The National Development Bank of Palau (NDBP or the Bank) is a small development finance organization operating in the Republic of Palau, where underlying economic strength presently relies heavily on foreign aid. Such aid monies primarily flow from the United States under a Compact of Free Association, with significant contributions also from Japan and Taiwan.

The economy of the country is fragile in that it relies mainly on offshore sourced tourism for current account inflows, and import costs continues to heavily outweigh tourism and other foreign exchange receipts. Limited land and population size are made up for by close proximity to Asia, natural beauty, and high biodiversity.

There is little core infrastructural development to cater for import substitution and self-sufficiency, and when the payment arrangements from the United States under the abovementioned Compact cease in 2009 it appears funding difficulties will arise for the Republic. Indications are that the United States will further assist Palau with additional funding going forward based on current discussions. A $150 million trust fund is sufficient to fund operations going forward for several years.