Major Role and Goal of IFI's: Financial Institution International Law International Institutions

1. What are IFI?
An international financial institution (IFI) is a financial institution that has been established (or

chartered) by more than one country, and hence is subject to international law. Its owners or
shareholders are generally national governments, although other international institutions and other
organizations occasionally figure as shareholders. The most prominent IFIs are creations of multiple
nations, although some bilateral financial institutions (created by two countries) exist and are
technically IFIs. The best known IFIs were established after World War II to assist in the
reconstruction of Europe and provide mechanisms for international cooperation in managing the
global financial system.
2. Major role and goal of IFI’s

In many parts of the world, international financial institutions (IFIs) play a major role in the social
and economic development programs of nations with developing or transitional economies. This
role includes advising on development projects, funding them and assisting in their implementation.
Characterized by AAA-credit ratings and a broad membership of borrowing and donor countries,
each of these institutions operates independently. All however, share the following goals and
objectives:
 to reduce global poverty and improve people's living conditions and standards;
 to support sustainable economic, social and institutional development; and
 to promote regional cooperation and integration.
1. How IFI’s achieve their goals?
IFIs achieve these objectives through loans, credits and grants to national governments. Such
funding is usually tied to specific projects that focus on economic and socially sustainable
development. IFIs also provide technical and advisory assistance to their borrowers and conduct
extensive research on development issues. In addition to these public procurement opportunities, in
which multilateral financing is delivered to a national government for the implementation of a
project or program, IFIs are increasingly lending directly to non-sovereign guaranteed (NSG)
actors. These include sub-national government entities, as well as the private sector.
2. Types of IFI’s:
During recent years, IFIs have made considerable progress in harmonizing the way they procure
goods and services. In many cases, they are now using similar policies and procedures, although
the interpretation of these approaches may still vary at the level of the individual institution. In the
sections that follow, we'll look at the common features of IFI procurement and how it works. Skip
directly to the section on:
There are next tyeps of IFI’s:

 Mulitlateral Development Banks,
 Bretton Woods Institutions,
 Regional Developement Banks,
 Bilateral development banks and agencies.
Multilateral Development Banks

A multilateral development bank (MDB) is an institution, created by a group of countries, that
provides financing and professional advice to enhance development. An MDB has many members,
including developed donor countries and developing borrower countries. MDBs finance projects
through long-term loans at market rates, very-long-term loans below market rates (also known as
credits), and grants.
The following are usually classified as the main MDBs:
• World Bank
• European Investment Bank (EIB)
• Islamic Development Bank (IsDB)
• Asian Development Bank (ADB)
• European Bank for Reconstruction and Development (EBRD)
• CAF - Development Bank of Latin America (CAF)
• Inter-American Development Bank Group (IDB, IADB)
• African Development Bank (AfDB)
• New Development Bank (NDB)
• Asian Infrastructure Investment Bank (AIIB)
• Arab Petroleum Investments Corporation (APICORP)
• Eastern and Southern African Trade and Development Bank (TDB)
Bretton Woods institutions

The best-known IFIs were established after World War II to assist in the reconstruction of Europe
and provide mechanisms for international cooperation in managing the global financial system.
They include the World Bank, the IMF, and the International Finance Corporation. Today the
largest IFI in the world is the European Investment Bank which lent 61 billion euros to global
projects in 2011
Regional development banks

The regional development banks consist of several regional institutions that have functions similar
to the World Bank group's activities, but with particular focus on a specific region. Shareholders
usually consist of the regional countries plus the major donor countries. The best-known of these
regional banks cover regions that roughly correspond to United Nations regional groupings,
including the Inter-American Development Bank, the Asian Development Bank; the African
Development Bank; the Central American Bank for Economic Integration; and the European Bank
for Reconstruction and Development.
Bilateral development banks and agencies

A bilateral development bank is a financial institution set up by one individual country to finance
development projects in a developing country and its emerging market, hence the term bilateral, as
opposed to multilateral. Examples include:
• the Netherlands Development Finance Company FMO, headquarters in The Hague; one of

the largest bilateral development banks worldwide.
• the DEG German Investment Corporation or Deutsche Investitions- und
Entwicklungsgesellschaft, headquartered in Cologne, Germany.
• the French Development Agency, and Caisse des dépôts, founded 1816, both headquartered
in Paris, France.
• the CDC Group, is a development finance institution owned by the UK Government
headquartered in London.
1. For example
The World Bank
The World Bank mandate is to encourage poverty reduction and economic improvement longer
term. They do this by offering financial and technical assistance to aid countries which are trying to
reform sections of their economies or to develop particular projects. These projects could be
delivering electricity and water, constructing health centers and schools, safeguarding the
environment, or fighting disease. Such help as the World Bank provides is typically longer term in
nature and funded by contributions from member nations as well as by issuing bonds. The staff of
the World Bank is typically specialized in certain sectors, issues, or methods.
IMF
The IMF on the other hand operates under a mandate to foster monetary cooperation on an
international level while it offers technical assistance and policy advice to help countries to develop
and keep more prosperous and stronger economies. As part of this, the IMF offers loans. They also
help nations to create policies and programs that will address their imbalance of payments if they
are unable to obtain affordable term financing to meet their international financial obligations.
These loans are either medium or short term. The funds come from the quota contributions’ pool
provided by member states. The staff of the IMF is mainly economists who possess vast experience
with financial and macroeconomic issues.

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What are the major roles and goals of IFIs?

How do IFIs achieve their goals?

1. What are IFI?

An international financial institution (IFI) is a financial institution that has been established (or

2. Major role and goal of IFI’s

 to support sustainable economic, social and institutional development; and

 to promote regional cooperation and integration.

1. How IFI’s achieve their goals?

There are next tyeps of IFI’s:

Multilateral Development Banks

The following are usually classified as the main MDBs:

Bretton Woods institutions

Regional development banks

Bilateral development banks and agencies

• the Netherlands Development Finance Company FMO, headquarters in The Hague; one of

The World Bank

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