Logo of Phnom Penh Post newspaper Phnom Penh Post - Bond to funnel benefits to women

Bond to funnel benefits to women

A woman receives money from a finance officer at a Prasac Microfinance Institution branch in Phnom Penh in 2015.
A woman receives money from a finance officer at a Prasac Microfinance Institution branch in Phnom Penh in 2015. Hong Menea

Bond to funnel benefits to women

An $8 million bond set to debut on Singapore’s stock exchange will mobilise private capital to support social enterprises and microfinance institutions (MFIs) in Cambodia, Vietnam and the Philippines, providing nearly half a million women in these countries with more access to credit in order to improve their livelihoods.

The Women’s Livelihood Bond (WLB), billed as the first-ever social sustainability bond, was developed by Impact Investment Exchange (IIX), a Singapore-based organisation that works toward increasing the access to capital for social enterprises in Asia.

The WLB has a maturity of four years and a coupon rate of 5.65 per annum, according to IIX. The $8 million bond will initially list on the Singapore Exchange, though could eventually be migrated to the Impact Exchange, a Mauritius-based platform devoted to listing shares and bonds issued by impact enterprises, NGOs and social impact funds.

Proceeds from the bond will be used to provide loans to social enterprises and MFIs across Cambodia, Vietnam and the Philippines, enabling them to better serve women beneficiaries and improve their access to finance, essential goods, income-generating assets and vocational training.

An IIX spokesman said the bond saw a strong demand from global institutional and high net worth investors, with over 60 percent of these investors coming from Asia.

“IIX received a high level of interest for this bond from investors across geographies that were attracted by its dual focus in social and financial return,” the spokesman said.

“Having over 60 percent Asian investors was a big move for impact investing in emerging markets and a testament to IIX’s deep track record in the region.”

Forty percent of the loan proceeds, or about $3.2 million, will be channelled to Cambodia to support local MFIs, enabling them to expand their beneficial impact on women through credit creation and providing access to affordable goods and services.

“The underlying borrowers are sourced and screened through an intensive process which assesses the entities using both financial and social criteria,” the spokesperson said.

According to the bond’s information sheet, the borrower selection criteria requires that the institutions are financially stable and operationally mature, and have a focus on serving low-income or marginalised women as well as a commitment to improving their livelihoods.

To mitigate the bond’s risk, the United States Agency for International Development (USAID) has put up a 50 percent guarantee on the loan portfolio, while IIX is providing $500,000 first-loss capital.

“USAID is pleased to be backing the WLB with a loan guarantee. Working with Australian Department of Foreign Affairs and Trade, we are helping to mitigate risk and attract investors, as evidenced by the full $8 million capitalisation of this bond,” said Todd Sorenso, deputy mission director at USAID’s Regional Development Mission for Asia.

Robert Kraybill, managing director of IIX, said the WLB has received the support from a wide range of stakeholders, and more are expected to join.

“We are delighted to work with new partners such as DBS Bank, Shearman & Sterling, Hogan Lovells and ANZ Bank, who have helped in supporting our efforts to create this innovative financial structure for social good,” he said. “We look forward to bringing in new partners into this exciting space of impact investing.”

This article was corrected, as the company name and the selection criteria for the bond's information sheet was misstated. The company name should be Impact Investment Exchange, not Impact Investment Exchange Asia. According to the bond's information sheet, it should be the borrower selection criteria, and not MFI selection criteria.

MOST VIEWED

  • Hong Kong firm done buying Coke Cambodia

    Swire Coca-Cola Ltd, a wholly-owned subsidiary of Hong Kong-listed Swire Pacific Ltd, on November 25 announced that it had completed the acquisition of The Coca-Cola Co’s bottling business in Cambodia, as part of its ambitions to expand into the Southeast Asian market. Swire Coca-Cola affirmed

  • Cambodia's Bokator now officially in World Heritage List

    UNESCO has officially inscribed Cambodia’s “Kun Lbokator”, commonly known as Bokator, on the World Heritage List, according to Minister of Culture and Fine Arts Phoeurng Sackona in her brief report to Prime Minister Hun Sen on the night of November 29. Her report, which was

  • NagaWorld union leader arrested at airport after Australia trip

    Chhim Sithar, head of the Labour Rights Supported Union of Khmer Employees at NagaWorld integrated casino resort, was arrested on November 26 at Phnom Penh International Airport and placed in pre-trial detention after returning from a 12-day trip to Australia. Phnom Penh Municipal Court Investigating Judge

  • Takeo hand-woven silk items provide local high-quality alternative to imports

    After graduating from university and beginning her career as a civil servant at the the Ministry of Economy and Finance, Khieu Sina found time to establish a business that aligns with her true passion – quality hand-woven Khmer goods. Her product line, known as Banteay Srei,

  • Two senior GDP officials defect to CPP

    Two senior officials of the Grassroots Democratic Party (GDP) have asked to join the Cambodian People’s Party (CPP), after apparently failing to forge a political alliance in the run-up to the 2023 general election. Yang Saing Koma, chairman of the GDP board, and Lek Sothear,

  • 11th Chaktomuk Short Film Festival draws to close

    Cambodia's 11th Chaktomuk Short Film Festival wrapped up successfully on November 28 after a four-day run, with the film “Voice of the Night” awarded top prize for 2022. Sum Sithen, the organiser of the short film festival, told The Post that the number of attendees to the