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Development finance institutions and the coronavirus crisis

Briefing/policy papers

Written by Stephany Griffith-Jones, Dirk Willem te Velde

Hero image description: Kristalina Georgieva (Managing Director, IMF) and David Malpass (President, World Bank Group) at a press conference on the Covid-19 response, 3 March 2020 Image credit:World Bank / Grant Ellis Image license:CC BY-NC-ND 2.0

Key messages

  • Development finance institutions (DFIs) are mandated by their shareholders to provide finance to the private sector (usually at commercial terms, but subsidised implicitly), crowd in private sector finance and have a development impact.
  • While DFIs aim to be additional to the market, they have not been sufficiently counter-cyclical in past crises. That has to change, as poor country firms and their workers now face major hardship. Today’s crisis is larger than those in the past.
  • We suggest shareholders provide regulatory and financial space for DFIs to fast-track new investments, allow for some repayment postponements and announce a Bounce Back Better facility, to save companies and workers from bankruptcy and to protect previous transformation efforts so that the bounce-back is faster and better.
Kristalina Georgieva (Managing Director, IMF) and David Malpass (President, World Bank Group) at a press conference on the Covid-19 response, 3 March 2020
Stephany Griffith-Jones and Dirk Willem te Velde