Special Edition USDFC Monitor: Introducing the DFI Dashboard

The new US International Development Finance Corporation (DFC) has opened its doors! And with that, CGD is launching the “DFI Dashboard”—an interactive tool for comparing the lending practices and policy frameworks of DFC and eight other development finance institutions.

Image

Why we built this tool

Development finance institutions (DFIs) are notoriously difficult to compare. There is a dearth of data around their activities and only a handful of DFIs systematically publish project-level information. In addition, DFIs classify key information in different ways. But the ability to compare their investment decisions is critical to understanding their impact.

The dashboard aims to fill this data gap. We aggregated and standardized all available programmatic information for nine prominent institutions. Users can compare annual lending data and disaggregate information by sector, financing instrument, country income classification, and region. The dashboard also includes a policy framework section that contrasts the organizations’ topline financial structures, accountability practices, and strategic objectives.

Our team deliberately chose a diverse group of institutions, including several “traditional” DFIs (IFC, CDC, DEG, Proparco, and FMO), “hybrid” DFIs like the Japanese Bank for International Cooperation (JBIC, which also serves as Japan’s export credit agency), as well as China Development Bank (CDB) and the Asian Infrastructure Investment Bank (AIIB). While the latter two organizations are not DFIs in the strictest sense of the term (i.e., they do not limit their activities to private sector projects), they are relevant for this exercise to provide representation for institutions from Asia and because they are major sources of infrastructure finance. These are roles DFC aspires to take on, and—in the case of CDB—directly compete with, by offering an alternative financing model. Both AIIB and CDB also have plans to scale up their private sector financing activities.

We hope that academics, policymakers, DFI staff, and the DFI-curious will use this dashboard to deepen the collective understanding of the roles DFIs play in global development.

Here are some interesting findings we have gleaned from the dashboard thus far:

• Finance and insurance are by far the most significant sectors for DFI investment. Infrastructure is second. We could see this trend change in the coming years as the European DFIs are directed to increasingly ramp up their financing for renewable power projects.

• Upper-middle income countries (UMICs) dominate the portfolios of most DFIs. In other words, they are not necessarily reaching the toughest markets. In 2017, Proparco and CDC stood out as notable exceptions, with the highest relative amount of their loan portfolio in low-income countries (LICs) of any of the DFIs. By contrast, our data for JBIC indicates that no investments in LIC countries were made in 2017.

• DFIs have diverse financial structures. Some DFIs are fully owned and financed by their national government. Others are owned by several different government ministries or by a combination of government entities and the private sector. Still other DFIs are financed through international capital markets. (And not all DFIs that go to capital markets have a triple A credit rating.)

We hope you find this to be a useful tool that sparks many insights and research projects. Please send any feedback or questions to Jocilyn Estes at jestes@cgdev.org. If you like what you see, please share our new tool on social media!