Loans come with an obligation to repay interest and principal.
If loan principal and interest are not repaid on schedule the credit worthiness of the borrower can be downgraded, making access to new capital difficult. Lending Trends Lending by multilateral development banks to climate change relevant sectors has declined during the past decade. After a steep rise in the 1990s, the financial crisis in East and Southeast Asia brought about a sharp decrease in private external capital flows to most developing countries in that region. Lending from multilateral development banks, however, did not change significantly during the same period. The trend, however, is more encouraging.