WHAT are DFI’s?

As described by the Organisation for Economic Cooperation and Development (OECD), national and international Development Finance Institutions (DFIs) are specialised development banks or subsidiaries set up to support private sector projects in developing and emerging economies.

The current directive of DFIs reflect the idea that the private sector plays a crucial role in fostering economic, social and environmental development. DFIs play a key part in promoting development in beneficiary countries by generating and supporting private sector investments.

DFIs are particularly important in emerging market funds in that they often act as anchor investors to private funds or companies, providing the impetus for a first-close.

In part, the importance of DFIs has increased as the global pool of development capital has decreased. Most OECD (Organisation for Economic Co-operation and Development) governments now underline the need to use aid capital in conjunction with private sector capital to increase developmental impact.