Function of Development Financial Institutions

Development Financial Institutions (DFIs) are specialized financial institutions that provide long-term financing for developmental projects aimed at promoting economic growth and social welfare. The principal functions common to Development Financial Institutions (DFI) include:

1. Providing long-term financing: DFIs offer long-term loans, equity, and other forms of financing to support developmental projects, such as infrastructure development, agriculture, and small and medium-sized enterprises.
2. Risk management: DFIs specialize in assessing and managing risks associated with developmental projects, which may include political risks, currency risks, and project-specific risks.
3. Technical assistance: DFIs often provide technical assistance to borrowers, such as helping them prepare business plans and conducting feasibility studies.
4. Mobilizing private sector investment: DFIs play a key role in mobilizing private sector investment by providing funding and technical assistance to small and medium-sized enterprises, which are often overlooked by traditional banks.
5. Supporting policy and regulatory frameworks: DFIs support the development of policy and regulatory frameworks that promote economic growth and social welfare, including environmental and social standards.
6. Promoting sustainable development: DFIs promote sustainable development by investing in projects that have a positive social and environmental impact, while also generating financial returns.
7. Promoting investment of capital in public and private Sector for development
8. Mobilizing resources and use them judiciously and productively
9. Providing technical assistance to help prepare, finance and carry out development projects and programmes
10. Co-operative with Governments, Reserve Bank of India, with other development banks and other organizations
11. Promoting institutional infrastructure to accelerate the process of economic development
12. Train entrepreneurs and professional managers

DFIs are important institutions for promoting economic development, particularly in emerging economies, and they play a vital role in mobilizing private sector investment for developmental projects.

Download Study Notes PDF

development finance.pdf 

Development Finance 1.pdf 

Register as member and login to download attachment use this only for Educational Purpose

FD Planning Community Forum Discussion

• State Finance Commissions and Rural Local Bodies Devolution of Resources
• Interview with B K Sinha – The Municipal midas
• Municipal bond in India
• Bilateral and Multi-lateral Financial Institutions
• Cost recovery
• Investment needs and Budgeting for Infrastructure and Service in Metro towns
• Subsidy Reduction
• Revenue Sources of Controlling Authorities
• Public Private partnership

Disclaimer

Information on this site is purely for education purpose. The materials used and displayed on the Sites, including text, photographs, graphics, illustrations and artwork, video, music and sound, and names, logos, IS Codes, are copyrighted items of respective owners. Front Desk is not responsible and liable for information shared above.