What is a development bank and what are its key characteristics?
Understand the Problem
The question is providing detailed information about development banks, including their definitions, characteristics, and roles in economic development. It aims to explain the function and importance of development banks in supporting industrial and entrepreneurial growth.
Answer
A development bank provides medium- and long-term capital for productive investments, especially in developing economies, serving public interests, offering financial assistance to both public and private sectors, and promoting economic development.
A development bank is a multipurpose financial institution that provides medium- and long-term capital for productive investments, often accompanied by technical assistance, in industrial and agricultural sectors, particularly for the development of large, medium, and small industries in developing economies. Key characteristics include serving public and national interests, not accepting demand deposits, providing financial assistance to both public and private sector undertakings, and promoting economic development.
Answer for screen readers
A development bank is a multipurpose financial institution that provides medium- and long-term capital for productive investments, often accompanied by technical assistance, in industrial and agricultural sectors, particularly for the development of large, medium, and small industries in developing economies. Key characteristics include serving public and national interests, not accepting demand deposits, providing financial assistance to both public and private sector undertakings, and promoting economic development.
More Information
Development banks play a crucial role in stimulating industrial and economic development, especially in their focus on providing long-term finance and supporting construction, infrastructure, and environmental projects.
Tips
A common mistake is confusing development banks with commercial banks. Unlike commercial banks, development banks don't accept demand deposits from the public and primarily aim to promote economic development.
Sources
- What are the Characteristics of Development Banks? - Quora - quora.com
- Development Bank: Introduction, Features, Objectives & Functions - techykhushi.medium.com
- Britannica – Development Bank - britannica.com
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