What Is a Multilateral Development Bank?

Multilateral development banks are institutions that provide financial assistance and professional advice to the economic and social development activities of developing countries. It is an international development public institution, which mainly relies on the financial support of rich industrialized countries. The oldest and most influential is the World Bank established in 1944.

Multilateral development bank

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Multilateral development banks are institutions that provide financial assistance and professional advice to the economic and social development activities of developing countries. It is an international development public institution, which mainly relies on the financial support of rich industrialized countries. The oldest and most influential is the World Bank established in 1944.

Multilateral development banks generally refer to the World Bank Group and the four major regional development banks:

Several regional banks established for development purposes are also classified as multilateral banks, and they are also owned by a number of countries (primarily borrowers, not donors). The main subregional banks include the Andean Development Corporation; the Caribbean Development Bank; the Central American Economic Integration Bank; the East African Development Bank; and the West African Development Bank.

Chinese name

Multilateral development bank

Definition

Institutions providing financial assistance to developing countries

Part of speech

noun

Classification

financial

1. It has a wide range of member countries, including both developing borrowing countries and developed donor countries, and the member countries are not limited to countries in which regional development banks are located.

2. Each bank is independent in terms of legal status and business, but their responsibilities are similar and there are a considerable number of co-owners.

3. Maintain high-level cooperation among multilateral development banks.

Multilateral development banks finance development through the following channels:

1. Long-term loans based on market interest rates. To raise funds for loans, multilateral development banks borrow from international capital markets and then refinance them to governments of developing borrowing countries.

2. Long-term loans (usually term loans). The interest rate of such loans is lower than the market interest rate. Funding comes from direct contributions from donor governments.

3. Some multilateral development banks also provide donations, most of which are to support technical assistance, consulting services or project preparation.

Some other banks and funds that provide loans to developing countries are also considered multilateral development agencies, and these agencies are often collectively referred to as other multilateral development agencies. These institutions differ from multilateral development banks in that they have a narrower scope of ownership / membership, or they focus their work on specific sectors or activities. These institutions are:

1.European Commission (EC) and European Investment Bank (EIB)

2. International Agricultural Development Fund (IFAD)

3.Islamic Development Bank (IDB)

4. Nordic Development Fund (NDF) and Nordic Investment Bank (NIB)

5. OPEC International Development Fund (OPEC Fund)