ABSTRACT
In this chapter, we set out in broad terms what social finance is, where it emerged from and why it is needed. Social finance, in its simplest sense, refers to the provision of capital through market and nonmarket institutions, initiatives and financial mechanisms for social and/or environmental returns alone or alongside financial returns. The origins of social finance, which is often considered a modern and innovative development, have roots in informal initiatives and more formal institutions and funds that have existed for centuries to serve the needs of those worse off in society. Social finance is a way of doing finance that responds to market failures – information asymmetries and externalities – and government's concern for efficiency. This chapter provides the basis from which to move into new territory: exploration of the role of different forms of social finance in responding to specific global health challenges.
