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|
|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.
|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.
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
|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
|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
|Christine Lagarde||Promote international monetary co-operation,
facilitate international trade, foster
sustainable economic growth, make
resources available to members experiencing
balance of payments difficulties.
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.
|Jim Yong Kim||The World Bank focuses on developing
countries in fields such as:
agriculture and rural development,
large industrial construction projects,
Hope this helps.
All the best!