The four-year, 5.65 percent coupon, structured by Singapore-based Impact Investment Exchange (IIX), will benefit women in Cambodia, Vietnam, and the Philippines. The bond is expected to be listed on the Singapore Exchange this month and will be the first social sustainability bond with a dual focus on social and financial returns to be listed on a major stock exchange.
Photo for illustration. Source: iixglobal.com
USAID is providing a 50 percent guarantee of the loan portfolio’s principal to mitigate risk, attract investors and support development.
“USAID is pleased to be backing the Women’s Livelihood Bond with this loan guarantee,” said Todd Sorenson, Deputy Mission Director at USAID’s Regional Development Mission for Asia in Bangkok. “The bond benefits women living in ASEAN states and was put together by an ASEAN-based company.” ASEAN is the Association of Southeast Asian Nations.
The Women’s Livelihood Bond will provide capital to a group of microfinance institutions and social enterprises that will help low-income women transition from subsistence to sustainable livelihoods and build the women’s resilience to socio-economic stresses. Long-term benefits, in addition to more successful women-owned businesses, include increased participation in the workforce, higher standards of living, and more education and health opportunities for women and children.
“This brings us one step closer to a day when our financial markets consider social and environmental impact on an equal footing with financial returns,” said IIX founder Durreen Shahnaz, noting that the Women’s Livelihood Bond was supported by public, private, and philanthropic institutions, including DBS Bank Ltd., ANZ Banking Group, the Rockefeller Foundation, the Clinton Global Initiative and Australia’s Department of Foreign Affairs and Trade.
Sixty percent of the capital for this bond was provided by Asian investors, mostly private banking clients. IIX is planning to develop additional social sustainability bonds in the future.
Since 1999, USAID – through the Development Credit Authority – has arranged more than $350 million in credit through 63 guarantees in 13 Asian nations. USAID’s loan guarantee for the Women’s Livelihood Bond is part of its commitment to the development of the ASEAN region. The United States partners with ASEAN to support economic integration, expand maritime cooperation, cultivate emerging leaders, promote opportunity for women, and address transnational challenges.
Translated by Linh Chi