Risk transfer for MDBs: Transferring risk to lend more

Long-term development finance provided by multilateral development banks (MDBs) is key to advancing the United Nations’ Sustainable Development Goals (UN SDGs). MDBs are, however, constrained by the availability of capital. Risk transfer can shift risk from their balance sheets to expand lending. This paper explains how ground-breaking securitisation transactions have been used by MDBs and argues that, while there are challenges, this technique has significant potential to increase development lending.