About 30 multilateral development banks (MDBs) operate across the  globe today. While the World Bank and major regional MDBs (the  ‘legacy’ MDBs) have a high profile, most MDBs are less well known.

In light of the serious challenges facing the world and the limitations  of other development agencies, it should be a priority to integrate these MDBs into the international agenda and strengthen their  capacity.

Although most borrower-led MDBs remain relatively small, they are  growing rapidly. The outstanding loan portfolios of 10 borrower-led  MDBs grew from $7.2 billion to $73.4 billion between 2000 and 2021 – a 920% increase over two decades. Growth has been led by the  Development Bank of Latin America (CAF), the Central American  Bank for Economic Integration (CABEI), Afreximbank, the Trade and  Development Bank (TDB) and the West African Development Bank (BOAD). The Black Sea Trade and Development Bank (BSTDB), the  Eurasian Development Bank (EDB) and the Financial Fund for the  Development of La Plata Basin (FONPLATA) have grown more  modestly, while the Economic Community of West African States  (ECOWAS) Bank for Investment and Development (EBID) and the  East African Development Bank (EADB) remain small.

This paper provides an overview of the governance, operational and  financial characteristics of 10 borrower-led MDBs operating in lowand middle-income countries, offers three case studies highlighting  their innovations and developmental potential and proposes policy  options to help improve the effectiveness of these MDBs.

This is the first in a series of studies on borrower-led MDBs. 

Upcoming papers will examine in more detail the challenges and  opportunities faced by borrower-led MDBs, linking their governance  with their financial context and operational attributes.