Development Finance Institutions

A Development Finance Institution (DFI) is an alternative finance institution which includes microfinance institutions, community development finance institutions, and revolving loan funds. Generally DFIs primary goal is to co-invest with the private sector in order to stimulate investments that promote development. DFIs play an important role in providing credit to private sector investments in developing countries by providing higher risk loans, equity positions, and risk guarantee instruments. Some DFIs include socially responsible investing and impact investing criteria into their mandates.

DFIs are usually backed by states with developed economies. In 2005, total commitments (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). Some of the listing below, such as the FMO, could also be classed as multilateral finance institutions (MFIs). MFIs are usually different as they have a more limited memberships and often focus on financing certain types of projects. The main bilateral and multilateral DFIs include:

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