World Bank Group has launched a $6 billion insurance-backed facility to expand lending to small and medium-sized enterprises (MSMEs) in emerging markets, aiming to support job creation and private sector growth.
The facility, led by International Finance Corporation (IFC), enables 19 global insurers to share credit risk on eligible IFC loans. This frees up capital, allowing IFC to increase financing to commercial banks and financial institutions that serve MSMEs—businesses that account for over 90% of firms and about 70% of employment worldwide.
The credit insurance policy will support up to $10 billion in new IFC lending, marking IFC’s largest single mobilization agreement and one of the largest credit insurance facilities arranged by a multilateral development institution.
“This facility demonstrates how we can partner with global insurers to expand access to finance in emerging markets,” said Makhtar Diop, IFC’s Managing Director. “It supports business growth while offering insurers diversified investment opportunities.”
The transaction is IFC’s fifth under its Managed Co-Lending Portfolio Program (MCPP) for credit insurers, bringing total mobilization under the program to $15.5 billion. Since its launch in 2017, MCPP has grown into a $25.5 billion platform supporting private capital flows to emerging markets, including IDA and fragile and conflict-affected countries.
Participating insurers include AIG, Allianz Trade, Arch Insurance International, AXA XL, AXIS Capital, Chubb, Convex Group, Everest, HDI Global, Liberty Mutual, Markel Group, MSIG, Munich Re, RenaissanceRe, SCOR, Sompo International, Swiss Re, The Hartford, and Tokio Marine.
By leveraging IFC’s due diligence and portfolio approach, insurers can efficiently deploy capital in emerging markets while helping expand access to finance for underserved businesses.
Source: World Bank Group
