The founding of financial institutions in the developing countries, whose target groups are supposed to be poorer people and, in particular, income-generating micro, small-scale and medium sized enterprises, orginated in the industrialised nations. Soon after Western "development policy" began in the 1950s and 1960s the donors noted that investment in infrastructure was insufficient to achieve growth. Reflecting on the experiences of Europe, state of mixed-enterprise development banks were founded in many developing countries with support of various donors. The banks were to promote industrialisation as a substitution for imports, as well as farming, housing construction and regional development. Their common feature was that they combined the characteristics of a bank and a public authority. On the one hand, they managed loan holdings and handled payment transactions, and one the other they "prompted" development by non-repayable grants. Since these functions each followed a very different logic, the banks were required to undertake a difficult tightrope walk.
