A significant proportion of DFI financing is channelled through financial intermediaries (FIs) such as national and commercial banks in developing economies, microfinance institutions, and private equity funds. These types of institutions allow DFIs to significantly broaden their scope and reach more clients by effectively disaggregating finance to a scale suitable for smaller stakeholders such as SMEs. However, the introduction of an additional step in the financial value chain has implications for transparency; the extent and detail of sub-project disclosure is almost always less than that with direct investments. The use of offshore financial centres (OFCs), often classified as tax havens, has been a controversial aspect of DFI investment. OFCs commonly have strict banking secrecy laws resulting in limited levels of transparency which has implications for issues such as the disclosure of beneficial ownership of client companies.
/ / / Work Stream 5: Financial Intermediaries, Offshore Financial Centres & Beneficial Ownership
Project Advisory Board
The Project Advisory Board provides strategic guidance to the DFI Transparency Initiative, and brings together a wealth of experience and expertise on DFI operations, transparency, and development.
Objectives, Approach & Methodology
The main objective of our DFI Transparency Initiative is to increase transparency on the use of public funds, including official development assistance (ODA), for private sector investments through DFIs.
Work Stream 4: Value of Investment: Mobilisation & Structure of Deal
Timely, systematic, and standardised disclosure of financial information would allow DFIs to have a powerful demonstration effect in the markets they work in. The 4th work stream of our DFI Transparency Initiative assesses the extent to which DFIs disclose a range of financial information at both the activity and aggregate levels. Our working paper, published in May 2021, found that there is inadequate disclosure of both aggregate and disaggregated financial information across the DFIs.