Can proceeds from bonds pay for vaccines in poor nations? This article presents an overview of impact investing with special emphasis on social impact bonds
Financial crises come and go. The bond market’s reputation endures. In the 1990s, Bill Clinton’s campaign advisor James Carville said, “I used to think if there was reincarnation, I wanted to come back as the president or the pope … But now I want to come back as the bond market. You can intimidate everybody.”
Its ability to deliver benefits on a large scale is the wellspring of impact investment’s appeal. “If the goal was simply to provide clean water to a single village in Ghana, or to provide better education in a single community in India, charity and government subsidy are up to the task,” notes Antony Bugg-Levine. “But if the goal is to provide clean water to the billion people in the world who need it, or to close the education gaps not just in one village, but in all the villages and slums of the world, we don’t have the luxury to work alone, without the private sector and for-profit investors.”
[This article has been reproduced with permission from the Indian School of Business, India]