We know that finance doesn’t work as efficiently or effectively in most emerging economies. Transaction costs are higher. Risks are higher. There are macroeconomic and other issues that affect the cost of funds. These factors increase the cost of financing (the ‘pricing stack’, and as a result, financial markets aren’t as deep or as broad as they are in developed countries, and fewer people have access.
But for development organizations, finance is an enabler of many development outcomes, and private capital can help us do more with our limited resources. As investment catalysts, we look to interventions that lower transaction costs, risks, and the cost of funds--things that squeeze the pricing stack to make financing more affordable to more people.
In this section, use the menu on the left (organized by the Five-Point Framework) to find potential interventions that development professionals can consider to improve the systemic conditions for private finance--enabling conditions and financial infrastructure, or to support financial seekers and providers more directly. There is also a special section for facilitators and disruptors.
Because finance is complex, it is not likely that any one intervention alone is going to be effective, but by exploring options and learning from everyone contributing to this wiki, we hope this tool will help you identify the best set of interventions for your development challenge.
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