Credit Insurance

IFC uses credit insurance to distribute risk to private insurance companies on an unfunded basis, expanding mobilization beyond traditional funded syndications. Our credit insurance program enables private insurers to gain exposure to long-term impact underwriting opportunities in developing economies, while providing IFC with an additional third-party mobilization channel.

IFC currently uses unfunded mobilization instruments on both individual loans to single borrowers and on multi-borrower loan portfolios under the Managed Co-Lending Portfolio Program (MCPP).

How It Works

Credit insurance supplements IFC’s traditional funded syndications, allowing us to syndicate risk to new partners that do not have the ability to provide funding.

IFC signs a credit insurance policy or unfunded risk participation agreement with insurers, transferring a portion of the credit risk on new investments. With the insurers as a backstop, IFC can make larger commitments from its own balance sheet, while funding the entire amount of the borrower’s loan.

Benefits to Insurance Companies

• Portfolio diversification and access to uncorrelated returns.
• Ability to build tailored global or sector-specific portfolios.
• Cost-effective and streamlined processes to IFC’s origination and underwriting capacity.
• Priority access to IFC’s unique pipeline of global assets under MCPP.
• Standalone policies allow insurers to develop products in new markets.

Benefits to Borrowers

• Simple documentation and a single funding source to reduce transaction costs and time to get a complete financing package.
• Insured amounts available on the same terms as IFC, including longer tenors.
• Reduced complexity, with IFC as the sole interface and lender of record.