Colombia launches social impact bond to jumpstart employment
The Colombian and Swiss governments are backing a 2.2 billion peso ($765,000) program to offer skills training to 514 vulnerable, poor, and unemployed people in the cities of Bogotá, Cali, and Pereira.
Colombia is grappling with nine percent unemployment; the rate is higher among low-skilled and vulnerable people, and youth.
It is the first country in the Global South to offer a SIB; similar “development impact bonds,” launched in India and Peru, have been funded by outside backers.
The Colombian SIB’s investors include three foundations: Mario Santo Domingo, Bolivar Davivienda, and Corona.
Investors will be repaid over the two-year bond based on participants a) obtaining and b) sustaining employment for at least three months. Investors receive a 10 percent bonus payout for retention rates of six months or longer.
Advisory firm Instiglio structured the deal.
This post originally appeared in ImpactAlpha’s daily newsletter. Get The Brief.
Photo credit: Debora Silva
