Multilateral Development Banks (MDBs):

1. 1. It is an international financial institution established by two or more countries for the purpose of encouraging economic development in poorer nations.
   2. It consists of member nations from both developed and developing countries.
   3. It intends to provide loans and grants to member nations to fund projects to support social and economic development in the areas of infrastructure, energy, education, and environmental sustainability in the poor countries.
   4. It evolved on the background of WW-II to rebuild war-ravaged nations and stabilize the global financial system.
   5. The MDBs are subject to international law.
   6. MDBs do not seek to maximize profits unlike the commercial banks as they prioritize development goals to improve the economic conditions of impoverished or developing nations.
   7. Two types of MDBs:
      1. The first type includes the largest and best-known institutions that makes loans and grants such as the World Bank and the Inter-American Development Bank (IDB).
      2. The second type includes MDBs formed by governments of low-income countries that can then borrow collectively via the MDB in order to secure more favourable rates.