Fm.co.za – Financial Mail
Development finance institutions (DFIs) are often criticised for being far too conservative when it comes to funding entrepreneurs, particularly those with little or no collateral. The Industrial Development Corp (IDC), National Empowerment Fund (NEF) and Development Bank of Southern Africa (DBSA) have all been accused of behaving like commercial banks.
It's true that as providers of capital they have to consider risks, returns and the viability of the projects they fund – but their responsibilities are even more complex.
According to the UN, the primary mandate of a DFI is to address market failures, and this may involve “income redistribution and the development of new industrial sectors or the boosting of weak ones”.
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