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Financial Sector

Breaking down the barriers to mobilizing sustainable investment

Ceyla Pazarbasioglu's picture
Closing Plenary of the Investor Forum. © World Bank

“Private capital is often an important source of sustainable finance. Public finance alone may not be sufficient to meet the demands for sustainable finance as the global economy continues to grow and poses increasing burdens on our resources and ecosystems. Mobilizing private investment in areas such as sustainable infrastructure, sustainable technologies and business model innovations, among others, can deliver substantive environmental, social, and economic benefits.”

This summary from the G20’s Sustainable Finance Synthesis Report was at the heart of the discussion at the Investor Forum, which was held on the sidelines of the G20 Summit in Buenos Aires in November. The event – hosted by the World Bank and the Government of Argentina – brought together investors holding over $20 trillion of assets as well as stakeholders and representatives from G20 governments. The goal was to identify steps for boosting long-term, sustainable, private-sector investments that tackle development challenges and promote economic growth in parts of the world that need it most.

The ongoing impact of ‘nudging’ people to pay their taxes

Oscar Calvo-González's picture
Also available in: Español
© Maria Fleischmann/World Bank
© Maria Fleischmann/World Bank

Sustainability is the holy grail of development. There are many interventions that yield positive results in the short term but somehow fail to be sustained over time. This is why the experience in Guatemala that we are about to describe is worth paying attention to. In short, it shows that behavioral insights can lead to lasting change.

It all began in 2012 in the United Kingdom, with simple changes in the reminder letters sent to taxpayers that were late in their income tax payment. The changes were very successful, inducing payments of 4.9 million pounds (around $6.5 million) in a sample of almost 120,000 delinquent taxpayers, which would not have been raised without the intervention. The then-nascent institution called the "Behavioral Insights Team" (BIT) became known around the world with this effective and very low-cost intervention that was based on modifying the messages of the letters sent to delinquent taxpayers. The message that was most effective said: "Nine out of ten people in the U.K. pay their taxes on time. You are currently in the very small minority of people who have not paid us yet." Behavioral science experts have been able to show that telling people what most people do, especially when it comes to positive behavior, is a good technique to change behavior.

Green Bonds: From evolution to revolution

Heike Reichelt's picture
Also available in: Français | 日本語 | العربية | Español
© ThickStock.com/Getty Images
© ThickStock.com/Getty Images

The first green bond issued by the World Bank 10 years ago created the blueprint for today’s US$500+ billion labeled bond market. This blog post looks at how green bonds changed investor and issuer behavior and how the same model can be applied to help achieve the Sustainable Development Goals.


The capital markets have evolved over the last 10 years from a market where investors knew - and cared - little about what their investments were supporting, to one where purpose matters more than ever. There’s a revolution in the bond markets that was sparked by green bonds.

The green bond market has grown from a market dominated by issuers like the World Bank, an international organization owned by 189 countries with the sole purpose of eradicating extreme poverty and boosting shared prosperity, to one that includes a broad range of issuers - from private companies and banks, to utilities and governments. The simple concept behind green bonds has expanded to other labeled bonds, including social bonds and blue bonds. 

How Islamic finance can boost infrastructure development

Joaquim Levy's picture
Also available in: العربية | Français
Queen Alia International Airport, Jordan. © littlesam/Shutterstock
Queen Alia International Airport, Jordan. © littlesam/Shutterstock

In many developing countries, there are glaring gaps in the quantity of infrastructure per capita. For example, power generation capacity per person in these countries is only one-fifth that of advanced economies. We know that expanding infrastructure investment in economic and social services is an effective way both to promote inclusive growth and to foster local resilience to global shocks. In particular, investment in quality, sustainable infrastructure helps finance the transition towards a low-carbon, more environmentally friendly economic model. This happens notably in the renewable energy and low-emission transport sectors. Given the scale of resources needed to address the infrastructure investment gap, mobilizing the private sector for this goal has become imperative, especially in countries where financial transactions in banking and capital markets follow Islamic law (or shari’ah) principles.
 
The conventions of Islamic finance are particularly suitable for infrastructure development. They define an asset-oriented system of ethical financial intermediation built on the principles of risk-sharing in lawful activities (halal) rather than rent-seeking gains. This “entrepreneurial” approach by investors requires a high degree of transparency and creates incentives to monitor projects more carefully, which, in turn, strengthen the efficiency in building and operating infrastructure.

Everything you need to know to follow the 2018 Annual Meetings

Bassam Sebti's picture
Also available in: Français | Español | العربية | 中文


The IMF/World Bank Group Annual Meetings is an event you won't want to miss. Join us for a week of seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world's financial system. This year's events will take place in Nusa Dua, Bali, Indonesia, October 8-14, 2018.
 
