What is a development bank?

Question

What is a development bank?

Answer 1

There are different kinds of development banks.

A community development bank is created to serve low to mid-income customers in areas that are normally shunned by the commercial banks. They may provide long term low-interest loans to aid in financing low cost housing, small businesses, and things of that nature. They can be chartered by either a state banking authority or the federal government.

A multilateral development bank is usually formed by both developed (the lenders) and developing nations (the borrowers). It's primary purpose is to provide long term loans at market rates, or longer term loans at rates below the prevailing market, or they may offer grants for the development of housing and infrastructure. The most prominent example would be The World Bank. Others include The African Development Bank and The Asia Development Bank.