Role of finance in sustainable development

Updated: Dec 2, 2021

According to the World Bank and the International Monetary Fund, achieving the 17

Sustainable Development Goals (SDGs) will necessitate an increase in development money. The

paper Scaling Finance for the Sustainable Development Goals emphasized the importance of

accelerating financial innovation to achieve the SDGs.

Financing is required to fulfil the SDGs. According to an estimate conducted by the

International Monetary Fund [IMF], developing nations have an average yearly financing deficit

of $2.6 trillion for investments in health, education, roads, energy, and water as well as

animation. For low-income developing nations, this could imply additional annual spending of

up to 15% of their GDP. The vast and unmet needs of developing nations may lead to the

conclusion that achieving the SDGs will necessitate a funding increase from billions to trillions

of dollars.

The International Monetary Fund (IMF) and multilateral development banks (MDBs) are

committed partners in countries' efforts to achieve the SDGs. They provide creative funding

solutions that address individual requirements, as well as promoting high standards in areas such

as environmental sustainability, social inclusion, and good governance. They have a substantial

impact on sustainable development through the money they provide, both directly and by helping

to stimulate more public and private resources. Several MDBs provide low-interest loans and

grants to poor nations to help them achieve the SDGs. They want to operate together as a system,

learning from one another's experiences and collaborating to achieve shared development goals.

By Growthway's Intern KAILASH MULCHANDANI IIM, Kashipur

Disclaimer: Growthway owns an exclusive rights to all the research displayed on it's website

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