2025 Public Sector Perspectives

How GEMs delivers insights into EM credit risk The Global Emerging Markets (GEMs) Risk Database was founded in 2009 as a joint initiative between the European Investment Bank (EIB) and the International Finance Corporation (IFC). Today, the GEMs consortium has grown to include all major MDBs and DFIs worldwide; its database is one of the world’s largest credit risk repositories in emerging markets. Contributions by members include almost 20,000 financing contracts with more than 11,000 counterparties in over 170 countries over 35 years. Individual GEMs members submit information on credit defaults of their loans in emerging markets, how its clients’ credit ratings have changed, and the recovery data on defaulted projects. This data is collected annually, anonymized, and then pooled to provide aggregate statistics on observed default rates, ratings migration and recovery rates by geography, sector, time period and various other dimensions. This data provides members with insights into geographies that are otherwise poorly served in terms of empirical credit information. In 2020, the GEMs consortium began to publicly disseminate some of these statistics; and in March 2024 GEMs published recovery rates for private and sub- sovereign lending for the first time. 8 Creating a NewCatalytic Asset Class