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DFI Database 2022 Q2 Update: Successfully Discern Dual-module Public Financial Institutions

2022-07-29

The second quarter of 2022 update of the Public Development Banks (PDBs) and Development Financing Institutions (DFIs) database successfully discerns the dual-module public financial institutions (DMPFIs) in distinction with PDBs and DFIs. This brings the total number of PDBs and DFIs to 522 institutions, among which national and subnational PDBs and DFIs come from 154 economies worldwide. The total assets of PDBs and DFIs in our database have reached USD 23.21 trillion.

 

As an ongoing effort, INSE and AFD have worked together to continue to identify missing PDBs and DFIs and collect their basic profiles and financial indicators based on a set of five qualification criteria: 1) being a stand-alone entity;2) providing fund-reflow-seeking financial instruments as the main products and services; 3) funding sources going beyond periodic budgetary transfers; 4) having a proactive public policy-oriented mandate; 5) having government steering of corporate strategies. Accordingly, five newly identified PDBs and DFIs have been added to the database in the second quarter of 2022, namely, InfraCo Asia Development, InfraCo Africa Limited, Emerging Africa Infrastructure Fund, GuarantCo Limited, and Fund for Reconstruction and Development of the Republic of Uzbekistan.

 

As the highlight of the second quarter data update, we have systematically screened the existing list of PDBs and DFIs to discern DMPFIs.

 

DMPFIs are public financial institutions that engage in both development financing and commercial/investment banking, despite their explicit official mandate to promote development. On the liability side, DMPFIs may take deposits from households, just as commercial banks do. On the asset side, DMPFIs may provide personal credit card services, short-term working capital, or even venture into commercial and investment banking.

 

Previously, this group of DMPFIs was included as a special category of “universal banks” in the inaugural database released in May 2019, as long as they were standalone financial institutions where governments play a steering role to ensure that they explicitly pursue the development-oriented official mandate. Such hybrid public financial institutions are distinctive from typical non-retail-deposit-taking PDBs and DFIs. To better disentangle these hybrid institutions from typical PDBs and DFIs, we coin the term “dual module public financial institutions” to separate them from the main database. The term “universal banks” which has often been used to refer to the combination of commercial banking and investment banking. Hence, we provided an alternative working definition of “universal banks” (i.e., combining development banking and commercial banking) in the inaugural database report. To avoid confusions, we use the term DMPFI to refer to the hybrid of development financing and commercial financing.

 

To operationalize the screening criteria of DMPFIs, we have applied two exclusion criteria, including (1) a mission statement that emphasizes profit generation, shareholder value, etc., and (2) the liability structure where the institution has extensive branches to take household deposits in direct competition with private commercial banks. Meeting either of the said exclusion criteria would help us to distinguish DMPFIs from PDBs and DFIs. Yet, the exception is that if the institution takes the household deposits for the purpose of financial inclusion, i.e., opening bank accounts for disadvantaged populations, poor areas within a country, or remote countries, it would still qualify as a DFI as long as it meets all other qualification criteria.

 

To have a close look at the newly added and deleted institutions, please download the log files for the database updates on the Data Downloading page.

 

In addition, we have continued to collect the latest available data to supplement the total assets for the 2020 Fiscal Year. To ensure the comprehensiveness of visual website presentation, in case that the data of 2020 is not available, we have used figures from previous annual reports within five years and other reliable sources including official websites, and peer reviewed or published literature.

 

Note that the dataset on the data downloading web page only presents the exact figures of 2020 for the sake of accuracy. We encourage PDBs and DFIs to disclose their financial data to increase transparency, foster in-depth academic research on PDBs and DFIs, as well as inform policy making.

 

Forthcoming steps

 

In the next step, the PDB and DFI Global Database aims to launch a separate list of DMPFIs in the future update by systematically identifying this kind of hybrid public financial institutions worldwide.

 

In the upcoming third edition of the Finance in Common Summit co-convened by the European Investment Bank and African Development Bank on October 18-20, 2022, we will release 7 key indicators for all PDBs and DFIs for the fiscal years of 2018-2020, including total assets, equity, total liabilities, net income, profit before tax, net interest income and number of employees. We will also launch the flagship database report on public policy areas where PDBs and DFIs actually operate in practice based on the first-hand data collection.

 

This year, the theme of the Finance in Common Summit is “Green and Just transition for a sustainable recovery”. To register for the event, please click  here.

 

To learn more, please visit our data visualization website and download the full dataset for free!

 

We welcome feedback from academia, policymakers, practitioners from PDBs and DFIs, and other stakeholders to provide constructive suggestions and fill gaps in the database. Please contact us at nsedfi@nsd.pku.edu.cn.