Financing Early Childhood Development: The Impact Bond Innovation Fund, South Africa
In November 2017, in Cape Town, South Africa, a group of unlikely partners came together to launch a financial experiment. The partners included an international NGO, a local community-based organisation, a financial consultancy, two corporate foundations, a local investment house, a Swiss-based private bank, and a provincial government department. Together, these partners were testing a hypothesis: that a Social Impact Bond (SIB), utilising funding from private investors and, if successful, repaid with interest by the government, could deliver more effective and efficient funding for early childhood development (ECD) than traditionally-funded programmes. The pilot project for this financing mechanism was a home-based ECD programme delivering services to a target of 2,000 children in two underserved communities near Cape Town.
This working paper is a result of the COFER Innovative Financing in Education and Development: Case Studies and Multi-Media Material for ELearning project, partially funded by the swissuniversities Development and Cooperation Network (SUDAC) under the development of ‘Consortia for Education and Research (COFER)’. The consortium is composed by the following partners: NORRAG, an associated programme of the Graduate Institute, Geneva, University of Fribourg (Switzerland), Zurich University of Teacher Education (Switzerland), Universidad Nacional de General Sarmiento in Buenos Aires (Argentina), Beijing Normal University (China), Tata Institute of Social Sciences in Mumbai (India), University of Cape Town (South Africa).