Financial sector development - Sida

1. BACKGROUND
1.1 Mandate and terms of reference
As a follow up to the merger in 1995 of five Swedish development cooperation agencies,
Sida was mandated by the Swedish government to review its policy in relation to the
mobilisation of financial resources in developing countries. The Review would include
recommendations regarding the promotion of domestic resource mobilisation as well as
foreign private capital flows.
The Sida Management Committee agreed, at a meeting on 17 September 1996, on the
following terms of reference for the Review:
a) The Review should focus on the development of countries in Eastern and Southern
Africa.
b) The Review should take into consideration the findings and recommendations of two
previous studies on related issues; Sida’s aid reviews with regard to Concessionary Credits
(”Kreditutredningen”) and Private Sector Development (”Näringslivsöversynen”).
c) The Review should describe and analyse the financial sector assistance which has been
provided by SIDA BITS, SAREC and SwedeCorp prior to mid-1995 and by ”new Sida”
thereafter.
c) The Review should analyse the mobilisation of financial resources in a few countries in
Sub-Saharan Africa.
d) The Review should discuss the factors that are impeding an increased mobilisation of
financial resources (domestic resources and foreign private flows) and analyse which kind
of technical assistance projects may be used to overcome these obstacles.
e) The Review should discuss the role of financial assistance (loans, guarantees and
provision of equity capital) in the promotion of efficient and sustainable financial institutions
in developing countries.
f) The Review should discuss the role of Swedish institutions in financial sector
development.
g) The Review should discuss the possibility to achieve synergy effects in Sida’s financial
sector development projects through: 1) enhanced cooperation with foreign development
cooperation partners; and 2) improved coordination within Sida.
h) The Review should present a policy for financial sector development. It should also
elaborate on organisational aspects and the staffing required for implementing the policy.
10