The New Development Bank, established by Brics nations Brazil, Russia, India, China, and South Africa, is preparing to support a new fund aimed at providing affordable loans to impoverished families in Africa and Latin America, Brazil’s social development minister said. The fund, expected to launch by the end of 2026, would mark the Shanghai-based lender’s first direct financial commitment to Brazil’s Global Alliance Against Hunger and Poverty.
Speaking during the United Nations General Assembly in New York, Wellington Dias described the prospects for a pilot program valued at approximately $200 million as “very big.” The initiative, still undergoing compliance reviews by the New Development Bank and four other development lenders, is designed to offer loan guarantees that would help lower borrowing costs for poor individuals.
The alliance, founded at the G20 summit Brazil hosted in Rio de Janeiro in November 2024, has struggled for momentum after the United States assumed the G20 presidency in December 2025 and omitted hunger and inequality from the forum’s focus. Under Washington’s leadership, the G20 agenda has narrowed to issues such as deregulation, energy, technology, and trade, sidelining Brazil’s previous priorities related to poverty and hunger. Dias noted that the U.S. stance has left it “somewhat isolated” on the hunger issue and acknowledged that reduced aid from Washington poses a significant challenge for the alliance’s goals.
Although the Global Alliance Against Hunger and Poverty counts 215 members—including more than 107 countries and 14 international financial institutions—it has no dedicated funding pool and depends on contributions from its participants. The Inter-American Development Bank has been the alliance’s largest source of financing to date, committing up to $25 billion for programs between 2025 and 2030. It approved $4.1 billion in alliance-aligned operations last year and anticipates $5.8 billion in approvals for 2026.
Until now, neither the New Development Bank nor the Asian Infrastructure Investment Bank (AIIB), both based in China, had funded any alliance initiatives. Dias confirmed, however, that the Brics bank’s forthcoming involvement would come through the loan guarantee fund concept, which would enable local banks to extend credit to vulnerable borrowers while the fund absorbs potential defaults. This mechanism intends to reduce the perceived risk and interest rates for poor applicants, facilitating access to finance in both rural and urban areas.
China’s participation in the alliance has mainly centered on sharing domestic policy expertise and expanding grain production capacity by 50 million tonnes by 2030, without committing specific international financial resources. Chinese efforts abroad include advising on micro-credit policies through the International Poverty Reduction Centre in China, which has trained nearly 15,000 officials from over 140 countries. The center also organizes poverty reduction forums in cooperation with the Community of Latin American and Caribbean States.
Dias highlighted China’s broader investments in infrastructure and job creation across Africa and South America as an indirect contribution to poverty alleviation. He noted that Chinese financial support for the alliance has focused chiefly on family farming projects in African countries, working alongside other international donors.
The introduction of a loan guarantee fund by the New Development Bank adds a new financial dimension to the alliance, potentially strengthening efforts to address hunger and poverty in marginalized regions. The pilot program’s success could pave the way for expanded funding mechanisms tailored to the needs of low-income populations in developing countries.