The private sector is recognized as a critical stakeholder and partner in economic development, a provider of income, jobs, goods, and services to enhance people’s lives and help them escape poverty. Multilateral development banks and bilateral development finance institutions (together in this report called International Finance Institutions, or IFIs) play a significant role in supporting the private sector in developing countries. They provide critical capital, knowledge, and partnerships; help manage risks; and catalyze the participation of others. They support the kind of entrepreneurial initiatives that help developing countries achieve sustainable economic growth.
This role is becoming increasingly important for development institutions, along with more traditional aid and public sector financing.