Published on 12 March 2025

International financial institutions

Most developing countries need external capital and expertise to stimulate growth and development. Multilateral development banks help to fill the gap for such countries. Switzerland is a full member of these global and regional financial institutions.

A sign on a wall in a building proclaims: "A world free of poverty on a livable planet." — The World Bank Group’s vision: a world free of poverty on a livable planet. — © SDC

Development banks have the mandate to support countries in gaining access to financial resources and technical assistance. They offer developing countries financing for projects and programmes at close-to-market conditions as well as technical assistance. Their financing instruments include lending to governments and the private sector, grants and equity investments.

Switzerland is a member of the World Bank as well as of the African, Asian and Inter-American Development Banks. As a shareholder and donor country it plays a role in shaping their strategic and operational policy. Switzerland’s contributions help to promote inclusive and sustainable growth and to finance the needs of populations in the world’s poorest countries.

The WBG is one of the largest institutions providing funding and expertise in developing countries. It consists of five institutions that are committed to reducing poverty, increasing shared prosperity and promoting sustainable development. Switzerland is an active member in the World Bank’s governing bodies and participates in the Bank’s development projects. Switzerland joined the World Bank in 1992 and represents a constituency comprising eight countries from Europe and Central Asia (Azerbaijan, Kazakhstan, Kyrgyz Republic, Poland, Serbia, Tajikistan, Turkmenistan and Uzbekistan) in the 25-member executive board of the World Bank Group.
The WBG consists of the following institutions:
- International Bank for Reconstruction and Development (IBRD): The IBRD focuses on middle-income countries, where it supports sustainable development and poverty reduction. The IBRD provides a combination of soft loans, knowledge and technical assistance. Its capital stock is augmented from time-to-time through increases in paid-in capital.
- International Development Association (IDA): The IDA is the concessional finance window of the World Bank, lending to the world’s poorest countries for various development projects at zero or very low interest charges. Within the World Bank, the IDA is the institution that focuses on the 75 poorest countries in the world. It supports projects in health and education, infrastructure and agriculture as well as economic and institutional development. The IDA’s resources are replenished by donor countries, usually every three years. Deliberations on the IDA’s strategic and operational policy take place during the negotiations on replenishment.
- International Finance Corporation (IFC): The IFC is the largest development institution focused exclusively on the private sector in emerging markets. The IFC supports entrepreneurs in developing countries through loans, equity investments and commodity finance. The IFC also advocates for a reliable and favourable policy environment for private investment.
- Multilateral Investment Guarantee Agency (MIGA): MIGA guarantees protect investments against non-commercial risks and can help investors obtain access to funding sources with better financial terms and conditions.
- International Centre for Settlement of Investment Disputes (ICSID): The ICSID is an international investment dispute settlement body. Countries have agreed on ICSID as a forum for investor-state dispute settlement in most international investment treaties and investment laws and contracts.
The AfDB is a leading multilateral development finance institution with a focus on the African continent and an important multilateral partner for Switzerland. Its mission is to promote economic growth and reduce poverty.
The two main entities in the AfDB Group are:
- The AfDB (founded in 1964), which offers advisory services and long-term finance to eligible middle-income countries and the private sector.
- The African Development Fund (founded in 1972), which provides long-term finance and advisory services to 38 low-income fragile states in Africa.
The ADB aims to eradicate extreme poverty and promote inclusive, sustainable and resilient growth in Asia and the Pacific.
The ADB consists of two main entities:
- The ADB (founded in 1966), which lends to governments and the private sector from its ordinary capital resources.
- The Asian Development Fund (founded in 1973), which provides grants and assistance to the poorest lower-income member countries.
The AIIB founded in 2015 at the initiative of the People’s Republic of China, is the youngest multilateral development bank. The bank’s activities focus on infrastructure projects in Asia in the energy, transport, urban development and water sectors, with an emphasis on green and sustainable investments. The bank provides loans, guarantees and equity investments. On the bank’s board of directors, Switzerland forms a voting constituency with Denmark, Iceland, Norway, Poland, Romania, Sweden, Serbia, Hungary and the United Kingdom.
The IDB is the largest multilateral source of finance for countries in Latin America and the Caribbean. Its objectives are to reduce poverty and social inequality and promote sustainable economic growth in the region.
The IDB Group includes:
- IDB, founded in 1959, which provides loans and technical assistance to governments;
- IDB Invest, founded in 1984, which provides loans to the private sector, guarantees, equity investments and technical assistance;
- IDB Lab founded in 1993, which provides venture capital to innovation projects.