Topic Videos

Financial Markets and Economic Development

Level:
A-Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Last updated 3 Mar 2020

In this short video we focus on some of the ways in which financial markets can impact on growth and development in lower- and middle-income countries.

Financial Markets and Economic Development

Importance of financial markets for economic development – some examples to include

  1. Having a trusted banking system to promote household saving
  2. Mobile payments systems to facilitate spending & business growth / cash flow
  3. Micro-finance schemes to encourage local entrepreneurship
  4. Insurance to protect farmers and other primary sector producers
  5. Foreign currency exchange to help enable firms to import materials and sell goods and services overseas
  6. Capital markets for developing governments & corporations to raise fresh debt and equity

Developing financial sectors – five examples from 2019

The Seychelles issued the world’s first sovereign blue bond, an instrument developed to finance sustainable marine and fisheries projects

Ivory Coast is developing an agricultural commodities exchange to be launched in 2020 including forward markets

Mauritius launched an e-bond trading system for government bonds

Ethiopia announced plans to launch a stock exchange by 2020

Angola expects its first ever initial public offering this year, following the privatisation of multiple state- owned enterprises.

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