DFI's to help stimulate region amidst global crisis

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Development banks and financial institutions in the Asia-Pacific region vowed to help stimulate their economies by coming up with strategic and creative responses and solutions to the deepening global economic crisis, as well as pursue sustainable investments.

The regional cooperation agreement is contained in the “Muscat Declaration” which member-institutions of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) forged at the 32nd ADFIAP Annual Meetings in Muscat, Oman on April 29, 2009. ADFIAP serves as the focal point of 100 development banks and financial institutions engaged in the financing of sustainable development in 40 countries and territories in the Asia-Pacific region.

The “Muscat Declaration” recognizes “the pivotal role of development finance institutions (DFIs) as promoters of economic growth, especially as the current global crisis deepens and widens its scope.” It further states that “ADFIAP and its members will continue to come up with strategic responses and solutions that could help stimulate economies and hasten the pace of economic recovery in the Asia Pacific region, as well as explore and seize opportunities that will arise from the crisis.”

“By the very nature of their mandate, DFIs are in a better position to help their governments carry out programs under economic stimulus packages and other solutions to mitigate the adverse effects of the crisis,” said Octavio B. Peralta, ADFIAP Secretary General.

An example is the Small Industries Development Bank of India (SIDBI), a long-time ADFIAP member-institution, which has notched up record loan disbursements to help India’s 30 million micro, small and medium enterprises cope with the global crisis.

“For the first time in history, our Central Bank extended a (credit) line to all our development banks at low rates to relend to mSMEs,” said Rajender Mohan Malla, Chairman and Managing Director of SIDBI, which also created an asset reconstruction company to spur investments in the distressed assets market.

Apart from mSMEs, ADFIAP’s member-DFIs also vowed to pursue sustainable investments in agriculture, housing and infrastructure, water and sanitation, health, education, environment and climate change, appropriate technology, trade logistics, and others. They also committed to strengthen their operational efficiency and adherence to good corporate governance principles.

ADFIAP also unveiled a five-year strategic plan that aims to build a stronger and closer community of DFIs and launched the “iamadfiap” campaign to support this strategic direction. Consistent with its mandate as a focal point in the region, the Association will also intensify the sharing of innovative solutions and document, disseminate and share these issues with its members and other stakeholders.

ADFIAP also plans to position its Asia Pacific Institute of Development Finance as the “knowledge hub on development finance,” develop consulting and advisory services through the ADFIAP Consulting business unit, and reach out to other stakeholders through its ADFIAP Responsible Citizenship center. These initiatives are aimed to support the growing needs of its diverse membership and expanding international partnerships.

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