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How South Africa’s first two have done.
By Zoheb Khan
6 Jun 2021 00:35
Delft after protests against the local government. One of South Africaâs first social impact bonds funded a project in the town. Image: Jaco Marais/Gallo Images via Getty Images
Social impact bonds are a financing model for social welfare services based on âpayment by resultsâ. They are relatively new: the first was launched in the UK in 2010, and the first in a developing country in Colombia in 2017. Nearly 140 have been launched in the last 10 years. About 70 are being developed.
In social impact bonds, investors provide working capital upfront to nongovernmental organisations (NGOs) to deliver services. If the NGO successfully meets predefined targets â like placing a certain number of work-seekers in jobs â outcome funders repay investors with interest. If NGOs miss the outcome targets, outcome funders reduce their payments to investors in propor
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