World Bank issues world’s first “women’s bonds”

Will raise money for businesses owned or run by women.

The World Bank said its private sector arm, the International Finance Corporation, issued US$165 million in “women's bonds,” the first debt sale by the WB specifically aimed at raising money for businesses owned or run by women in emerging markets.

IFC issued the new five-year, triple-A rated bond to Japanese investors. Bonds tied to social or environmental targets are part of a new trend of social finance, as a growing class of investors seek to bridge the gap between philanthropy and pure financial returns.

The money raised from the bond, which settles November 21, will go to local banks and financial intermediaries who are required to commit it to businesses in which women own the majority stake, or where they own at least a fifth of the company and hold senior leadership positions.

Besides helping businesswomen, women's bonds can help raise awareness about the importance of gender issues in development, said IFC. Women make up roughly half the world's population, but 70% of the world's poor people.

A third of small- and medium-sized businesses in emerging markets are owned by women, but they often face problems in accessing credit from banks. A joint study by IFC and consulting firm McKinsey & Company found that women entrepreneurs face a US$260 billion to US$320 billion credit gap, meaning the difference between the desired and actual level of loans businesses are able to get.