Market failure or failed market?
JOHANNESBURG – The financing that was extended by the Development Bank of Southern Africa (DBSA) to SAA has brought into focus the role of the Development Finance Institutions (DFI’s), particularly a national DFI such as the DBSA.
It has raised a number of economic and policy issues that were heretofore either avoided or skirted in the development policy space.
For the DBSA in particular the contradictions could not have been sharper, especially for the institution that has built its name as the financier of municipalities.
What is and what should be the role of DFIs? To be precise, was the facility extended to SAA consistently within DBSA’s mandate and role?
Conventional wisdom says that the DFI should be the lender of first, and not last, resort.
Source: iol.co.za