USAID’s $8-M livelihood bond to aid 385,000 women in Southeast Asia

The United States Agency for International Development (USAID) is set to provide a four-year, $8 million worth of Women’s Livelihood Bond (WLB) for around 385,000 women in Southeast Asia.

The bond would give access to credit, market linkages, and affordable goods and services for low-income women particularly in Cambodia, Vietnam and the Philippines, the USAID said in a statement on Thursday.

“USAID is pleased to support the Women’s Livelihood Bond with this loan guarantee,” said Todd Sorenson, deputy mission director at USAID’s Regional Development Mission for Asia in Bangkok.

“The bond will benefit women living in Association of Southeast Asian Nations (ASEAN) states, particularly Cambodia, Vietnam and the Philippines,” he added.

The bond, structured by the Singapore-based Impact Investment Exchange (IIX), is expected to be listed on the Singapore Exchange this month. This would be the first social sustainability bond, with a dual focus on social and financial returns, to be listed on a major stock exchange.

USAID is also providing a 50 percent guarantee of the loan portfolio’s principal to mitigate risk, attract investors and support development.

The WLB, USAID said, would provide capital to a group of microfinance institutions and social enterprises that would help women with low-income build or enhance their own businesses.

Aside from this, long-term benefits from the bond could also include “increased participation in the workforce, higher standards of living, and more education and health opportunities for women and children,” according to USAID.

“This brings us one step closer to a day when our financial markets consider social and environmental impact on an equal footing with financial returns,” said IIX founder Durreen Shahnaz, noting that the WLB was supported by public, private and philanthropic institutions, including DBS Bank Ltd., ANZ Banking Group, the Rockefeller Foundation, the Clinton Global Initiative and Australia’s Department of Foreign Affairs and Trade.

“Sixty percent of the capital for this bond was provided by Asian investors, mostly private banking clients, and IIX is planning to develop additional social sustainability bonds in the future,” said USAID.

Since 1999, USAID, through the Development Credit Authority, had reportedly arranged more than $350 million in credit through 63 guarantees in 13 Asian nations. USAID said its loan guarantee for the WLB is part of its commitment to the development of the ASEAN region.

“The U.S. government partners with ASEAN to support economic integration, expand maritime cooperation, cultivate emerging leaders, promote opportunity for women, and address transnational challenges,” the organization added. JE