Development Banks Impact on Economic Development - 3189 Words

NATIONAL AND REGIONAL DEVELOPMENT BANKS AND THEIR IMPACT ON ECONOMIC DEVELOPMENT APRIL 3, 2011 Financial Sector An economy’s financial markets are critical to its overall growth and development. Banking systems and stock markets enhance growth and are considered the main factor in poverty reduction. Strong financial systems provide reliable and accessible information that lowers transaction costs, which in turn bolsters resource allocation and economic growth. Development Banks are one such member of the financial institutions that can affect growth and development of a country and the regions within its sphere of influence if it provides the accessibility, stability, and efficiency in financial resource allocation to deficit†¦show more content†¦2. It is a specialized financial institution which provides medium term and long-term lending facilities. 3. It is a multipurpose financial institution. Besides providing financial help it undertakes promotional activities also. It helps an enterprise from its planning to operational level. 4. The objective of these banks is to serve p ublic interest rather than earning profits. 5. Development banks react to the socio-economic needs of development 6. The role of a development Bank is of a Gap Filler. When assistance from other sources is not sufficient then this channel helps. It does not compete with normal channel of finance. 7. Development banks primarily aim to accelerate the rate of growth. It helps industrialization specific and economic development in general Principal Source of Funds for Development Banks (Resources Available) Most Development Banks including the Caribbean Development Banks source of funds are of two kinds: ordinary operations and special operations. Ordinary operations are financed from share capital, the proceeds of loans raised in capital markets or borrowed or otherwise acquired by e.g. CDB for inclusion in its Ordinary Capital Resources (OCR) and its ordinary reserves. Regionally, CDB special operations are financed from the Special Development Fund (SDF) (see Appendix C) andShow MoreRelatedThe Negative Impacts Of International Financial Institutions In Africa, Africa991 Words   |  4 Pagesresources. The governments of some regions in the country received aids from International financial institutions (IFI) – and the International Monetary Fund (IMF) and the World Bank (WB) – to increase productivity and industrial capacities to boost their economic growth faster. However, there has been a huge negative impact on the conditions of local economy and agricultural productions, natural resources, employment and the services of education and health care. This affects similarly to other developingRead MoreRelationship Between Financial Development And Economic Growth922 Words   |  4 PagesIntroduction The relationship between financial development and economic growth has elicited plenty of debate over the last few years. 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