The World Bank Group has partnered with a consortium of global insurance companies to launch a $6 billion insurance-backed financing facility aimed at expanding access to credit for small and medium-sized enterprises (SMEs) across emerging markets.
The initiative, implemented through the International Finance Corporation (IFC), is designed to support job creation and private sector growth by increasing lending capacity to businesses that often struggle to secure financing.
Under the arrangement, participating insurers will share credit risk on a portion of eligible loans issued by IFC. The risk-sharing structure frees up capital, enabling IFC to extend additional financing to commercial banks and financial institutions, which in turn lend to micro, small and medium-sized enterprises (MSMEs).
The $6 billion credit insurance policy, signed with a group of 19 global insurers, is expected to support up to $10 billion in new IFC lending. MSMEs account for more than 90 percent of businesses globally and generate roughly 70 percent of employment, making improved access to finance a key development priority.
Makhtar Diop, managing director of IFC, said the facility demonstrates how partnerships between development institutions and private insurers can unlock financing for underserved markets.
He noted that while small businesses remain major drivers of employment, many firms in emerging economies continue to face significant barriers to credit access, limiting growth opportunities.
The transaction represents IFC’s largest mobilisation under a single agreement and ranks among the biggest credit insurance facilities arranged by a multilateral development institution.
Participating insurers include major global players such as AIG , Allianz Trade, Arch Insurance International, AXA XL (XL Bermuda), AXIS Capital, Chubb, Convex Group, Everest , HDI Global, Liberty Mutual, Markel Group.
Others include MSIG (MSIG USA and Mitsui Sumitomo Insurance), Munich Re, RenaissanceRe, SCOR, Sompo International, Swiss Re, The Hartford, Tokio Marine (HCC International Insurance Company and Tokio Marine & Nichido Fire Insurance Company).
By leveraging IFC’s project assessment and due diligence processes, insurers participating in the programme are able to deploy capital more efficiently while reducing the costs and complexities typically associated with underwriting risks in unfamiliar emerging markets.
The facility marks IFC’s fifth transaction under its Managed Co-Lending Portfolio Program (MCPP) for credit insurers, bringing total mobilisation under the programme to $15.5 billion since its launch in 2017. Overall, the broader MCPP platform has grown to $25.5 billion in funds and credit risk capacity aimed at channeling private capital into emerging economies, including low-income and fragile markets.
Industry participants said the programme highlights the increasing role insurers can play in development finance by supporting lending expansion while diversifying their own risk portfolios.
The new facility is expected to strengthen financial systems in emerging markets by improving access to funding for small businesses, which are widely regarded as key drivers of economic growth, employment and financial inclusion.
