Eine Aufgabe der Development Financing Institutions (DFIs) ist es, ein effektives und organisiertes Entwicklungsprogramm für Unternehmen zu entwickeln. Hierfür müssen zum einen geeignete Unternehmen ausfindig gemacht werden, zum anderen müssen diese die notwendige Unterstützung erhalten, um im Sinne der DFIs arbeiten zu können. In verschiedenen Aufsätzen werden Situation und Erfahrungen von Neuseeland, Korea, Indien, den Philippinen, China und Malaysia geschildert. (DÜI-Xyl)
The landscape of South African National Development Finance Institutions (DFIs) is comprised of twelve entities. Their institutional objectives range from supporting farmers, financing industrialisation, infrastructural development, and promoting financial inclusion. These DFI objectives fall under the umbrella of Private Sector Development (PSD) interventions. Literature established that the success of PSD is contingent on effective impact evaluation. Consequently, the main research question explored in this dissertation is: In what ways, and using what tools and systems, do South African DFIs measure the development impact of their investments? In support of the main question, two sub-questions were are also investigated. Firstly, whether impact evaluation systems provide credible, timely and relevant information. Secondly, whether impact evaluation systems support evidence-based decision making and learning. In response to these questions, a qualitative case study of six National DFIs was carried out. Semi-structured interviews were conducted with DFI staff members involved in impact evaluation. This was supported by secondary data from annual reports and organisational websites. It was established that, firstly, DFIs use non-uniform impact evaluation systems and tools to measure the impact of their investments. Secondly, the systems lack qualitative detail and focus on measuring outputs instead of outcomes. Thus, much emphasis is placed on monitoring instead of impact evaluation. This renders the impact evaluation systems and tools highly ineffective. Finally, whilst the avowed objective of DFIs is development, financial viability takes precedence when selecting projects. Therefore, an emerging conclusion was that systems in place do not support development impact evidence-based decision-making. These findings generated recommendations for changing the development impact evaluation tools and systems used by South African National DFIs. It is expected that recommended changes will maximise DFI socio-economic benefits.
AbstractSouth African development finance institutions (DFIs) have extensive portfolios of projects they finance, with a remit that reaches beyond the domestic scene. Indeed, these DFIs are a product of history and have evolved to correspond to the country's postapartheid dispensation. In the past, South African DFIs were used to reinforce the political ideology of apartheid and its policy of separate development. Postapartheid DFI mandates have however changed significantly. They are not just instruments of the state's developmental agenda at the domestic level, but those also active in the region. We characterise this interlinkage of domestic developmentalism and regional orientation as strategic regionalism. The major focus of this article is to survey the role of South African DFIs in the African continent while also critically reviewing their relationship with the state's developmental paradigm and regional strategy.
AbstractDevelopment finance needs to be better aligned with climate change objectives, and many experts see net zero portfolio targets as a powerful way to achieve this. This paper explores the operational implications of net zero portfolio targets for development finance institutions (DFIs). We set out an agenda to move development finance towards net zero goals in a way that acknowledges development concerns. These include (1) setting context‐specific emissions pathways with granular bottom‐up data and emphasising climate‐development win‐wins; (2) dealing with inertia and lumpiness in the portfolio through 'when' flexibility (multiyear carbon budgets) and 'where' flexibility (sharing of carbon space); (3) encouraging transition projects through future‐emissions accounting and transition credits; (4) managing climate‐development and other trade‐offs with an internal carbon price and ESG standards; and (5) accounting for emissions after project‐end with monitoring and legal provisions.
This study reviews the approach to development finance adopted by Ghana and takes stock of the current situation of development finance institutions (DFIs). The study then articulates a set of key principles relevant to Ghana reflecting international experience. The intention is to provide the basis for dialogue on new approaches to making Ghana's policies and institutions more consistent with good practices in development finance. The study does not venture into detailed assessment of particular institutions due to the unavailability of required data for such an assessment. The paper primarily focuses on DFIs targeted toward the priority areas of micro, small and medium enterprises (MSMEs) and non-traditional exports, which are relevant for access to finance and the financial inclusion agenda. Particular attention is paid to their targeting, cost-effectiveness, market distortions, and governance. A review of international experience with DFIs finds that cost-effectiveness tends to be greatest and market distortions lowest when development finance is provided on a wholesale basis through commercial financial institutions that bear the risk and are empowered to make loan decisions, based on well-defined and targeted eligibility criteria. Direct intervention by government in allocation and in setting interest rates tends to undermine sustainability, impact, and willingness of beneficiaries to repay funds that they perceive as politically motivated. Ghana's approach to development was state-led in the post-Independence period through the mid-1960s, and highly interventionist during the 1970s and early 1980s, after a brief period of stabilization. Controls were gradually removed in the late 1980s, and financial policies were liberalized. During the period 1985-2006, the government and the Bank of Ghana (BoG) established a number of institutions to promote and finance MSMEs and exports, especially in agricultural value chains. While the majority operate through private financial institutions, some of these institutions provide finance directly, increasing the cost and risks and reducing effectiveness. Although some of these institutions managed or benefited from donor-supported government projects in the past, little such funding remains available, especially for MSMEs, resulting in low cost-effectiveness and sustainability for some DFIs. Several institutions have come to depend largely on funds from the Export Trade, Agricultural and Industrial Development Fund (EDAIF), which is funded through a levy on imports. However, an interest rate cap of 12.5 percent is imposed on funding provided by EDAIF, which is well below market rates and tends to result in rent-seeking, long delays while applications are vetted, and lack of interest by commercial financial institutions whose earnings are constrained by the interest rate cap.
