Asset Securitisation in Development Finance Institutions

Abstract

Development Finance Institutions (DFIs) are limited in what they can do by the quantum of funding they have available; this thesis will look into a possible incremental method of funding, where there would be no reason to abandon existing funding methods, incremental funding will allow the DFI to do more within its existing balance sheet and capital base. Asset securitisation will leveraged DFIs recourses to support more projects, in which supporting the development of securitisation transactions may represent more benefit to a target country than the simple provision of soft loans. A DFI may sponsor and/or participate in early capital market issues (including securitisation) to develop a target country’s capital markets and thereby increase the amount of locally available funding to target institutions. DFIs may also consider the securitisation of some or its own development loan portfolio.