Impact investors could help Mexico finance programs that reduce violence and reintegrate ex-offenders into society.
A successful £5 million social impact bond in Peterborough, England helped keep fewer prisoners from returning to prison. Along with 88 others, social impact bonds have raised $322 million in 19 countries to take on homelessness, worker training, education and prison recidivism.
Mexico’s impact investment market is $1 billion and growing. Public safety, along with education, health and employment are ripe for impact bonds, says a new report from from the Brookings Institution and Mexican think tank Ethos.
Such bonds can “finance certain aspects of public services, including coverage and quality, in a transparent, innovative and collaborative manner, while also generating savings for the government,” the report concludes. Mexico is Latin America’s second-largest economy but lags in education, health and equality.
Mexico’s first impact bond, in the state of Jalisco, aims to train 1,320 female heads of household to increase their purchasing power, savings, and assets. The Jalisco government and the Global Innovation Fund will repay the Multilateral Investment Fund and other impact investors after 30 months, if trainings hit their targets.