The next wave of development finance innovation

This article in the category of innovative finance describes how impact investing financial products add a development objective to an investment goal and establish a key link between sustainability targets and commercial capital. In doing so they address a major funding dilemma facing social enterprises and sustainability-focused small and medium-sized enterprises, especially in developing countries where these funding gaps are pressing. Never before has so much capital been available at such low costs, yet very little of it makes it way to social enterprises.The article concludes that commercial finance can and should play a large part in funding a sustainability agenda. In the second half of the article some innovative financial instruments that aim to support impact are being presented: Development Impact Bonds, Social Success Note, Green Bonds and Pandemic Bonds.