- Use of long-term finance—frequently defined as all financing for a time frame exceeding one year—is more limited in developing countries, particularly among smaller firms and poorer individuals.
- Where it exists, the bulk of long-term finance is provided by banks; use of equity, including private equity, is limited for firms of all sizes.
- The global financial crisis of 2008 has also led to a reduction in leverage and use of long-term debt for developing country firms.
- Market failures and policy distortions have a disproportionate effect on long-term finance, suggesting an important role for policies that address these failures and distortions.
- Sustainably extending the maturity structure of finance is a key policy challenge since long-term finance can be an important contributor to economic growth and shared prosperity.
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