Find out why the World Bank, countries, and partners are coming together to try to close the massive human capital gap in the world today. Catch the launch of the new Human Capital Index on October 11, 2018, and spread the message that it’s critical to #InvestinPeople.
 
The World Bank Group, the International Monetary Fund, and the Government of Indonesia are also co-sponsoring a first-ever technology fair to bring innovation to the heart of the Annual Meetings.
 
This three-day “showcase” will feature 28+ innovators – companies from around the world – who will demonstrate the powerful role that technology can play in spurring development, strengthening financial development and inclusion, and improving health and education outcomes. The 2018 Innovation Showcase will run from October 11-13 in the Bali International Convention Center.
 
So, start planning your #WBGMeetings experience. Connect, engage and watch to take full advantage of everything the Meetings has to offer. We've got you covered on Facebook, Twitter and Instagram!

Women rise to unlock opportunities for SDG implementation

Mahmoud Mohieldin's picture
Also available in: Español | العربية | Français
Lucy Odiwa, an entrepreneur in Tanzania whose firm, promotes safer and more sustainable methods for handling menstrual health hygiene management (MHM) won the first place in the SDGs&Her competition. © Womenchoice Industries

Visit any community and you will see women breathing life into every part of the economy and society, be it in agriculture, healthcare, marketing, sales, manufacturing, or invention. Through their presence in every walk of life, women make significant contributions to the 2030 Agenda, including its 17 Sustainable Development Goals (SDGs), the most ambitious set of goals that the international community has ever set for itself
 
However, despite representing 50% of the population, women remain over-represented among the world’s poorest and most vulnerable groups and under-represented as leaders and drivers of change. The lack of recognition of women’s contributions, particularly through their businesses and economic activities, has severely limited their access to finance, new markets and knowledge – necessary for economic growth and poverty reduction.

Helping East Africa attract investment in priority sectors

Axel van Trotsenburg's picture
Also available in: 中文 | Français | العربية | Español
© Sarah Farahat/World Bank
© Sarah Farhat/World Bank

This month’s Development Finance Forum is bringing together public and private sector leaders to talk about how we can drive more private finance in three sectors that are key to development in East Africa: agribusiness, housing finance and tourism. The region’s leaders see these as critical to sustained growth, job creation and long-term economic transformation for their countries.

The World Bank Group sponsors the Forum annually to connect key stakeholders who, by working together, can change the investment landscape in the least developed countries. We aim to pinpoint what each major player can contribute, as well as explore promising ideas, initiatives and partnerships that need an extra impetus to succeed. It’s an exciting time to be an investment partner in the region with its extremely dynamic economies and a lot of innovation taking place.

Stories of success: We-Fi’s Women Entrepreneurs Reporting Award

Priya Basu's picture
Also available in: العربية | Español | Français
 
Amanda Burrell, Documentary Filmmaker. © World Bank
Amanda Burrell, documentary filmmaker, receiving the award. © 2018 One World Media Awards


Jordan’s Water Wise Women initiative puts women at the heart of efforts to combat severe challenges in water supply and sanitation by training more than 300 local women to be plumbers.  The program, led by the German government, led to the formation of a women’s cooperative that bids for commercial contracts in schools, mosques, and government agencies.
 
A short documentary film produced for Al Jazeera showcases how these women are not only challenging stereotypes by thriving in the male-dominated profession of plumbing, but also implementing a range of water management techniques for their communities.
 
Each group of Water Wise Women is trained to eradicate water leakage and improve hygiene.  Trained women receive toolboxes and funding for outreach to disseminate information within their community and reach at least 20-25 other women.
 
The film was just awarded the Women Entrepreneurs Journalism Award, sponsored by the Women Entrepreneurs Finance Initiative (We-Fi), as part of the 2018 One World Media Awards. This is the first time that the One World Media Awards have included reporting on women’s entrepreneurship as a category. The award covers broadcast, digital, film or print journalism that explores women’s entrepreneurship in developing countries. Reporting can showcase stories of successful female entrepreneurs, the challenges women face in trying to start or grow their businesses, and/or the critical role that women entrepreneurs play in economic development by boosting growth and creating jobs. 

Achieving Financial Inclusion: Fintech, account usage, and innovation

H.M. Queen Máxima's picture
Also available in: العربية | Français | 中文 | Español
Soahanginirina Razafindrahanta, a teller at a Baobab bank outlet counting out money for a customer in Antananarivo, Madagascar. © Nyani Quarmyne/International Finance Corporation
A teller at a Baobab bank outlet counting out money for a customer in Antananarivo, Madagascar. ©  Nyani Quarmyne/IFC

For almost a decade, the global community and national governments have made concerted efforts to expand financial inclusion—creating a financial system that works for all and opens the doors to greater stability and equitable progress.
 
This has been a demanding challenge. At the start of our engagement on financial access back in 2013, we said that having a real target with an end date would keep us focused and give us a benchmark against which we could measure progress.

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