U.S. International Development Finance Corporation (DFC) has been established through the Better Utilization of Investments Leading to Development (BUILD) Act of 2018. DFC offers equity financing, direct debt financing, credit guarantees, and political insurance. The goal was to identify countries, sectors, and segments of the market where DFC financing can add value and highlight potential DFC investment opportunities.
The Capstone team designed a country selection methodology to rank the readiness, identifying two countries to invest in: India as a lower-middle income country and Nepal as a low-income country. Using SDG goals as a proxy for underperforming sectors, the Capstone team identified the NAICS sectors that DFC should target aligned with DFC’s investment standards and authorization to conduct businesses. With the COVID-19 crisis making a devastating impact on the global economy and our lives, DFC and the Capstone team pivoted the goals of the project to analyze policy responses to the COVID-19, find the implications of the responses, and highlight potential DFC financing opportunities to mitigate economic hardships posed to the the selected countries (India & Nepal). To capture a complete picture of the impacts of the COVID-19 on India and Nepal, the Capstone team first analyzed the country risk profile, then compared and contrasted the states of the two economies pre and post COVID-19. Furthermore, the Capstone team emphasized Nepal’s dependence on India and elucidated how the economic contraction of India will feed into Nepali economy.