The relationship between financial development and economic growth remains a crucial subject of exploration in the academic world. Although several therioes and studies have been conducted to assess casuality between these two economic indicator proxies, the results remain inconclusive as to whether financial development causes economic growth or the opposite is true. Furthermore, the link between development finance institutions and economic growth is yet to receive empirical examination in emerging markets such as South Africa. Since the emancipation of South African country from apartheid the government embarked on several strategies to boost economic growth, one of which is the outlay of funds from the fiscus to development finance institutions to boost capital formation, which in turn results in growth. Whether or not these institutions and the extensions they make results in economic growth is subject to research. This study explores the long and short run effect of development finance institutions extensions on economic growth in South Africa from 1995 to 2018. It utilises annual aggregated development finance institutions extensions and real GDP as proxies for DFIs development and economic growth respectively. The study employs the autoregressive distributed lag (ARDL) bounds tests approach to co-integration developed by (M. Hashem Pesaran, Shin, & Smith, 2001) to determine the relationship between development finance committments development and economic growth, along with Augmented Dickey-Fuller tests and Philip Perron tests to test for unit roots on the data. The data was obtained from SADC statistics, World Bank, South African Reserve Bank, Open Source Capital and OECD library. The results of the study found evidence to support a deterministic relationship between the DFIs development and economic growth after controlling for trade openness and stock market development. The long run effect of DFI_E on economic growth revealed that DFIs extensions show significant influence on economic growth in South Africa. It therefore recommendeds that South Africa's policy makers should focus on policies that allow proliferation and ease of capital movements for international DFIs in the country. Additionally, the study recommends that the South African government increase its funding to domestic DFIs from the fiscus to enhance economic growth.
The paper analyses the repayment trends of two DFIs (Development Finance Institutions) between 1976 and 1987). Based on data generated through a survey of 511 industrial projects located in the private sector, the paper provides an adequate basis for evaluating the overall impact of the various policy measures (including legal actions) enacted by successive regimes to expedite the process of loan recovery. (DÜI-Sen)
South Africa has been experiencing an unprecedented increase in youth unemployment in the past 5 years and the level of entrepreneurial activities amongst young people is very low reported at 8.9% below international average of 11.9 % as at 2014. This situation still manifest itself even after the government of the Republic of South Africa (RSA) took a policy stance in tasking the National Development Agency (NYDA) to place youth entrepreneurship at the core of its programs to ensure that young people in their numbers participate in the mainstream economy. Previous research conducted in the country about the state or levels of youth entrepreneurship, attributed the shortcomings to funding gaps left by commercial banks, lack of business skills, lack of concerted efforts to have curriculum that is focused on entrepreneurship in universities but at the core of it all, funding is cited as the biggest challenge experienced by young people willing to start and run their own businesses. In the country with a sophisticated financial sector and DFIs highly liquid, yet we still have funding challenges and procedural bottlenecks experienced by sectors of society interested in establishing businesses. It is out of these challenges that this research seeks to investigate into the mechanisms used by South African DFIs (NYDA and Awethu projects) to fund youth enterprises in the country. This Research used a qualitative approach to analyse primary and secondary data collected from the NYDA, Awethu projects and IDC This research found that public DFIs have a wider reach compared to private DFIs because it is easy to set up offices in municipalities like the case of the NYDA and the IDC. Private DFIs will also struggle against public DFIs in servicing a wider range of youth enterprises because of government guarantees that could always be activated in times of financial stress. It also made a finding that Awethu projects emphasise the need for employment creation when qualifying enterprises from one funding band to the next compared to the NYDA. The three institutions have sound and functional credit committees that ensure that prejudice is eliminated from the appraisal processes. Lastly the NYDA spends majority of its budget on salaries compared to the mandate which it exists for. On average, about 39% of its budget goes to servicing internal human resource issues as compared to 8.31% budgeted to fund youth businesses.
