Economics · Financial Institutions
For funding long-gestation green energy projects that require massive capital investment and have repayment periods exceeding 20 years, which specialized institution is designed for long-term project finance, equity support, and technical assistance, and how does it mobilize its resources differently from commercial banks?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A Non-Banking Financial Company (NBFC), mandated to provide consumer loans and vehicle finance; it mobilizes resources primarily through bank borrowings and public fixed deposits.
- 2An Asset Reconstruction Company (ARC), mandated to acquire and manage Non-Performing Assets (NPAs); it mobilizes resources through the issuance of Security Receipts (SRs).
- 3A Development Financial Institution (DFI like NaBFID), mandated to provide long-term project finance; it mobilizes resources mainly through long-term bonds and government grants.✓
- 4A Small Finance Bank (SFB), mandated to focus on providing small loans to the MSME sector; it mobilizes resources primarily through retail deposits.
Correct answer
A Development Financial Institution (DFI like NaBFID), mandated to provide long-term project finance; it mobilizes resources mainly through long-term bonds and government grants.
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