Private Bank Lending to Developing Countries

Abstract

The general pattern of bank lending to developing countries over the last twenty years or so is fairly well known. From a situation in the 1960s in which the banks provided only a very small proportion — much less than 10 per cent — of net financial flows to developing countries, the 1970s and early 1980s saw a dramatic increase in bank lending, as well as a change in its nature away from project, traderelated or specific purpose financing towards balance of payments or general purpose financing. However, beyond the early 1980s the banks became much more reluctant to lend and often had to be coerced into doing so by monetary authorities and by the International Monetary Fund (IMF).