South Africa has a number of DFIs (the largest are IDC and DBSA) but these are small in size relative to comparator countries, and cannot play a strong developmental role due to their funding models. For example, the IDC relies mainly on domestic capital markets and bank loans, which increase in cost if IDC takes on greater risk. In order for the DFIs to play a role that is sufficiently developmental to meet the massive challenges facing the South African economy, they must be scaled up, given a government guarantee and stable, low-cost source of funding.