Taking local country contexts and conditions into account is essential to ensuring that investments are made effectively. Sri Lanka is an example of when International Finance Corporation (IFC) investments were made without addressing key constraints first. There was a lack of foreclosure legislation, which ended up negatively impacting the IFC investment.
IFC invested in a Housing Finance Company (HFC), despite this critical mortgage legislation not yet being in place. HFCs are often created as non-financial banking institutions (NFBIs) in order to become major providers of housing finance and to demonstrate the commercial viability of the mortgage market. Without foreclosure legislation in place, the HFC was not able to penetrate the mortgage market at a large scale, as was the intention.
Source:
World Bank Group. (2016) World Bank Group Support to Housing Finance. International Bank for Reconstruction and Development / The World Bank.
Link: https://ieg.worldbankgroup.org/evaluations/world-bank-group-support-housing-finance