Blended Binds: How DFI’s Support Programs Stifle Bank Lending in Africa
July 10, 2024
This paper analyzes the impact of development finance institutions' (DFIs) support on the lending activity of private banks in Africa. This tool is essential for supporting SMEs in developing countries. The study highlights a slowdown in bank lending following DFI support. Additional analyses suggest that this counterintuitive outcome may be due to absorption challenges faced by supported banks. This study provides crucial insights into assessing DFIs' performance in improving credit access in Africa.