Low and middle-income countries face a widening gap between the finance needed to support development and tackle climate change, and the funding available. Public capital alone will not meet the scale of investment required. Mobilising private capital is essential – helping us deliver greater development impact than we ever could alone.
At British International Investment, this sits at the heart of our 2026–31 strategy. We are increasing our ambition to mobilise private capital at scale: using our capital and partnerships to crowd in others, and to help make investment in these markets the norm rather than the exception. A critical part of that effort is domestic capital mobilisation.
Across many of the markets where we invest, local institutional investors – pension funds, insurance companies and others – are growing. They represent a potentially powerful source of long-term capital for development. Yet too often, this capital remains underutilised, in part because local capital markets are not sufficiently developed to channel it effectively.
This is why we commissioned this independent think piece with Itad. It reflects a growing recognition that mobilising domestic capital and developing local capital markets are closely linked – and that progress on one depends on the other.
We have already seen what is possible in practice. In Zambia, we have worked with the National Pension Scheme Authority as part of the Growth Investment Partnership, helping to mobilise domestic institutional capital into productive sectors. In West Africa, we co-anchored NSIA Banque Benin’s landmark securitisation, supporting small businesses while developing local
capital market instruments. In Tanzania, our role in anchoring NMB Bank’s sustainability bond helped to attract a broad base of local investors.
Individually, these transactions demonstrate what can be achieved. But they also point to a broader shift we are making: moving beyond single transactions towards a more deliberate focus on market development – using our interventions to help shape stronger, deeper local capital markets over time.
This report highlights the tools available to development finance institutions and how they can be used with greater intentionality to support both mobilisation and capital market development.
This is long-term work. But the prize is significant: financial systems that can continue to mobilise capital long after development finance institutions have stepped back.
We hope this think piece contributes to that effort, and to a wider conversation on how we can work together to unlock the full potential of domestic capital.
