Stories

About

Developing countries include some of the world’s fastest growing economies and countries whose growth in real terms is limited - outpaced by increase in population. The balance of these economies and the growing sectors is unevenly spread across their territories and inequitably distributed through their societies, often producing relative disparities and disequilibria. These structural problems present serious challenges for equitable and sustainable development.

This is the challenge of local economic development that becomes more important as developing countries experience growth and capital accumulation but lack the means to reinvest that capital to promote sustainable, equitable and inclusive development in localities that require quality services, infrastructure and capital investment.

How Are We Helping?

Local Finance Initiative is a UNCDF investment mechanism that enables developing countries to unlock the flow of domestic capital to invest in sustainable development at the municipal level. The LFI mechanism is a combination of: Catalytic capital + Technical Assistance + Risk Mitigation Strategies which has proven that transformative local development investments can tap into additional capital from both the public sector and domestic capital markets. The facilitation by LFI, is a way of advancing public funding to attract the private sector who are traditionally reluctant to invest in risky investment projects.

The LFI Programme employs these proven financing techniques to mobilize private financing for relatively small and medium size investments that are critical for supporting local economic development hand-in-hand with capacity building mechanisms to empower both government officials and the private sector to scale up local development finance, while providing inputs that improve the business-enabling environment.

The LFI work with local governments and SMEs has resulted in transforming idle rural rand urban resources, diversification of economies, provided clean and affordable energy, supported women economic empowerment and enhancement of local governments abilities to create new, own sources of revenue in order to provide quality service to its citizens.

What We Will Do Next?

The LFI as ‘body of knowledge’ and part of the broader maturity model of UNCDF’s innovation and learning that is now ready for scale up and replication in many developing countries. The LFI lessons have been consolidated and repackaged to help developing countries to embed these innovations in their national institutions, policies, capacities, and transformational systems.

What We Do

Local Finance Initiative is a UNCDF investment mechanism that enables developing countries to unlock the flow of domestic capital to invest in sustainable development at the municipal level.

The LFI mechanism is a combination of: Catalytic capital + Technical Assistance + Risk Mitigation Strategies which has proven that transformative local development investments can tap into additional capital from both the public sector and domestic capital markets. The facilitation by LFI, is a way of advancing public funding to attract the private sector who are traditionally reluctant to invest in risky investment projects.