Social Impact Bonds Are Coming to the Tropics
Tuesday, July 28, 2015
The challenges of providing education and formal employment, encouraging the empowerment of women, and stemming the rise in chronic diseases continue to be serious concerns throughout the developing countries and emerging markets of the world. Institutional roadblocks, mistrust between governments and investors, inconsistent and low-quality delivery of services, and a simple lack of funds have at times made it impossible to find solutions to these issues.
A growing number of developed countries–particularly the United States and European countries–are exploring a new financing mechanism called social impact bonds (SIBs) as an alternative to traditional ways of resolving some of their most intractable social problems. SIBs are a groundbreaking opportunity to bring private investors, philanthropic organizations, nongovernmental organizations (NGOs), and government to the same table to find innovative and evidenced-based solutions to social problems.