The Symbiotics Bond Programme

The Symbiotics Bond Programme is an innovative bond issuance programme sponsored by Symbiotics SA. It has a specific focus on financial inclusion, and is purposely designed to bring together socially responsible investors and financial institutions to help plug the funding gap faced by micro, small and medium enterprises (MSMEs) in emerging markets, improving their access to finance.

Access to finance is still the largest obstacle to growth for these institutions. They largely depend on self-financing solutions, as mainstream commercial banks and financial institutions continue to underserve their needs. The size of this funding gap has been estimated at around USD 2.1 to USD 2.6 trillion in developing economies, and the total number of MSMEs is estimated to be 360 to 440 million in developing countries. As many as 44% don’t have access to a loan or overdraft facility, even though they need one.

These MSMEs play a very important role in developing countries. They employ the largest number of people in aggregate and generate the majority of new jobs. Deploying capital to MSMEs aims to improve the general wealth condition of low and middle-income households and to contribute to sustainable economic development, which is the long-term goal of the Symbiotics Bond Programme.

As of July 2017, the Symbiotics Bond Programme has issued 84 impact bond transactions for a total notional amount of USD 775m, investing in 62 different intermediaries and 27 different countries. Each bond is backed by a loan agreement with a specific financial institution and segregated from any other bond issues. On one side, issue proceeds of a given bond are used to disburse the loan to the financial institution that on-lends it to MSMEs in form of small loans. On the other side, the interests and the principal received under the loan are passed-through to the bond investor.

Symbiotics SA, the sponsor of this programme, is a Geneva-based investment firm dedicated to inclusive and sustainable finance in emerging markets. Since 2004, the company has invested over USD 4bn in more than 350 institutions in 75 emerging countries, working with more than 28 investment funds and many other institutional investors. Each investment made by Symbiotics needs to target domestic markets in emerging and frontier economies, investing in the real economy, promoting the social function of finance and seeking long term value creation. Symbiotics integrates sustainability and social responsibility ratings in the investment process. The goal of these investments is to benefit low and middle-income households and micro, small and medium enterprises, to foster job creation and access to primary goods, such as to homes, food and energy.

Resources

Why Microfinance Matters

Symbiotics bond brochure

Annual report 2016

The Symbiotics Bond Programme Research Reports

The Symbiotics Bond Programme Impact Report