Impact Bonds: An emerging market opportunity for innovative financing

Impact bonds are emerging as an innovative and effective way to foster relationships between public and private sectors and encourage socially responsible investments (SRIs) and drive progress on attaining Sustainable Development Goals (SDGs). There are two types of impact bonds -- social impact bonds (SIBs) and development impact bonds (DIBs). A DIB is a business model for achieving social outcomes in international development. In this model, an outcome payer, which can be a development agency or a foundation, enters into pay for success contract to compensate a service provider for social outcomes. The service provider, which can be for-profit or not-for-profit, gets upfront working capital from socially motivated investors to deliver services.

The full article was originally published on The Economic Times