The dominant supply-side hypothesis assumes that financial development can promote economic growth. Growth therefore depends positively on investment. Investment is supported by borrowing, which in turn is made possible by deposits with banks and non-bank financial institutions. Development banks are one such financial institution whose mandate is to channel funds from savers to borrowers to support investments. These institutions, however, face many challenges brought about by the effects of financial liberalization, globalization and increased opportunities created by technology. Therefore, the Development Bank of Jamaica must continually adapt, maintain and revise its procedures so that it can respond positively to the challenges it faces. According to Levine (1997), the financial system allows for a more efficient exchange of money. goods and services, mobilizes the savings of individuals and businesses, allows more efficient allocation of resources and more effective monitoring of business management through capital markets and allows the pooling of risks. Financial intermediaries such as building societies, insurance companies, banks, pension funds, credit unions and the stock market are in high demand. Therefore, without them, investments may not take place and technological progress may be delayed, leading to a slowdown in the growth process. There is obviously some relationship between the development of a financial sector and economic growth once the functions of the financial sector are carried out efficiently and effectively. Despite the support, incentives and initiatives implemented for the Development Bank of Jamaica, the fact remains that the bank is still operating efficiently...... middle of paper ...... private banks. Therefore, well-connected manufacturers may have a superior ability to attract loans or capital from development banks, even in cases where they could obtain capital elsewhere (Ades and Di Tella, 1997; Haber, 2002; Krueger, 1990). However, La Porta et al. (2002) show that public ownership of banks is associated with lower subsequent economic growth and argue that politicians use public banks to promote their own political goals. Good governance plays an important role in preventing government interference in credit decisions because it differentiates the rights and responsibilities of different DB stakeholders. In order to achieve efficiency, the bank must be organized like a business, with shareholders, a board of directors and management. The responsibility of each of these groups must be clearly stated.