FAQ

The GEMs Consortium is governed by a Steering Committee co-chaired by EIB and IFC, and comprising
senior officials from the European Bank for Reconstruction and Development (EBRD), International Bank
for Reconstruction and Development (IBRD), African Development Bank (AfDB), Asian Development Bank
(ADB), and Inter-American Development Bank Group (IDB Group). The Consortium is managed by the
GEMs Secretariat hosted at the EIB in Luxembourg, which is responsible for the overall coordination of
GEMs activities and the collaboration between Consortium members. The GEMs Secretariat also
provides facilities and infrastructure support.

In March 2024, IFC hired Delphos International to conduct an in-depth market study to assess the
relevance of GEMs statistics from an investor’s perspective. Survey results
(https://www.gemsriskdatabase.org/wp-content/uploads/2025/09/Research-Note_GEMs.pdf) indicate that:
(i) credit risk data is not readily available for investors; (ii) GEMs does not currently have sufficient visibility
among investors; (iii) investors familiar with GEMs value the availability and content of the GEMs statistics;
(iv) further disaggregation is desirable to guide investors’ asset allocation decisions in emerging markets;
and (v) country and sector level disaggregation are considered the most useful levels of granularity for
investors. The latest GEMs publications already address many of the main needs raised by investors in
this survey.

Access to default and recovery rates of MDB/DFI loan portfolios in emerging markets can help investors
better understand the risk profile of this asset class, and possibly be used in risk and pricing models. This
can help assess the risks of investing in emerging markets for private investors, especially when
investing alongside MDBs/DFIs, thus potentially helping mobilize private capital into these markets during
a critical time of multiple challenges and private investment needs.

Since 2021 the GEMs Consortium has been publishing its reports on the GEMs website. This was initially
done through annual reports focusing on default rates for private and public lending. Starting in 2022, the
reports have also covered sovereign and sovereign-guaranteed lending. In March 2024, for the very first
time, the GEMs Consortium published recovery rates for private and public lending.
In October 2024, the Consortium released two other first-of-a-kind reports available on the GEMs website
in PDF and excel forms: Default and Recovery Statistics for private and public lending for the period 1994-
2023, and Default and Recovery Statistics for sovereign and sovereign guaranteed lending for the period
1984-2023. With the publication of these reports, the GEMs Consortium has completed the coverage of
publicized recovery statistics by also including those for sovereign and sovereign-guaranteed lending.
In October 2025, the GEMs Consortium published three reports covering private lending, public lending,
and sovereign and sovereign-guaranteed lending.

The three new GEMs publications published in October 2025 include new metrics for default rates, including by country and sector,
by income group and region, and by project type. For recovery rates, these include by continent, by sector
groupings, by World Bank region and Global Industry Classification Standard (GICS), by seniority, and by
project type.

Private Lending
By sector, defaults were lowest in financials at 2.26 percent. The financial sector also showed the highest
recovery rate at 79.1 percent. By region, while default rates were highest in Sub-Saharan Africa (6.05%),
the recovery rate in Sub-Saharan Africa was also the highest across regions at more than 78%.

Public Lending
Recovery rates for more than 1,000 public entities averaged 85.8 percent, the high success rate owing in
part to the benefit of state guarantees. Latin America and the Caribbean recorded the highest average
recovery rates while East Asia and the Pacific recorded the lowest.

Sovereign and Sovereign-guaranteed Lending
Default rates captured by MDBs on their lending to sovereign entities were significantly lower
than those observed by international credit rating agencies for sovereign lending from non-MDB
lenders. Recovery rates on loans to sovereign and sovereign-guaranteed entities averaged 95.1
percent.

Emerging markets have long been viewed as high-risk destinations for investment, particularly for loans
to businesses. This perception stems largely from uncertainty about repayment prospects and limited
historical data. Investors, without reliable metrics on likely default and recovery rates, often approach
emerging markets with great caution. The newly released GEMs statistics in October 2025 provide a more
nuanced view of these risks and insights into the behavior of loans to emerging market firms over the past
three decades, as experienced by the MDBs and DFIs. When analyzing the annual average default rates
over periods of economic and financial crises, the statistics also highlight the benefits of incorporating
emerging markets into diversified investment portfolios. For example, during the 2008 global financial
crisis, which originated in the advanced economies, defaults by emerging market firms were less
pronounced than among their advanced economy counterparts. This suggests that advanced economy
investors with portfolios including emerging markets reaped diversification benefits at a crucial time.
While default and recovery rates for private investors going alone into these markets may be different
from the GEMs portfolio, GEMs statistics provide a useful benchmark thus far unavailable.

As harmonizing of data methodologies and definitions continues across the 29 GEMs members, the GEMs
Consortium strives to continuously improve the level of disaggregated statistics published to better guide
investor decisions. The October 2025 set of GEMs annual reports include new metrics for default rates,
including by country and sector, by income group and region, and by project type. For recovery rates, these
include by continent, by sector groupings, by World Bank region and Global Industry Classification Standard
(GICS), by seniority, and by project type.

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. GEMs statistics are shared on the GEMs website, LinkedIn page, on the external channels
of Consortium members, on Bloomberg Terminal and on the World Bank Group’s Data360 platform. The
Consortium regularly holds investor roundtables, outreach events and roadshows to share GEMs findings
and raise awareness of emerging market risks and opportunities. To date, events have been held in
Addis Ababa, Bangkok, Brussels, Frankfurt, London, Luxembourg, Manilla, Nairobi, Paris, Sevilla, and
Washington, D.C.

Consistent with the practice of commercial banks and of most public sector financial institutions, detailed
underlying loan portfolio data cannot be made public as this constitutes commercially sensitive
information that is protected by confidentiality agreements. To ensure confidentiality, members of the
GEMs Consortium only have access to aggregated anonymized statistics of other members.