30 Development Finance Institutions Approve Updated Methodologies for Measuring Private Finance Mobilization

Key Facts

Thirty member institutions of the multilateral development banks’ Mobilization Working Group approved updated methodologies for measuring private finance mobilization, according to a statement issued by the Association of European Development Finance Institutions on October 1, 2026. The methodologies address how to calculate the private finance institutions mobilize to support development, and expand guidance on the use of financial instruments including securitization and risk transfers. The revisions also cover multilateral development bank guarantees and originate-to-distribute models. The move establishes common rules for measuring these instruments’ contribution to attracting private finance. The measurement methodologies are being updated as institutions say capital mobilization remains below the required level.

The updated methodologies explain the expanded use of models that transfer loans or their risks to investors, alongside securitization and guarantees. Under the originate-to-distribute model, an institution can originate financing and then distribute it, enabling other entities to participate in funding it or bearing its risks. In synthetic risk transfers, a bank transfers all or part of the credit risk on a pool of assets to a counterparty while retaining ownership of the underlying assets, according to the Bank for International Settlements. The bank said capital management and credit risk are key drivers of the use of these transfers. When capital relief is achieved, banks can redeploy the released capital to support more lending, according to the Bank of England.

Figures cited by the parties involved reflect the scale of the need for private finance, although the capital mobilization recorded is still insufficient, according to HSBC. Capital mobilization volumes at multilateral development banks and development finance institutions rose 27% in 2024 to $278.5 billion, the bank said. That growth gives a tangible scale to the activity the methodologies seek to measure, while HSBC’s description of the amounts as insufficient points to an ongoing need for additional resources. HSBC official Himesh Patel said development institutions and their banking partners must build a “strong pipeline of projects capable of absorbing large flows of capital.” That view links the ability to mobilize finance to the availability of projects eligible to receive it, alongside the development of tools that measure the private sector’s contribution.

The regulatory backdrop to these instruments includes the size of the synthetic risk transfer market and the risk of credit moving outside the banking sector. The Basel Committee estimated that protected assets across active markets in Canada, the euro area, the United States and the United Kingdom amounted to about 750 billion euros, or 1.1% of total bank assets in those markets, in an estimate published on February 17, 2026. The committee warned that banks’ growing reliance on nonbank financial intermediaries calls for continued supervisory monitoring. The Bank of England said risk transfers by British banks move credit to nonbank investors, deepening the links between banks and nonbank financial institutions. HSBC said securitization can transfer the risks of existing portfolios to private-sector investors, freeing up balance-sheet capacity without the need for new shareholder capital.