The New Development Bank: towards greater efficiency

The New Development Bank: towards greater efficiency

Multilateral development banks (MDBs) increasingly struggle to respond effectively to the needs of middle-income countries (MICs). This has influenced not only their potential development impact but also their own financial stability. Part of the challenge has been internal business processes that deter greater borrowing by countries, especially in the presence of other financiers with less strenuous requirements. These processes include lengthy loan approval processes, limited use of in-country management systems and sensitivities around environmental and social safeguards. There is also a need for greater responsiveness and an emphasis on the importance of knowledge services.

This policy briefing (drawing on a more in-depth discussion paper) highlights some of these challenges and offers some alternative solutions. The New Development Bank (NDB), as a new entrant to the development finance milieu, will do well to draw on the experiences of existing MDBs to improve its offerings to countries.


  • by simplifying and decentralising loan approval processes or creating simplified and standardised procedures for loans, MDBs can be more efficient, making their services more attractive to borrowing countries
  • the NDB cannot divorce its operations from global discourse and pressures (from countries and non-state actors alike) related to environmental and social safeguards and should ensure adherence to international best practices
  • there is a clear preference for the use of country systems from borrowing countries and thus the UCS approach should be prioritised. Where countries lack capacity, the NDB should provide the additional capacity-building support
  • technical knowledge sharing should be a priority focus area of the NDB, as such services are greatly valued by borrowers, more so than ‘soft’ knowledge services such as reports or databanks
  • to ensure greater inclusive development, the NDB needs to ensure gender considerations are included throughout the lifecycle of infrastructure financing and in institutional arrangements
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