MIGA innovates as  investment in developing countries declines.


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What is MIGA?

An international financial organization called the Multilateral Investment Guarantee Agency (MIGA) provides credit enhancement guarantees and insurance against political risk. These assurances aid foreign direct investors in securing their funds from risks associated with politics and other non-commercial activities in developing nations.  The headquarters of MIGA, a member of the World Bank Group, is in Washington, D.C.

To promote secure investment in developing nations, MIGA was founded in 1988 as an investment insurance facility. Despite having its own executive leadership and staff who manage its daily operations, MIGA is owned and run by its member states. Member governments that contribute paid-in capital and have the right to vote are their shareholders. Member governments that contribute paid-in capital and have the right to vote are their shareholders. Long-term contracts, investments in equity and debt, and other assets are all insured by it. Every year, the agency is evaluated by the Independent Evaluation Group of the World Bank.

MIGA History

A multilateral provider of political risk insurance was proposed. Long before MIGA was founded, in fact as early as 1948, the concept of a multilateral political risk insurance provider was proposed. But this concept didn’t start to materialize until September 1985. The MIGA convention, stated the new affiliate’s core mission as “to enhance the flow of capital and technology to developing countries for productive purposes under conditions consistent with their developmental needs, policies, and objectives, on the basis of fair and stable standards to the treatment of foreign investment,” was endorsed by the World Bank Board of Governors at the time.

A global convention made MIGA the newest member of the World Bank Group on April 12, 1988. The organization began operations as a separate legal and financial entity. All IBRD members were eligible to join, and the agency started out with $1 billion in capital stock. Bahrain, Bangladesh, Barbados, Canada, Chile, Cyprus, Denmark, Ecuador, Egypt, Germany, Grenada, Indonesia, Jamaica, Jordan, Kuwait, Lesotho, Malawi, Netherlands, Nigeria, Pakistan, Samoa, Saudi Arabia, Senegal, Sweden, Switzerland, and the United States were among the original 29 members of MIGA.

MIGA was established to supplement public and private sources of non-commercial investment insurance in developing nations. Cross-border investors believed that MIGA’s multilateral nature and joint sponsorship by developed and developing countries had significantly increased their level of confidence.

The mission of MIGA today is clear-cut: to encourage foreign direct investment in developing nations to support economic growth, combat poverty, and enhance people’s quality of life.

The MIGA Strategy

In order to combat the COVID-19 pandemic and its broader economic effects, MIGA will assist nations and businesses.

The Agency is dedicated to contributing fully to the accomplishment of the twin goals of the World Bank Group and to assisting the World Bank and IFC in fulfilling their capital package commitments.

The Agency will increase the percentage of its guarantees it provides to IDA nations, fragile and conflict-affected situations (FCS), and climate finance.

MIGA Member Countries

Developing Countries (154)

ASIA AND THE PACIFIC: Afghanistan, Bangladesh, Bhutan, Cambodia, China, Fiji, India, Indonesia, Korea (Republic of), Lao People’s Democratic Republic, Malaysia, Maldives, Micronesia (Federated States of), Mongolia, Myanmar, Nepal, Pakistan, Palau, Papua New Guinea, Philippines, Samoa, Singapore, Solomon Islands, Sri Lanka, Thailand, Timor Leste, Vanuatu, Vietnam

EUROPE AND CENTRAL ASIA: Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Bosnia and Herzegovina, Croatia, Cyprus, Georgia, Hungary, Kazakhstan, Kosovo, Kyrgyz Republic, Republic of North Macedonia, Malta, Moldova, Montenegro, Poland, Romania, Russian Federation, Serbia, Slovak Republic, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan

LATIN AMERICA AND THE CARIBBEAN: Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, Uruguay, Venezuela (República Bolivariana de)

MIDDLE EAST AND NORTH AFRICA: Algeria, Bahrain, Djibouti, Egypt (Arab Republic of), Iran (Islamic Republic of), Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syrian Arab Republic, Tunisia, United Arab Emirates, Yemen (Republic of)

SUB- SAHARAN AFRICA: Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo (Democratic Republic of), Congo (Republic of), Côte d’Ivoire, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia (The), Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Nigeria, Niger, Rwanda, São Tomé and Principe, Senegal, Sierra Leone, Seychelles, Somalia, South Africa, South Sudan, Sudan, eSwatini, Tanzania, Togo, Uganda, Zambia, Zimbabwe

Industrialized Countries (28)

Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United States

 MIGA Governance

The Council of Governors, which represents the member nations, oversees MIGA. Although the Council of Governors has some corporate authority, the Board of Directors of MIGA has the majority of these rights. The 25-member Board of Directors makes decisions on issues brought before MIGA. The weight of each director’s vote is determined by the combined share capital of the member countries that the director represents. The board of MIGA is based in Washington, D.C., where it meets frequently to manage agency operations. The agency’s executive vice president is in charge of daily management and overall strategy. Hiroshi Matano is MIGA’s executive vice president as of 16 December 2019.

MIGA Membership

Member nations of the Multilateral Investment Guarantee Agency
The 182 governments that make up MIGA—156 developing nations and 25 industrialized nations—own it. 181 UN member states plus Kosovo make up the membership. Only nations that are members of the World Bank, specifically the International Bank for Reconstruction and Development, are eligible to join MIGA.

As of 2022, Brunei, Kiribati, the Marshall Islands, San Marino, Tonga, and Tuvalu are the six World Bank member countries that are not MIGA members (the UN member states that are non-members of the World Bank, and thus MIGA, are Andorra, Cuba, Liechtenstein, Monaco, Nauru, and North Korea). Palestine and the Holy See are not MIGA members. The newest nation to join MIGA is Somalia, which did so in March 2020.

