World Bank

World Bank principles and guidelines for effective insolvency and creditor rights systems

The World Bank with the assistance of international financial institutions, leading insolvency organisations and international insolvency experts has developed principles that underpin sound insolvency and creditors' rights around the world.

The EBRD and other organisations participated in conferences, workshops, and drafting sessions to complete the World Bank principles. They were first approved in April 2001 and revised in 2005, 2015 and recently in 2021 to help policymakers build and improve the insolvency and bankruptcy systems that support micro, small and medium enterprises (MSMEs).

The World Bank principles rely on the fundamental premise that sustainable market development requires access to affordable credit. Capital investment can only happen in an environment where parties can manage the insolvency risk associated with credit relationships.

The principles distil international best practice in the design of insolvency and creditor rights mechanisms and are used to benchmark strengths and weaknesses of existing systems. They allow flexibility in domestic policy choices and take comparative domestic laws and institutions into account.