCE INSTITUTIONS DEVELOPMENT PROJECTS DISCOUNT RATE DONOR FUNDS EARNINGS PER SHARE ECONOMIC VALUE EXTERNALITIES FINANCIAL DATA FINANCIAL FLOWS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL RATIOS GAAP GENERALLY ACCEPTED ACCOUNTING PRINCIPLES GOVERNMENT BONDS INFLATION INFLATION RATE INTEREST RATE LAWS LENDERS LICENSES LOAN LOAN LOSSES MARKET PRICES MATCHING GRANTS MICROFINANCE NET WORTH OPERATING MARGINS OPPORTUNITY COST OPPORTUNITY COSTS PRESENT VALUE PRIVATE OPPORTUNITY COSTS PROFITABILITY PUBLIC DEBT PUBLIC FUNDS PUBLIC GOOD PUBLIC INVESTMENTS PUBLIC RESOURCES PUBLIC SERVANTS RATE OF TIME PREFERENCE RESERVE REQUIREMENT RETURN ON ASSETS RETURN ON EQUITY ROADS SIM SOCIAL WELFARE STOCK PRICES TAX TIME VALUE OF MONEY VALUE ADDED Schreiner, Mark Yaron, Jacob Development Finance Institutions : Measuring Their Subsidy
relation	Directions in Development;
description	The term "development finance institutions" (DFI) encompasses no only government development banks, but also nongovernmental micro-finance organizations, that match grants to attempt to promote community development, decentralization of power, and local empowerment. Measures of the social cost of DFIs that receive public funds, help to check whether DFIs are good uses of public funds, i.e., if the social benefit of a DFI exceeds the social cost, then public funds are indeed well-spent, further improving social welfare. This report describes the measurement of costs but not of benefits; but even without knowledge of benefits, knowledge of costs can help to adequately spend funds. Two measures of social cost are presented: first, the Subsidy Dependence Index (SDI) - the ratio of subsidy received to revenue from loans; and, subsidy is the social cost of the public funds used to run a DFI - which does not discount flows, rather it works in short time frames, or when the rate of time preference is low; second, the Net Present Cost to Society (NPCs) - like standard present-value measures, it discounts cash flows, and works in any time frame. Both SDI and NPCs are tools, to help establish benchmarks, chart trends, and compare a DFI with identical clients, and services. It is stipulated that measurement of the social cost of public DFIs matters because funds earmarked for development are scarce, while subsidies for DFIs could be adequate, provided social welfare improves in a broader scale.
format	Publications & Research :: Publication
author	Schreiner, Mark Yaron, Jacob
author_facet	Schreiner, Mark Yaron, Jacob
author_sort	Schreiner, Mark
title	Development Finance Institutions : Measuring Their Subsidy
title_short	Development Finance Institutions : Measuring Their Subsidy
title_full	Development Finance Institutions : Measuring Their Subsidy
title_fullStr	Development Finance Institutions : Measuring Their Subsidy
title_full_unstemmed	Development Finance Institutions : Measuring Their Subsidy
title_sort	development finance institutions : measuring their subsidy
publisher	Washington, DC: World Bank
publishDate	2013
url	http://documents.worldbank.org/curated/en/2001/10/1614965/development-finance-institutions-measuring-subsidy http://hdl.handle.net/10986/13983
_version_	1764424972895256576

Development Finance Institutions : Measuring Their Subsidy

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