The Role of the Development Banks in Financing and Promotion of Investment Projects of MSME

Abstract

Among the institutions whose role in the development of the less developed regions is well recognized but inadequately emphasized are the development banks. Playing multiple roles, these institutions have helped promote, nurture, support and monitor a range of activities, though their most important function has been as drivers of industrial development. All underdeveloped countries launching on national development strategies, often in the aftermath of decolonization, were keen on accelerating the pace of growth of productivity and per capita GDP. This was the obvious requirement for alleviating poverty and reducing the developmental gap that separated them from the developed countries. To realize this goal, they considered industrialization to be an important prerequisite. This stemmed from the perspective that modern economic growth was a process characterized by an increase in the share of employment in the non-agricultural sector, and within the latter by a change in the scale of productive units, the growth of factory production and a shift from personal enterprise to the impersonal organization of economic firms.