Finance for Social Innovation in Emerging Economies and Developing Countries

Among all the actors of the social sector, social entrepreneurs such as non-for-profit organizations, cooperatives, mutual societies, and regular for-profit organizations with social goals and pro-social agendas are those best suited to foster social innovation in emerging economies and developing countries. Development Impact Bonds (DIBs) are outcome-based pay-for-success contracts bringing together governments, investors and social entrepreneurs to foster social innovation in emerging economies and developing countries. The emerging asset class of impact investing comprises a funding instrument specific to emerging economies and developing countries: DIBs. DIBs are outcome-based pay-for-success contracts bringing together governments, investors and social entrepreneurs to foster social innovation in emerging economies and developing countries. The purpose this chapter was to examine how DIBs can foster social innovation in emerging economies and developing countries by subsidising social entrepreneurs. The ability of DIBs to promote social innovation in emerging economies and developing countries is an intriguing topic that could be usefully explored in further research.