Prudence: the World Bank principles

Measured against the standard your own institutions wrote.

In 2015 the World Bank and the FIRST Initiative, with a task force of guarantee scheme and lender associations, published the Principles for Public Credit Guarantee Schemes for SMEs: the first common global standard for how a scheme should be designed, governed and run. Development institutions still use it to evaluate scheme design.

We assessed Prudence against all 16 principles, directly against its code rather than its marketing. The highlights are below; for more detail, write to us.

Strongest Built or substantially built

Claim management (Principle 13): Configurable waiting periods, early claims on an approved notice of intended claim, no requirement to sue the borrower first unless the scheme chooses one, an optional claims cap per bank and portfolio year, and a three-tier recovery waterfall after a claim is paid.
Eligibility and targeting (Principle 9): The scheme's limits on loan amount, tenure, guaranteed percentage and interest rate enforced on the server; enterprise-size classification; sector and type-of-business lists; financial-ratio flags for the scheme's review.
Funding transparency and capital adequacy (Principle 2): Initial capital, Board allocations, donor injections, investment income and recovery credits recorded separately; where leverage control is switched on for the scheme, the ceiling is enforced live at the point of approval, not just reported afterwards.
Individual and portfolio delivery (Principle 10): One platform, with a tiered auto-approval and delegation structure covering both models, and weekly random checks of the guarantees approved automatically.
Internal controls (Principle 7): Maker and Checker segregation of duties, checked by person, across claims, applications, disbursements, reports and recoveries; an audit trail that cannot be edited; weekly random checks of completed work, reported monthly to the credit committee.

Roadmap Not yet built

Formal financial statements for the scheme (Principle 14): Prudence already records the guarantee activity a scheme's financial statements draw on: fees, claims, recoveries and fund movements. Exports in formats the scheme's accountants can use are in the pipeline.
Risk-based, differentiated pricing (Principle 12): Under consideration. The World Bank's 2026 data shows most schemes (56%) differentiate pricing, but not that pricing alone reduces losses.

The other principles

Principles that sit with the scheme, not the software.

Five of the principles are decided by law, owners and regulators, and no system can meet them: the scheme's legal basis (Principle 1), its ownership (3), independent supervision (4), its mandate (5) and its board and governance (6). Prudence supports them with auditable records of every decision, but they are the scheme's to put in place.

Four more are policies each scheme sets for itself: its risk management framework (8), how coverage is shared with lenders (11), what it discloses publicly (15) and how it evaluates its impact (16). Prudence holds much of the data these policies draw on; the choices remain the scheme's.

The evidence

The World Bank tested which design features are associated with lower default rates. Here is where Prudence already applies them.

In May 2026 the World Bank surveyed 108 credit guarantee institutions in 74 countries and, for the first time, statistically tested which design features go with lower default rates and safer growth, rather than simply recommending them.

Governance quality

The evidence

Better-governed schemes, with independent oversight and enforced segregation of duties, operate at higher but more controlled leverage, and show significantly lower default rates once market conditions are taken into account.

In Prudence

A second person on every claim, disbursement and recovery decision, and on every application and report the scheme reviews, checked by person; work the system completes automatically is sampled by weekly random checks. Every server route checks who is asking, and automated tests sweep them route by route.

Funding diversification

The evidence

Schemes with diversified funding are far more likely to charge fees, earn investment income and price for risk. The funding model, not national income, drives financial sustainability.

In Prudence

Capital sources are recorded separately: initial capital, Board allocations, donor injections, investment income and recovery credits, never lumped into one balance.

Leverage discipline

The evidence

Higher leverage is consistently associated with higher default rates once governance and market conditions are taken into account. Leverage is not a free lunch.

In Prudence

Where leverage control is switched on for the scheme, the ceiling is enforced in real time: new approvals are refused once exposure would breach the configured ceiling.

Roadmap The same report recommends graduated leverage bands, with higher bands unlocked by demonstrated governance, funding and risk-transfer compliance, rather than one fixed ceiling. We are considering this as a next step for Prudence's leverage enforcement.

Source: Calice, P. (2026), "Global Anatomy of Credit Guarantee Schemes", World Bank Group.

Let's talk about your scheme.

Whether a scheme is still an idea or has been running for years, we can help at every stage.

Feasibility studies and business plans for new credit guarantee schemes
Redesigning or restructuring an existing scheme
Financial modelling, operating processes, policies and manuals
Moving from individual guarantees to a portfolio scheme
Training for the scheme team and partner financial institutions
Running the scheme on Prudence