- DFIs were established mainly to cater to the demand for long-term finance.
- This was primarily for the industrial sector.
- They provide long-term loans, equity capital, guarantees, and underwriting functions.
- They assist in activities or sectors where risks are higher than commercial banks would bear.
- They also help upgrade managerial and operational prerequisites of assisted projects.
- DFIs play a “gap-filler” role where financial markets are incomplete.