Financial Assurances

The five non-commercial risks that MIGA offers insurance to cover are currency inconvertibility and transfer restrictions; government expropriation; war, terrorism, and civil unrest; contract breaches; and failure to meet financial obligations.
Equity, loans, shareholder loans, and shareholder loan guarantees are among the types of investments that MIGA will cover. Leasing activities, asset securitization, bonds, franchise, and license agreements, among other investments, may also be insured by the agency. The organization typically provides insurance protection for a period of up to 15 years, with a potential five-year extension depending on the nature and circumstances of a specific project. MIGA may enforce the investor’s rights against the host when an occurrence covered by insurance occurs.

A small and medium enterprise project must have 300 or fewer employees, total assets under $15 million, and annual revenues under $15 million in order to be eligible for the Small Investment Program. The maximum investment guarantee request amount allowed by MIGA is $10 million, and the maximum duration of the guarantee is 10 years with a potential 5-year extension. The annual reports of MIGA provide an overview of the organization’s operations.

MIGA innovates as  investment in developing countries declines.

In the second quarter of 2022, global foreign direct investment (FDI) flows decreased by almost a third, with flows to several emerging regions declining significantly and flows to Africa approaching zero, according to a recent report by the United Nations Conference on Trade and Development. At best, the future of FDI looks bleak.

Although FDI is thought to be essential for knowledge transfer and capital formation in emerging economies, flows to these countries have been largely stagnant for a decade and have not kept up with their overall economic growth.

New Products

The Multilateral Investment Guarantee Agency (MIGA), an organization that is a part of the World Bank Group and whose goal is to encourage investment in developing nations, has increased the variety of products it offers in response to this situation. When MIGA was first established in 1988, it focused on using political risk insurance to encourage FDI.

In order to supplement its existing FDI-supporting products, MIGA developed the first of a number of alternative guarantee products in 2009 to encourage emerging market investment in other ways.

It unveiled its Capital Optimization product, which guards against the confiscation of capital reserves held by international banks in central banks of developing nations. With the money freed up by this product, local lending can increase development in important fields like climate finance, small and medium-sized businesses, and women-owned businesses.


Since its introduction, demand for the Capital Optimization product has increased steadily, and it is still in high demand today, particularly during the COVID-19 pandemic, as it continues to increase credit and liquidity in emerging and developing economies.

For instance, in June 2020 MIGA provided up to $235 million in guarantees to a fully owned subsidiary of the FirstRand Group of South Africa to cover reserves it holds in Botswana, Eswatini, Ghana, Lesotho, Mozambique, Nigeria, and Zambia. The MIGA guarantee allowed the bank to increase its lending in those countries.

Insurance for Government Loans

MIGA continued to innovate and introduced the Non-Honoring of Financial Obligations product in 2010. This product encourages private-sector lending to governments by preventing losses that might occur if payments are not made.

In 2013, a variation on the original non-honoring guarantee was introduced: It expanded the non-honoring coverage to include loans made to state-owned and sub-sovereign entities.

A university campus in Morocco, a port in Colombia, a green mortgage programme in Peru, loans to support small businesses, and the housing sector in Paraguay are just a few recent examples of projects made possible by MIGA’s non-honoring products.

While MIGA’s traditional political risk insurance is still essential to FDI, the new product categories have grown rapidly in recent years as a result of their assistance to underdeveloped nations during the poll crisis. Over the past five years, they have contributed to the majority of MIGA’s annual issuance.

Over the past five years, they have contributed to the majority of MIGA’s annual issuance.

Trade and COVID

The current COVID crisis gave MIGA another chance to innovate by modifying current guarantee products to offer quick access to liquidity and satisfy urgent needs. In 2021 and 2022, MIGA provided guarantees to support the purchase of urgent COVID medical supplies and services in numerous countries, as well as guarantees to mitigate the pandemic’s negative economic effects.

Among many other COVID-related projects on five continents, MIGA’s guarantees supported a green and inclusive recovery from the pandemic in Serbia, helped modernize the health system in the Bahamas, gave working capital to the government of Mexico to support its COVID response, and improved access to finance for small and women-led businesses in Cambodia that were struggling financially due to COVID.

Additionally, the pandemic caused bottlenecks in the global supply chain and an urgent need for critical goods to move more freely between nations. That necessitated a rise in trade finance, typically in the form of letters of credit and other financial instruments that can lower the payment risks associated with international trade.

In order to support trade flows of essential goods, such as food and medical equipment, in low-income and unstable countries, MIGA developed a new Trade Finance Guarantee product last year. This will aid in the revival of global supply chains that were harmed by the pandemic. A $20 million line of credit to Rwanda’s Bank of Kigali marked the launch of the first new guarantee in partnership with IFC in November, and more are on the way.

The successful rollout of MIGA’s guarantee products depends on the close ties MIGA has with IFC and the World Bank, just as the Trade Finance Guarantee was launched with IFC. The IDA Private Sector Window and various trust funds provide assistance to MIGA in the riskiest locations. We work together as one World Bank Group to improve people’s lives and means of subsistence in developing and emerging markets.

Innovation will undoubtedly continue to be a key component as MIGA completes its next three-year strategy. Even though supporting cross-border FDI will always be MIGA’s primary goal, the organization is now better equipped to tackle issues like climate change and other global public goods thanks to new products and methods.