National Development Financial Institutions : Trends, Crisis Response Activities, and Lessons Learned
In recent years, there has been renewed interest in providing countercyclical lending and sustainable development financing through national development financial institutions (NDFIs). While NDFIs are often a feasible solution for addressing develo...
| Main Authors: | , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/undefined/542471633672135095/National-Development-Financial-Institutions-Trends-Crisis-Response-Activities-and-Lessons-Learned http://hdl.handle.net/10986/36467 |
| Summary: | In recent years, there has been
renewed interest in providing countercyclical lending and
sustainable development financing through national
development financial institutions (NDFIs). While NDFIs are
often a feasible solution for addressing development needs
and closing financing gaps, they are not always the best
solution, and their setup and structure need to be tailored
to the country’s needs. It is important that prior to
setting up a new NDFI or increasing the scope of operations
of the existing ones, governments consider all available
public policy interventions as well as options for private
capital involvement to address unmet financing needs of the
private sector. NDFIs will likely see strong demand for
their interventions in a post- Coronavirus disease 2019
(COVID-19) recovery phase. This calls for enhanced NDFI
efficiency and effectiveness. To maximize the net benefits
of NDFIs and ensure their financial sustainability, NDFIs
should be effectively managed and properly supervised. NDFIs
have been important actors in the implementation of
countercyclical finance in response to the COVID-19 pandemic
and have helped mitigate a credit crunch. During the
COVID-19 pandemic, governments have taken on large
balance-sheet risks to support credit growth, in many cases
using NDFIs as administrators of public anti-crisis programs. |
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