Women’s Livelihood Bond – Impact Investing through Inclusion
The Women’s Livelihood Bond (WLB) is IIX’s commitment to the Clinton Global Initiative (CGI) that sets out to address the needs of one of the most important groups in the equation of equitable and sustainable development: Women.
IIX will develop and implement a US$20 million WLB to be listed on Impact Exchange, allowing underlying borrowers to reach millions of additional beneficiaries. Many organizations – including both NGOS and Social Enterprises – recognize the importance of focusing on women in development. However, alarmingly, existing funding channels fall drastically short of development goals focused on women. The WLB sets out to boldly change this, providing impact organizations with the capital they need upfront, to support women in the most vulnerable communities today.
IIX acknowledges the dire need to empower women by supporting and expanding the sustainable livelihoods value chain through supporting existing Social Enterprises (SEs) and Microfinance Institutions (MFIs) as ideal for the WLB. There are many SEs and MFIs that focus on empowering women to overcome gender-based constraints and socio-economic barriers to achieve a sustainable livelihood. However, lack of access to funding is a major barrier to growth; preventing SEs and MFIs from scaling up to empower a greater number of beneficiaries. The WLB will have an expected maturity of four to five years and will be available to impact investors.
The Current Need:
- Limited access to critical assets/services translating into inability to scale businesses
- Lack of knowledge and skills compromising women’s earning capacity and job mobility
- Poor access to credit and finance resulting in vulnerability to economic shocks
- Absence of market linkages constraining women to the informal workforce
- Inefficient use of natural capital keeping women trapped in ‘subsistence’ livelihoods
The WLB will support SEs & MFIs to address the above by providing:
- Access to Skills: Equip low income women with the required employment skills to run and sustain their own businesses or integrate into the formal workforce
- Access to Capital: Provide affordable credit and access to finance to enable women to scale their business ventures or purchase income generating or non-land assets
- Access to Markets: Build and institutionalize market linkages that give women access to market information and competitive prices through Fair Trade
- Access to Natural Resources: Enable women to use land and natural resources such as fuel, forests, water more efficiently by equipping them with Natural Resource Management skills
How does the Women’s Livelihood Bond work?
The WLB is a pooled fixed income security issued through a Special Purpose Vehicle to support SEs and MFIs to scale their high-impact, revenue-generating programs to empower women. Organizations with similar financial needs and repayment abilities will be pooled as collective borrowers, entering into a formal contract with investors to repay the loan at maturity, with interest paid at fixed intervals over the bond duration.
With access to growth capital via the WIB, MFIs and SEs will be able to invest in expansion and truly make a difference to the communities in which they operate.
Over the life of the WLB, 550,000 women will be directly impacted, with myriad spill-over social, economic and environmental outcomes that will drive forward the global development agenda:
IIX was approached by the CGI in February 2014 to join its diverse community of leaders including CEOs of the world’s largest companies, leading NGOs and foundations, government representatives and prominent philanthropists.
In September 2014, IIX announced its Commitment to Action at the Clinton Global Initiative (CGI) annual meeting in New York City along with other changemakers around the globe.
Over the course of 12 months, IIX will:
- Develop a pipeline of potential WLB borrowers: revenue-generating social sector organizations which have proven impact to women’s lives, clear intention to scale, and capital requirements, accompanied by viable bond re-payment streams.
- Support these borrowers by developing the WLB, including structuring the WLB according to their capital needs and sources of repayment, defining a risk-layering strategy, and developing a comprehensive impact measurement framework.
- Market and list the WLB: analyze and advise on potential investor interest, define appropriate market strategy, engage partners (brokerage houses, institutional investors, CSR units of MNCs), and list the bond.
Women’s Livelihood Bond Structure
Funding SEs and MFIs is a smart impact investment as it leads to huge social and environmental outcomes, especially as these SEs and MFIs are already in existence and are able to generate impact. Today many SEs and MFIs lack the funds required to scale up their activities. WLB removes this barrier by raising a larger pool of capital and bringing together a group of underlying borrowers. Also, the WIB will provide economies of scale making access to financing more affordable for these borrowers.
The WLB allows SEs and MFIs to strengthen, deepen and expand their impact on the livelihoods of women across the world. Using the WLB funds, the SEs and MFIs will empower women as they gain access to capital, markets, and knowledge and develop skills that will enable them to build a sustainable livelihood. Consequently, this will not only impact the women themselves but also their families and future generations.
By investing in the WLB, impact investors will have the opportunity to make a direct impact on the lives of the end beneficiaries. By investing in the WLB, impact investors will have the opportunity to make a direct impact on the lives of the end beneficiaries.
A New Bond Aims To Save Women’s Lives in Developing Nations
Forbes, September 28, 2014
Singapore-based Impact Investment Exchange Asia (IIX) recently announced the Women’s Livelihood Bond (WLB) at the Clinton Global Initiative conference in New York.
IIX announces CGI pledge to promote clean-cookstove
The Financial Express, September 26, 2014
Impact Investment Exchange Asia (IIX) has announced its Clinton Global Initiative (CGI) Commitment to Action on Women’s Livelihood Bond (WLB) to help concerned organizations scale their clean-cook stove businesses, benefiting people including women from harmful air pollution.
IIX announces Clinton Global Initiative Commitment to Action on Women’s Livelihood Bond
Eco-Business, September 26, 2014
Impact Investment Exchange Asia (IIX), a leader in social sector development through impact investing, recently announced its Clinton Global Initiative (CGI) Commitment to Action on Women’s Livelihood Bond (WLB) at the 2014 CGI Annual Meeting.
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