³Ô¹ÏÍøÕ¾

Families living below the poverty line in developing countries can benefit from a $20 million boost, as part of a ground-breaking World Vision microfinance initiative.

In an Australian first, VisionFund International ­­­– the microfinance subsidiary of global children’s charity World Vision ­­­­– has launched a social impact bond with the aim of raising up to $20 million to provide loans to families living below the poverty line in developing countries.

VisionFund has calculated that in the first year alone, the bond has the potential to impact 290,000 people, 170,000 of whom are children.

The micro-loans ­– provided primarily to women entrepreneurs to seed and grow profitable businesses ­– can help generate profits that enable families to pay for school fees, buy nutritious food and create better living conditions in general for their children.

The loans fill a crucial gap in communities where people find it difficult to access loans, savings and insurance products.

As well as changing the lives of families in fragile communities, the five-year bond will offer a fixed rate of 5 per cent a year, paid half-yearly.

“This new channel of fundraising for VisionFund brings a unique social impact investment opportunity to Australians,” World Vision Australia CEO Claire Rogers.

“Investors will help VisionFund to deliver enormous social benefit by assisting primarily poor women to sustainably lift their families out of poverty by growing small businesses and increasing their family’s incomes.

“We appreciate that investors recognise the power of World Vision’s work and are joining us to change the lives of the world’s most vulnerable children.”

The bond builds on the work of VisionFund which, since its inception in 2004, has provided 16 million loans totalling about $US9 billion ($AU13.15 billion), introduced savings and micro-insurance products to promote client resilience and provided financial literacy training and business education.

Through its network of microfinance institutions located in 28 developing countries, VisionFund serves more than a million clients, almost 75 per cent of whom are women and often the main income earner and caregiver for their families.

The bond is being arranged by FIIG Securities Limited (FIIG), Australia’s largest fixed-income specialist. It represents FIIG’s first foray into impact investment.

In addition to FIIG, who have waived all fees to both VisionFund and their clients, Perpetual Trustees have also provided 100 per cent pro-bono services.

Other partners who have contributed pro-bono services in part include King & Wood Mallesons and MinterEllison, both providing legal services, and the Australian Securities Exchange through their subsidiary Austraclear.

Michael Mithika, president and CEO of VisionFund International said: “This is the first bond issued by a microfinance organisation to Australian investors and we are grateful for this opportunity to raise funds within Australia and to FIIG and all of our other partners who have dedicated their services in support of our work.”