To provide easy loans to small businesses, the Bangladesh Securities and Exchange Commission has taken the initiative to launch “Orange Bonds”, a type of financial instrument that aims to finance gender equality.
Calling the initiative an “innovative step” for women entrepreneurs, the chairman of the stock market regulator, Professor Shibli Rubayat-Ul-Islam, said they are now working on bonus guidelines.
“Female entrepreneurs running small businesses are often unable to get ahead thanks to poor access to bank loans and high interest rates. Our Orange Bonds will offer them an easy financing solution,” she told The Business Standard.
The idea of this sustainable financing is relatively new, as it aims to eliminate gender bias and improve equality and living standards for women in developing countries. The “Orange Bonds” initiative is derived from the color of the UN Sustainable Development Goal (SDG) 5: Gender Equality.
Professor Shibli Rubayat-Ul-Islam said that there are many women in rural Bangladesh who want to do something on their own. But, many of them do not understand how to avail bank loans while some do not even have a bank account.
“Our initiative is that they offer easy financing,” he added.
He said angel investors, high-net-worth individuals who fund early-stage startups, will put money into a taka-several crore fund, from which women entrepreneurs would tap for funding. They would repay once their companies started making a profit.
He mentioned that he has already spoken with some international charities.
Many banks offer loans to small women entrepreneurs on favorable terms. But loans often elude small businesses thanks to loan terms, collateral and other issues.
According to a central bank report, some 2.80 lakh small businessmen took out loans in the April-June quarter of the current year. Of them, 38,000 were women who got a total of Tk2,700crore in bank loans.
Globally, the Orange Bond Initiative will leverage the $100 trillion bond market to put women at the forefront of capital markets as solutions to achieving the 17 UN SDGs and building a more inclusive and climate-resilient future for all.
The main objectives of the Orange Bond Initiative are to build a gender-empowered financing system and mobilize new sources of capital for women’s empowerment by using capital in a way that values women and girls as solutions for a future. more resilient green.
The Singapore-based Impact Investment Exchange (IIX) is expected to issue the first Orange Bond in the last quarter of 2022.
It is expected to unlock $10 billion to invest in gender lenses by 2030.
Among others, the key founders of the Orange Bond Initiative are the Australian Department of Foreign Affairs and Trade (DFAT), the United Nations Capital Development Fund (UNCDF), and global asset manager Nuveen.