Banks and financial institutions are vital for economic development

Finnfund provides finance for banks and financial institutions, especially in Africa and Latin America. The form of finance, such as a long-term loans or mezzanine financing, generally supports the institutions in meeting capital adequacy requirements, and improves their ability to grant loans to companies, households, etc. Banks financed by Finnfund usually have a clear focus on SMEs, small infrastructure projects, family companies, households or similar areas.

Finance granted to banks and financial institutions has a great multiplier effect on national economic development. The loans and the conditions attached also promote operational transparency and risk management in environmental and social affairs, among others. Local banks, especially in many African countries, are often too small to be profitable. Risk-tolerant finance from a development finance institution like Finnfund supports their growth in local and regional markets.