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PRESS RELEASE February 19, 2019

World Bank Signs Agreement to Launch New Social Impact Bond

Mumbai, February 19, 2019:   Today the World Bank, UN Women and Small Industries Development Bank of India (SIDBI), along with some ten leading wealth managers and corporates, came together to launch a new social impact bond – women’s livelihood bonds - that will help rural women in some of India’s poorest states to set up or scale-up their own enterprises. This will be the first time that a social impact bond will connect investors with rural women entrepreneurs.

Till date, India’s National Rural Livelihoods Mission (NRLM) - the country’s largest initiative to improve the livelihoods of the rural poor, supported by the World Bank - has brought 50 million rural women into collectives and Self-Help Groups (SHG). .

But while women’s collectives could borrow from banks and microfinance institutions, individual women entrepreneurs faced many challenges when seeking to finance their own enterprises. Loans of Rs. 0.5 - 5 lakh is often viewed as being too small and too risky and charged interest of 20 to 24 percent.

to borrow around Rs.1 lakh to Rs. 1.5 lakh at 13 percent or less per annum - almost half the current cost.

Women in the states of Bihar, Jharkhand, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh and the North Eastern states, among others, are expected to receive most of the credit.

Support for individual women’s enterprises will help create millions of jobs. For instance, .

The new bonds will not only enable SHG women to graduate from “group borrowing” to “individual borrowing” but will also allow them to shift from development assistance towards more market-financed programs.

The bonds will be raised by SIDBI with the support of the World Bank and the UN Women. SIDBI will act as the Financial Intermediary and channel funds to women’s entrepreneurs through Participating Financial Intermediaries.

The WLB will be unsecured, unlisted bonds with a fixed coupon rate of 3 percent per annum and a five-year tenure.  They will be backed by a corpus fund to be mobilised through Corporate Social Responsibility (CSR) contributions and through grant support from UK’s Department for International Development (DFID). The Corpus Fund will monitor and track the program.  The Corpus guarantee cover will enable women entrepreneurs to access credit at much lower rates of interest.

Some of the biggest wealth management agencies like Centrum, ASK, Ambit, Aditya Birla capital among others have reached out to high net worth individuals and impact investors to raise funding. Companies like TATA Communications, Chemicals, Trent and Voltas have also expressed interest in investing.

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*Wealth Managers: Centrum Group, ASK Wealth Advisors, Ambit Capital and Aditya Birla Finance 

**Corporates: Tata communications, Tata Chemicals, Tata Trent, Tata Voltas, Tata Titan, KKR


PRESS RELEASE NO: SAR/2019

Contacts

New Delhi
Sudip Mozumder
Principal Communications Officer
smozumder@worldbank.org
Washington
Elena Karaban
Senior Communications Officer
ekaraban@worldbank.org
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