Banking on Development : Private Banks and Aid Donors in Developing Countries

Over the past decade we have witnessed a double convergence. Aid donors have developed a growing interest in the private sector while private banks have set about creating corporate social responsibility programs, sustainable lending and microfinance programmes. As a consequence, the dialogue between private banks and aid donors has been intensifying, opening new avenues for collaboration. The aim of this paper is to map the potential synergies between private banks and aid donors. A survey of private bank lending towards developing countries is undertaken in order to identify the private banks most active in those economies and provide an analytical tool to help identify the scope for public and private partnerships. We find an international division of labour in bank lending: within the developing world, banks from OECD countries tend to focus their credit on specific regions and countries. This mapping of private bank lending also allows us to pinpoint concrete examples of best practices in private bank and financial actors/aid donors collaborations. We follow by discussing some of the more important cases in the field, and conclude with the potential implications for improved partnerships between private banks and donor organisations