Social Bond

Social bonds are targeted bonds, the income from the placement of which is directed to the implementation of new and existing projects aimed at solving or smoothing a specific social problem and / or at achieving positive social change. (as an example of a social bond the following Eurobond can be cited).
Social bonds are issued in accordance with the principles established by ICMA.

The fields of application of this type of bonds are
• reduction of recidivism;
• decrease in the share of alcohol and drug-addicted people;
• provision of social assistance to destitute;
• meeting the need for education of socially unprotected segments of the population;
• improving the employability of migrants;
• development of preschool education;
• support for single mothers, families with foster children, orphans, disabled people;
• reducing the number of homeless people.

In many cases, the organization of the issuance of social bonds (preparation and signing of a contract, creation and maintenance of a financial instrument) is carried out by an independent organization - a (social) provider.

Types of social bonds
• SIB - Social Impact Bond. They work in the following way: international organizations pay money to investors due to the implementation of certain social goals. This principle is called pay-for-success.
• DIB - Development Impact Bond - social impact bonds, adapted for projects in developing countries. These bonds are similar in action to the previous type.
• HIB Humanitarian Impact Bond - humanitarian bonds for the implementation of charitable projects in the poorest countries.