EIB-IFC-Led GEMs Initiative Unveils New Statistics to Boost Transparency and Investment Confidence in EMDEs

EIB-IFC-Led GEMs Initiative Unveils New Statistics to Boost Transparency and Investment Confidence in EMDEs

(IN BRIEF) The Global Emerging Markets Risk Database (GEMs) Consortium, co-chaired by the EIB and IFC, has released three comprehensive reports offering new insights into default and recovery trends across emerging markets. Covering lending to private, public, and sovereign entities, the reports show that MDB and DFI-backed financing maintains low default rates and strong recovery performance, with private lending averaging a 3.54% default rate and 72.9% recovery rate, and sovereign lending achieving a 0.77% default rate and 95.1% recovery rate. The findings, based on data from over 40 years, highlight the resilience of MDB-backed investments and support greater investor confidence in EMDEs amid a global $10 trillion development finance gap projected by 2050.

(PRESS RELEASE) LUXEMBOURG, 7-Oct-2025 — /EuropaWire/ — Global Emerging Markets Risk Database (GEMs) Consortium Releases New Default and Recovery Statistics to Enhance Transparency and Investment Opportunities in Emerging Markets

The Global Emerging Markets Risk Database (GEMs) Consortium has unveiled new default and recovery statistics offering deeper insights into investment risks and opportunities across Emerging Markets and Developing Economies (EMDEs). The latest findings highlight how greater transparency can help unlock capital flows to these economies, which face an estimated $10 trillion financing gap by 2050, according to the OECD.

The GEMs Consortium, a collaboration of 29 multilateral development banks (MDBs) and development finance institutions (DFIs), has released three detailed publications: Default and Recovery Statistics: Private Lending 1994–2024, Default and Recovery Statistics: Public Lending 1994–2024, and Default and Recovery Statistics: Sovereign and Sovereign-guaranteed Lending 1984–2024. These publications introduce new and more granular datasets, enabling investors, analysts, and policymakers to gain a deeper understanding of credit risk performance across sectors, regions, and income groups.

Key Findings

Private Lending:
Data from over 10,000 private entities in 169 countries between 1994 and 2024 show an average default rate of 3.54%, comparable to advanced economies, and an average annual recovery rate of 72.9%, exceeding global benchmarks. Defaults were lowest in the financial sector (2.26%), which also achieved the highest recovery rate (79.1%). While Sub-Saharan Africa recorded the highest defaults (6.05%), it also achieved the strongest recovery rate (over 78%).

Public Lending:
Lending to public entities, including municipalities and state-owned enterprises, showed a decline in default rates over recent decades. Between 1994 and 2024, the average default rate was 2.61%, with recovery rates reaching an impressive 85.8%, aided by state guarantees. Latin America and the Caribbean achieved the highest recovery rates, while East Asia and the Pacific reported the lowest.

Sovereign and Sovereign-Guaranteed Lending:
For direct loans to 167 sovereign EMDEs, default performance was notably strong. Across a 41-year span, 39 countries experienced defaults, with 15 ongoing cases by the end of 2024. The annual default rate averaged 0.77%, considerably lower than non-MDB sovereign lending benchmarks, while recovery rates averaged 95.1%, underscoring the resilience of MDB-backed financing.

Enhanced Data and Broader Scope

This year’s publications include expanded metrics for both default and recovery rates, broken down by country, sector, income group, project type, and region. Recovery data are also presented by continent, sector group, seniority, and classification standards such as GICS.

“By providing more granular statistics that risk and investment professionals can use in their pricing and risk models, GEMs enables investors, credit rating agencies and policy institutions to better understand and manage investment risks in regions that have historically been underserved by empirical credit risk information,” said Gregor Cigüt, Head of the GEMs Secretariat in Luxembourg.

“With trillions in annual investments needed to meet global development and climate goals, we must make EMDEs investable at scale. GEMs provides the statistical foundation to help investors meet that goal,” he added.

The new reports are available at www.gemsriskdatabase.org/recent-publications, while GEMs data can also be accessed via the Bloomberg Terminal (search “GEMs” on DSET) and Data360, the World Bank Group’s open data platform.

For media enquiries contact:

Kristina Nwazota
Phone: +352 691 495 111
Email: k.nwazota@eib.org

About GEMs

The Global Emerging Markets Risk Database (GEMs) Consortium is a joint initiative of 29 multilateral development banks (MDBs) and development finance institutions (DFIs) that pools credit risk data on their lending operations in Emerging Markets and Developing Economies (EMDEs) and provides members and the public with the related statistics. Governed by a Steering Committee co-chaired by the European Investment Bank (EIB) and the International Finance Corporation (IFC), GEMs is the largest database of credit risk statistics on EMDEs. The GEMs Consortium is committed to raising awareness of its statistics to spur private investment in EMDEs and support standard setting bodies and pivotal stakeholders in their assessments and perceptions of credit risks in EMDEs. For more information about GEMs, visit www.gemsriskdatabase.org

SOURCE: European Investment Bank