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Working Paper 174 - African Development Finance Institutions: Unlocking the Potential

14-Jun-2013

The recent financial crisis has triggered new debates on the role of the state in the economy, particularly in the financial sector, contributing to renewed interest among policymakers in the role of development finance institutions (DFIs).2 In many economies, DFIs played an important countercyclical role by expanding their activities to prevent a sharp credit crunch in light of deleveraging and increased risk aversion by private agents. A current challenge is how to ensure that DFIs are effectively used as counter-cyclical policy instruments, while simultaneously guaranteeing that they play an active role in promoting financial access as well.

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