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MIF and Swiss Government partner to launch the first Social Impact Bond fund in Colombia

Oct 7, 2016

The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank (IDB) Group, the Government of Switzerland, through its State Secretariat for Economic Affairs (SECO), and the government of Colombia, through its Department for Social Prosperity (DPS), will partner to launch an innovative pay-for-success model to improve urban employment for vulnerable groups in Colombia. 

The model, known as a Social Impact Bond (SIB), is an innovative type of public-private partnership through which impact investors provide up-front funding for organizations to deliver a service that benefits a vulnerable population. Repayment to the investors depends on the project’s outcome. Such models have been used in Western Europe and the United States since 2010, but have only recently been explored for emerging markets. Once launched, the SIBs funded by this project will be among the first to be launched outside of Europe and the U.S. and the first SIBs in Colombia. The IDB and the MIF have been working since 2014 on laying groundwork for developing SIB projects in Latin America and the Caribbean.  

The project will facilitate the launch of three social impact bonds that will tie payments to improvements in employment outcomes. The project will also include technical assistance resources for market development and capacity building, and will rely on partners, including several Colombian government agencies, to achieve scale. 

Other partners in this effort include: other departments of the IDB Group; Fundacion Corona, which will serve as the executing agency for the project’s technical assistance; Fundacion Bolivar Davivienda and Fundacion Mario Santo Domingo, which will apply their resources, credibility, and leadership in impact investment in Colombia to help catalyze investment in the first social impact bonds; Instiglio, which will provide technical advisory support to the MIF and the Colombian government; and Fundacion Pro Bono, which will provide access to affordable legal advice.    

About the Inter-American Development Bank 

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

About the MIF

The Multilateral Investment Fund is an innovation lab for the Inter-American Development Bank Group. It conducts high-risk experiments to test new models for engaging and inspiring the private sector to solve economic development problems in Latin America and the Caribbean. The MIF addresses poverty and vulnerability by focusing on emerging businesses and smallholder farmers with the capacity to grow and create economic opportunities.

About the Swiss State Secretariat for Economic Affairs (SECO)

The Economic Cooperation and Development Division is part of Switzerland’s State Secretariat for Economic Affairs (SECO). It is responsible for the planning and implementation of economic cooperation and development activities with middle income developing countries, with countries of Eastern Europe and the Commonwealth of Independent States (transition countries) as well as the new Member States of the European Union. It coordinates Switzerland's relations with the World Bank Group, the regional development banks and the economic organizations of the United Nations.
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