Women’s Livelihood Bond

Prelims level : Economy Mains level : Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes
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In News:

  • World Bank, UN Women, and Small Industries Development Bank of India (SIDBI) have joined hands to launch a new social impact bonds exclusively for women, called Women’s Livelihood Bonds (WLBs), with an initial corpus of Rs 300 crore.


  • The bonds, which will have a tenure of five years, will be launched by SIDBI with the support of World Bank and UN Women. SIDBI will act as the financial intermediary and channel funds raised to women entrepreneurs through participating financial intermediaries like banks, NBFCs or microfinance institutions.
  • The proposed bond will enable individual women entrepreneurs in sectors like food processing, agriculture, services and small units to borrow around Rs 50,000 to Rs 3 lakh at an annual interest rate of around 13-14 per cent or less.
  • The WLBs will be unsecured, unlisted bonds and offer fixed coupon rate of 3 per cent per annum to bond investors
  • The first tranche of Rs 100 crore at 3 per cent per annum coupon rate per annum will be mobilised over the next four months through a bond placement by Sidbi
  • The bonds will be backed by a corpus fund to be mobilised through corporate social responsibility contributions and via grant support from the UK’s Department for International Development.
  • The corpus guarantee cover will enable women entrepreneurs to access credit at much lower rates of interest, according to a World Bank statement.
  • The new bonds will not only enable women self-help groups to graduate from ‘group borrowing’ to ‘individual borrowing’ but will also allow them to shift from development assistance towards more market-financed prograammes.
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