Intermediating Aid

Can the development industry learn lessons from how
the finance sector intermediates huge amounts of
capital (with great efficiency)? The theory of
financial intermediation is applied to SIDA. It is
found that the transaction cost and information
asymmetry aspect of the theory does not sufficiently
explain SIDA s role as an intermediary. Various
factors justifying deviations from the theory were
identified, though the sustainability of these
factors in providing continued justification was an
issue. Two aspects are suggested for inclusion in
SIDA s policy, extracting greater value from know-
how and research and development.

Autorentext

Neesh is a graduate in law, finance and business. He is founder and manager of an investment fund targeting SME investments in early transition countries. Neesh also does advisory work focusing on corporate finance and securities markets development.

Klappentext

Can the development industry learn lessons from how the finance sector intermediates huge amounts of capital (with great efficiency)? The theory of financial intermediation is applied to SIDA. It is found that the transaction cost and information asymmetry aspect of the theory does not sufficiently explain SIDA's role as an intermediary. Various factors justifying deviations from the theory were identified, though the sustainability of these factors in providing continued justification was an issue. Two aspects are suggested for inclusion in SIDA's policy, extracting greater value from know-how and research and development.