Local public capital markets in developing economies can make a key mobilisation-based contribution to solving the local currency issue. Perhaps more crucially, they can provide populations with the fundamental ability to save and insure themselves, securing the financial stability that citizens of developed economies take for granted. Is the development finance system ready to channel resources through local markets rather than around them?

Banks play a crucial role in the development of their domestic financial systems, and are therefore central to the local currency question. This Short Read is the first episode of a series aimed at understanding the business models of commercial banks in Kenya and Nigeria and how they interact with and are influenced by development finance.

Proposing an additional “top-down” approach that leverages existing instruments utilised by institutional investors and exploring their potential to close the funding gap for sustainable development. By introducing securities aligned with sustainable development objectives into the mainstream indices that ETFs and other passive funds are benchmarked against, capital mobilisation can be achieved without resorting to complex structures unfamiliar to most investors.

This study reveals that private capital mobilisation for SMEs by DFIs is not happening in the way that it is usually accounted for and measured. Low mobilisation levels are reported at the point of investment but substantial private capital is being mobilised downstream. The report introduces a new concept: “secondary mobilisation”, and offers a practical roadmap by which to recognise, track, and scale this phenomenon.

Scaling local currency financing solutions in EMDEs requires addressing critical FX risks that limit the mobilisation of resources towards sustainable development outcomes. Challenges include structural constraints in MDB and DFI business models, underdeveloped local financial markets, and a lack of scalable instruments to engage institutional investors. This paper proposes solutions for expanding local currency financing flows and deepening domestic capital markets.

The development finance system of institutions holds immense value. Part of this value lies in the data yielded by their unique experience of lending and investing across developing economies. Sharing this data could accelerate our efforts towards sustainable development by enabling creativity, lowering the cost of capital for key stakeholders and harnessing competitive forces. Transparency has its costs, but these pale in comparison to the costs of prolonged opacity.

Risk transfer and securitisation have at long last been admitted to the development finance conversation. Perhaps owing in part to its contribution to the global financial crisis, any mention of securitisation in development finance circles is typically met with a varying mix of excitement and concern. It may therefore prove useful to demystify a comparatively straightforward mechanism and to assess the potential of its use to accelerate the financing of sustainable development.

This study investigates and compares the funding models of three of the 17 main bilateral DFIs. Its objective is to encourage conversation around their respective merits and demerits, to help stakeholders make informed decisions regarding the DFI’s balance sheet options and the use of debt capital markets-based leverage. This paper has been prepared as an input to the discussion on mobilisation in the OECD Development Assistance Committee CoP-PF4SD.

As the development finance system of institutions scrambles to mobilise capital markets, accurately assessing progress is necessary to develop an understanding of what the most effective strategies and instruments are, and what simply does not work. The adoption of methodologies delivering an overly optimistic picture of current achievements conversely presents a direct threat to the ability of the system to deliver on the objectives set by shareholders.

As global crises mount DFIs are increasingly being called upon and resourced to address these issues. It remains a challenge to know what investments are being made and the impact these are having. This report presents the findings of Publish What You Fund’s first DFI Transparency Index. The DFI Transparency Index is a comparative measure of the transparency of thirty leading DFI portfolios.

Numbers have a stubborn tendency to develop a life of their own. Measurements morph into targets, targets turn into ceilings, ceilings inevitably lead to optimisation, and the dynamics of optimisation create incentives. Incentives have real life consequences. The modernisation of the DAC Statistical System and the rules it sets for ODA reporting have far reaching implications for development finance.