Abstract
This paper examines the significance of bank financing, emphasizing on the role of development banks. The results indicate that in spite of the emphasis on alternative methods, bank financing is still the most common way of financing with banks accounting for more than 50 percent of all credits in 10 advanced economies of the world. Meanwhile, Development banks are playing a major role in furthering development goals, taking on a counter cyclical role in critical situations thanks to the support provided by governments
Based on our findings, development banks in Iran mostly refer to private banks and do not meet the standards of those running in other nations. In spite of a growth in its credit supply, Iran’s Bank of Industry and Mine which is specifically associated with mining and industry sector still cannot meet the financial needs of the sector and therefore should be supported by the government. Due to the importance of development goals, paving the way for the establishment of development banks is highly significant. Not only can this meet the specific needs of the industry, it also helps government reach its macroeconomic objectives. Hence, we suggest that government reconsider its policies regarding the allocation of financial resources by increasing the Bank of Industry and Mine capital and providing alternative financing methods such as bond (debt) market.
Key Words: Development Banks, Bank of Industry and Mine, debt market.

Executive summary
Studies reveal that in spite of a global shift to capital markets, banks are still playing a dominant role in financing the industries in developing and even developed economies. The significant effect of the banking system in this scenario is better highlighted through development banks. Before the 2008 financial crisis took place, development banks were mostly associated with financing development projects (providing financial resources and reducing transaction cost). However, they took on a different role widely known as “counter cyclical role” after the crisis particularly in Asia, Latin America, Africa and Europe. Hence, in times of stagnation where bank credit declines, Development banks become a valuable asset which can finance development projects (long term with low profit).
Given the macroeconomic impact of small and medium scale industries and their share of employment and economic growth, specialized banks have been established providing services to industries. Regardless of their difference in terms of size, property, financial resources and risk management, they all enjoy government support. While having a counter cyclical role in economy, development banks are involved in policy-making, macro-economic planning, giving advice on setting regulatory requirements for trade or employment contracts. Due to their nationwide importance, development banks in countries such as India or Japan provide services solely to small and medium scale industries.
Bank financing is very common in Iran and banks play a crucial role for the financing of businesses, with their share of credit supply rising from 74 percent in 1387 to 83 percent in 1392. Of the total credit supplied by the banking system, 30 percent is dedicated to mining and industry. Development banks in Iran mostly refer to private banks and do not have the characteristics of those defined in other nations. In spite of a growth in its credit supply, Iran’s Bank of Industry and Mine which is specifically associated with mining and industry sector still cannot meet the financial needs of the sector with its share of credit supply dropping from 13 percent in 1385 to 5.4 percent in 1393. Therefore, it should be supported by the government. Due to the importance of development goals, paving the way for the establishment of development banks is highly significant. Not only can this meet the specific needs of the industry, it also helps government reach its macroeconomic objectives. Hence, we suggest that government reconsider its policies regarding the allocation of financial resources by furthering cooperation with National Wealth Fund, increasing the Bank of Industry and Mine capital and also providing alternative financing methods such as bond (debt) market.