DFC Marks 60th Anniversary with Plans to Transform into a Full-fledged Development Bank

The Development Finance Corporation is celebrating its 60th anniversary.  It is the norm that such a milestone will bring reflection and plans for the way ahead.  For the DFC, its Chief Executive Officer, Henry Anderson, is hoping to transform the organization into a full-fledged development bank.  For all intents and purposes, the DFC does operate as a development bank, but in order for it to be on the same operational level as development banks in the region, it will have to put in some work.  CEO Anderson explain that the transformation would have to see the DFC engage in public private partnership and incorporate second tier lending.  .  

Eric Anderson, Chief Executive Officer, DFC: If you look lets say development banks in Latin America and let’s go to Bank of Jamaica they do what is called second tier lending and if the government wants to do an infrastructure project they have the ability to mobilize capital and bring it into the development space, we don’t do that. We simply go and borrow from IDB or CDB so we need to be able to change that. Public private partnerships, so the government there is a unit in the Prime Minister’s office. In Jamaica for example that’s in the Bank of Jamaica and it has the technical expertise to build those things. Belize issued a blue bond maybe ten years down the road when we want to issue something else DFC will have the ability to be the one to underwrite that. We will definitely need support from other larger financial institution so for example with the Blue Bond for Belize because Belize’s credit rating wasn’t a the level we wanted it to be the US DFC, the US has a DFC, they were the ones who put a guarantee in place and that increased the risk rating and proved the risk rating of the bond to make it sellable. Other development banks in other countries are able to offer guarantees. So you hear you have liquidity in the commercial sector well one of the jobs of a development bank should be to see how you can take a portion of that liquidity and get it into the development space. The development of a country isn’t for government alone it’s for government and the private sector but the private sector will not be able to take the risk that DFC takes. The commercial banks are lending your money when you safe so they have to be prudent and careful. Our job should be to collaborate with them to derisk the projects by bringing guarantees in place to be able to do that. So those are more complex products that DFC cannot offer yet because we need to build the competency to do it.”

Later in this newscast, we’ll bring you highlights of the DFC’s anniversary ceremony held at the Biltmore this morning.