A Multilateral Development Bank (MDB) is a financial institution that is formed by multiple countries to provide financial and technical assistance to developing countries.

These banks work to promote economic and social development by funding various projects and initiatives, such as infrastructure development, poverty reduction, and environmental sustainability.

Key characteristics of multilateral development banks include:

• Membership: MDBs are typically owned and governed by their member countries. Member countries contribute capital to the bank, and their voting power is usually proportional to their financial contributions.

• Global Reach: MDBs operate on a global scale, providing financial assistance and expertise to countries in various regions. They work with both low-income and middle-income countries.

• Financial Resources: MDBs raise funds by borrowing from international capital markets and from their member countries. They use these resources to provide loans and grants to developing countries for development projects.

• Development Focus: The primary goal of MDBs is to promote sustainable economic development and reduce poverty in their member countries. They may focus on a range of sectors, including education, healthcare, infrastructure, and environmental sustainability.

• Technical Assistance: In addition to providing financial resources, MDBs often offer technical assistance and policy advice to help countries implement projects effectively and build capacity.

Examples of prominent multilateral development banks include:

• World Bank Group: Comprising five institutions, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), the World Bank Group is one of the largest and most well-known MDBs.

• International Monetary Fund (IMF): While not a traditional development bank, the IMF plays a significant role in providing financial stability and support to member countries facing balance of payments problems.

• Asian Development Bank (ADB): Focused on the Asia-Pacific region, the ADB provides financial and technical assistance to support a wide range of development initiatives.

• African Development Bank (AfDB): Dedicated to promoting economic and social development in African countries, the AfDB finances projects and provides policy advice.

• Inter-American Development Bank (IDB): Supporting development in Latin America and the Caribbean, the IDB finances projects and provides technical assistance to its member countries.

These institutions collaborate with governments, the private sector, and other stakeholders to address the diverse development challenges facing countries around the world.

Recently, the G20 Expert Group released a Report titled ‘Bigger, Bolder, Better’ Multilateral Development Banks (MDBs). This report focuses on reforms of MDBs on the theme of Bigger, Bolder, Better MDBs.

The G20 2023 declaration witnessed a much larger focus on the development of various financial institutions including the multilateral development banks.