Development Finance Institution (DFI)

A Development Finance Institution (DFI) is a specialized organization that provides financial support—such as loans, grants, or equity investments—to promote economic growth, development, and poverty reduction in developing countries. Unlike commercial banks focused on profit, DFIs prioritize projects that improve infrastructure, healthcare, education, and other vital sectors, often taking on higher risks or offering favorable terms to stimulate investment in areas that might otherwise be underserved. They play a crucial role in fostering sustainable development by bridging financing gaps and encouraging private sector involvement in development initiatives.