EXCERPT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE APRIL 2014 EDITION.
With limited public funding available for socially and environmentally responsible programs, a variety of initiatives have been developed to attract private capital into sustainable development. Although still in their infancy, social impact bonds (SIBs) offer a promising outlook for sustained public-private partnerships. Social impact bonds are gaining momentum around the world. Also called “pay for success bonds” or “social benefit bonds,” SIBs are outcome-based contracts in which a commissioner (usually a public institution) agrees to pay private investors back if, and only if, pre-established social outcomes are reached. Co-Emergence has selected Kenya as the first country qualifying for a SIB. Using lessons from this first SIB, we plan to scale the approach to other parts of Kenya and other African countries, leveraging capital from impact investors.