An increasing amount of development aid is currently being channeled through the private sector. In most European donor countries Development Finance Institutions (DFIs) have been tasked to leverage private investments in developing countries.
DFIs are institutions with an explicit developmental mandate and have thus a responsibility not only to avoid doing harm, but also to demonstrate a positive developmental outcome. Their rationale is to be additional in the sense that they should make investments with high development impact – investments that the private sector would not otherwise consider lucrative.
The report “Investing in private sector development: What are the returns?” is commisioned by Norwegian Church Aid and written by Sarah Bracking and Ana Sofia Gahno from the University of Manchester.
This report reviews current development impact evaluation systems in European DFIs. It raises important questions regarding both the methodologies and indicators used by the DFIs, and the extent to which the DFIs are accountable – both to their own measurement systems and to the communities that are affected by their investments. The study also shows that there are differences between the various DFIs, with some providing examples of best practices that can be replicated by others. It concludes by suggesting additional criteria for an improved measurement system.
For the report please go to: