World Bank to Venture With Insurance Firms to Lend Monies for COVID-19

World Bank to Venture With Insurance Firms

World Bank to Venture With Insurance Firms to Lend Monies for COVID-19

International Financial Corporation (IFC), an entity of World Bank Group, has come up with an initiative to disburse loans to banking and non-banking institutions under the Managed Co-Lending Portfolio Program to help MSMEs sail through the economic breakdown caused due to the pandemic. The financial assistance from IFC is for underdeveloped and developing countries that are facing a financial downturn owing to COVID-19.

Insurance companies like Munich Re, Liberty Mutual, Liberty, Aspen, AXA XL, Everest & Tokio Marine HCC have come to the forefront to broaden IFC’s capacity of providing loans. The Global Insurance companies are set to allocate $2B under the Managed Co-Lending Portfolio Program.

John Gandolfo, treasurer of IFC, stated that the scheme was already in the pipeline while the pandemic had hit everyone, globally.

A financial partnership like this will help SMEs leverage this opportunity to acquire funding & sustainable growth based solutions for themselves. The objective of this financial initiative is to implement the idea of disseminating sustainability in growth & prosperity amongst underdeveloped nations.

Blueprint of the IFC partnership with Insurance companies

It is said that the joint venture will help the World Bank raise more than $10B under the MCCP. In this initiative, the risk involved in the provision of each loan shall be shared uniformly by IFC and the global Insurance giants, for up to an insured amount of $75M. For loan values crossing $150M, the risk will be split with IFC managing a bigger chunk of risk.

This partnership will also allow Insurance juggernauts to open themselves to newer & fresher markets and address the hazards faced by SMEs & Women-owned enterprises.

Jerome Swinscoe, Chief Underwriting Officer of Tokio Marine HCC, lauded IFC’s initiative. He believes that IFC’s initiative is one of a kind since it does not involve buying individual insurances for loans but splitting the risks involved in lending, which streamlines the process.

This scheme, when replicated, shall be a boon to the underdeveloped nations that are trying to emerge in newer markets.

About the Author /

bradly@financenews.global

Bradly Luna immersed in finance journalism for almost 5 years. He recently joined our team as a news reporter covering governmental events related to business and finance. He has working for multiple news websites before joining us. When he’s off-duty, he loves to ride on his bike.

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