Development finance is a branch of
development studies
Development studies is an interdisciplinary branch of social science. Development studies is offered as a specialized master's degree in a number of reputed universities around the world. It has grown in popularity as a subject of study since the ...
that deals with financing of economic and social development. It typically involves of both the mobilisation and dispersion of domestic and international sources of fiance. At the international level
Foreign Aid
In international relations, aid (also known as international aid, overseas aid, foreign aid, economic aid or foreign assistance) is – from the perspective of governments – a voluntary transfer of resources from one country to another. The ...
, in particular
Official Development Assistance (ODA),
Development aid
Development aid (or development cooperation) is a type of aid given by governments and other agencies to support the economic, environmental, social, and political International development, development of developing countries. It is distinguishe ...
and charitable and philanthropic contributions, and
Foreign Direct Investment (FDI), and flows of
remittances from overseas workers are looked at. Domestically both the traditional banking sector and the less formal sectors are investigated as is
Microfinance
Microfinance consists of financial services targeting individuals and small businesses (SMEs) who lack access to conventional banking and related services.
Microfinance includes microcredit, the provision of small loans to poor clients; saving ...
. The activities and role of
Development finance institutions (DFIs) both national and international ones form a large part of the subject matter analysed.
Tony Atkinson (2004), concentrating on looking for new sources of funding development, lists the following:
* Global environmental taxes
* Currency transactions tax (
Tobin tax)
*
Special Drawing Rights (SDRs)
*
International Finance Facility (IFF)
* Private donations
* Global lotteries or premium bonds
* Remittances from emigrants
A glossary
Saldinger (2017) has provided a useful glossary of development finance terminology. The terms include:
* Results-based financing, (performance-based financing or pay-for-success)
*
Social impact bonds
* Development impact bonds
*
Blended finance or blended capital
* Concessional loans
* Loan guarantee
* Impact investing
* Green bonds, climate bonds and more
* Domestic resource mobilization
* Venture capital
* Remittances
* Diaspora bonds
Other topics that are typically looked at include:
Financial repression and
financial liberalisation; the Political economy of development finance;
Financial crises
A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with Bank run#Systemic banki ...
and development;
Financing
Small and medium enterprises
Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by many national agencies and international organizat ...
in developing countries
[University of Reading - ADMDFI: Development Finance https://www.reading.ac.uk/modules/documents?acyear=2025%252f6&modcode=ADMDFI&schoolcode=APD]
Journals
There are several academic journals devoted to its study. These include:
* Review of Development Finance, Sabinet African Journals
*
Finance and Development, IMF
* African Development Finance Journal (ADFJ), University of Nairobi.
References
{{DEFAULTSORT:Development finance
Aid
International development
Development economics
Development studies