Development Finance Institutions (DFIs) provide finance and expertise to support economic transformation, improve livelihoods and advance sustainable development. They address financing gaps that prevent businesses, communities and public authorities from investing in projects with development benefits.
DFIs operate at national, regional and international levels. Their mandates and institutional structures vary: some focus on domestic investment, while others support development across borders.
The global database jointly developed by the Agence Française de Développement (AFD) and Peking University’s Institute of New Structural Economics (INSE) places public development banks (PDBs) and development finance institutions (DFIs) within a common framework: financial institutions with an explicit public policy mandate, whose strategic direction is shaped by governments.
What do DFIs do?
1. Finance productive investment and infrastructure
DFIs support investment in sectors such as energy, transport, agriculture, industry, healthcare and digital connectivity. They can provide longer financing terms and structures suited to investments whose benefits and revenues develop over time.
2. Expand access to finance
DFIs help businesses and underserved groups obtain financing that is otherwise unavailable or insufficient. Depending on their mandate, they support small and medium-sized enterprises, entrepreneurs, rural producers and local financial institutions through direct financing or partnerships with intermediaries.
3. Mobilize investment and share risks
Through loans, equity investments, guarantees and co-financing arrangements, DFIs help make projects investable and attract other sources of capital. Their role is to complement commercial finance by addressing specific financing constraints, sharing risks and supporting the development of sustainable markets.
4. Support sustainable and inclusive development
DFIs can direct investment towards renewable energy, climate resilience, employment, essential services and economic inclusion. Their contribution depends on integrating environmental and social safeguards into financing decisions and assessing the development results of their operations.
5. Strengthen project preparation and institutional capacity
Finance alone is not always sufficient to bring an investment to completion. DFIs may also provide technical assistance, advisory services and sector expertise to improve project design, strengthen governance and help clients manage financial, environmental and social risks.
How do DFIs operate?
Depending on their structure, DFIs obtain resources from government contributions, retained earnings, borrowing in capital markets and partnerships with other financial institutions. They deploy these resources through instruments tailored to their mandates and clients’ needs.
Effective development finance combines development impact, sound risk management and financial sustainability. DFIs assess the viability of proposed investments, identify the value their involvement adds and monitor results. This added value—often called additionality—may include financing terms unavailable in the market, stronger project standards or investment in underserved sectors and locations.
DFIs, trade and South–South cooperation
DFIs and export-import banks have complementary roles in connecting productive investment with trade. Depending on their mandates, they help businesses expand production, enter new markets, participate in regional value chains and finance cross-border infrastructure.
For G-NEXID, cooperation among these institutions creates opportunities to share expertise, identify co-financing prospects and develop practical responses to common financing challenges. Such partnerships can strengthen South–South trade and investment while supporting sustainable development across the Global South.
List of DFIs
The Public Development Finance Flagship Database Report Series aims to develop a comprehensive global database of development finance institutions (DFIs) and advance research into their purpose, operations, performance and impact. By strengthening knowledge of these institutions, the series seeks to inform policy and practice and contribute to better development outcomes.