(a) What is economic development? (b) Outline any five features of a Development Bank.

(a) Economic development is the process of sustained increase in a country's real output (real national income and per-capita income) accompanied by improvements in the structure of the economy and in the welfare of the people, such as better education, health, employment, income distribution and standard of living. It is growth plus qualitative and structural change, not merely a rise in output.

(b) Five features of a development bank:

• Provision of long- and medium-term finance: It lends capital for long periods to industry, agriculture and commerce, unlike commercial banks which lend mainly short-term.
• Development-oriented lending: It finances priority projects that promote economic development rather than aiming purely at profit.
• Provision of technical and managerial advice: It gives advisory and feasibility services to the projects it finances.
• Equity participation: It may buy shares in the enterprises it assists, sharing in ownership and risk.
• It does not accept ordinary demand deposits from the public and does not run current accounts like commercial banks; it is capitalised mainly by government and other institutions. (It also helps mobilise domestic and foreign capital for development.)