Development finance is the invisible glue that connects public and private financing for projects that have social, economic and environmental outcomes. These include improved infrastructure, better waste management and sanitation, financial inclusion, clean energy and sustainable agriculture.
Development finance considers other factors alongside risk and return. Social impact may be one. Because it applies a wider lens, other key players are more involved. They include:Financial institutions, such as banks, insurance companies, investment companies and pension funds, do also get involved sometimes. But this is usually through the use of responsible investment strategies. These incorporate environmental, social and governance factors into investment decisions.
The problem with relying on national budgets is that it places a lot of pressure on the taxpayer as a source of revenue.