If Leslie Maasdorp — the head of the United Kingdom’s development finance institution, British International Investment — had a magic wand, he’d use it for one thing: guarantees.
“Guarantees are the most underrated, underutilized instrument in development finance,” said Maasdorp, speaking during a recent Devex Pro event.
Guarantees are a financial instrument where a third party — such as a government, multilateral development bank, or DFI — promises to cover some or all of a commercial lender’s losses in the event a loan or other project finance is not repaid