In this post, we would be covering one of the very important topics of the banking awareness section : International Financial Institutions.
What are International Financial Institutions?
An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence are subjects of international law. Its owners or shareholders are generally national governments, although other international institutions and other organizations occasionally figure as shareholders.
International financial institutions include public banks, such as the World Bank, International Monetary Fund, and regional development banks. They provide loans, grants, and technical assistance to governments, as well as loans to private businesses investing in developing countries.
NOTE: Development Financial Institutions (DFIs) occupy the space between public aid and private investment. They are financial institutions, which provide finance to the private sector for investments that promote development. They focus on developing countries and regions where access to private sector funding is limited.
The following table shows everything you need to know about the most prominent international financial institutions.
| Name of the Institution | Year | Headquarters | President | Functions |
| African Development Bank (ADB) |
1964 | Abidjan, Côte d’Ivoire |
Akinwumi Adesina | It is established to contribute to the economic development and social progress of African countries. The primary function is to provide loans and equity investments for the socio-economic advancement, technical assistance for development projects, and assists in organizing the development policies. |
| Asian Development Bank (ADB) |
1966 | Mandaluyong, Philippines |
Takehiko Nakao | It works on reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. This is carried out through investments in the form of loans, grants and information sharing. |
| Asian Infrastructure Investment Bank (AIIB) |
2015 | Beijing, China | Jin Liquin | Its function is to support the building of infrastructure in the Asia-Pacific region. The bank has 50 member states (all “Founding Members”) and was proposed as an initiative by the government of China. |
| European Bank for Reconstruction and Development (EBRD) |
1991 | London | Suma Chakrabarti | It offers project financing for banks, industries and businesses, for new ventures or existing companies. It works with publicly owned companies to support their privatization, as advocated by the WTO since the 1980 and in the improvement of municipal services. |
| European Investment Bank (EIB) |
1958 | Luxembourg | Werner Hoyer | It is a “policy-driven bank” whose shareholders are the member states of the EU. The EIB uses its financing operations to bring about European integration and social cohesion. |
| International Monetary Fund (IMF) |
1944 | Washington D.C. United States |
Christine Lagarde | Promote international monetary co-operation, facilitate international trade, foster sustainable economic growth, make resources available to members experiencing balance of payments difficulties. |
| Islamic Development Bank (IDB) |
1975 | Jeddah Saudi Arabia |
Ahamad Mohamed Ali Al Madani |
This is a multilateral development financing institution which helps in the development of member states. The basic condition for membership is that the prospective member country should be a member of the Organization of Islamic Cooperation. |
| World Bank Group (WBG) | 1944 | Washington D.C. United States |
Jim Yong Kim | The World Bank focuses on developing countries in fields such as: human development, agriculture and rural development, environmental protection, infrastructure, large industrial construction projects, and governance. |
Hope this helps.
All the best!
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