multilateral development bank

Syllable breakdown

Dictionary meaning

an international financial institution created by two or more countries to provide financing and professional advisory services for the purpose of economic and social development, distinguished from bilateral aid agencies by their multilateral ownership structure and from commercial banks by their development mandate and concessional lending terms; the multilateral development bank system comprises the World Bank Group and its affiliates, the regional development banks, and specialised institutions including the International Fund for Agricultural Development and the Green Climate Fund; MDBs occupy a central position in the development finance architecture because their preferred creditor status allows them to borrow cheaply on capital markets and onlend at concessional rates to developing countries, and because their technical assistance and knowledge functions complement their financing; reform of the MDB system to better address climate change, pandemics, and fragility — including expansion of balance sheets, new instruments for mobilising private finance, and revision of risk frameworks — has been a central theme in international development finance debates since the early 2020s