A major operational challenge for industrial and agricultural enterprises in Nigeria is the maturity mismatch between commercial bank liabilities and long-term project gestation periods. Which of the following core characteristics uniquely enables specialized development banks to overcome this limitation compared to commercial banks?
- They rely primarily on government capital grants, multilateral agency funds, and long-term debentures to provide concessionary loans with moratorium periods, rather than depending on short-term customer deposits.Cevap
- BThey expand deposit money through the fractional reserve credit creation process to automatically lower short-term lending rates for commercial borrowers.
- CThey utilize monetary policy instruments such as Open Market Operations and reserve requirements to directly absorb short-term commercial credit risk.
- DThey acquire majority equity stakes in public enterprises under commercialization initiatives to convert short-term private debts into sovereign bonds.
Cevap
Specialized development banks rely primarily on government capital grants, multilateral agency funds, and long-term debentures to provide concessionary loans with moratorium periods, rather than depending on short-term customer deposits.
Specialized development banks are established by government to address market failures in long-term financing. Unlike commercial banks, which depend on short-term customer deposits and must maintain high liquidity, development banks derive their capital from government equity, long-term loans, and international funding bodies. This enables them to provide long-term loans with grace periods (moratoriums) and low interest rates to vital sectors like agriculture, housing, and manufacturing.
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Anahtar Kavram
Funding sources and long-term credit facilities of specialized development banks