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Heard About Those Escrow Accounts Used to Secure Chinese Loans in Africa? Here’s What They Look Like in Action

by Eric Olander
Excerpt from a new report by the IMF that reviewed the Republic of Congo's debt situation and detailed the use of escrow accounts to service Chinese loans.

There’s been a lot of discussion in recent years about how Chinese lenders required high-risk borrowers in Africa and other developing countries to put large pools of money in offshore escrow accounts as a kind of insurance measure that guaranteed the creditor would be repaid.

But little is known about how those escrow accounts work in practice and when borrowing countries are forced to draw on them (and replenish) during difficult times.

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