‭ hat‬‭is‬‭Blended‬‭Finance?‬‭.............................................

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‭Ensuring Optimal Nutrition of Children through Social‬
‭Impact‬‭Bond‬‭of‬‭Providing‬‭Breakfast‬‭..............................‬‭3‬
‭Revolutionizing‬‭Eye‬‭Care‬‭with‬‭Cataract‬‭Surgery‬‭Bond‬‭....‬‭7‬
‭Revolutionizing Menstrual Health and Hygiene through‬
‭Impact‬‭Bond‬‭in‬‭Delhi‬‭...................................................‬‭10‬
‭What is Blended Finance?‬

‭ n innovative approach that combines development finance, philanthropy, and private capital to‬
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‭finance projects with significant social impact, especially in the healthcare sector. By blending‬
‭concessional funds with private investments, this model mitigates investment risks, enhances‬
‭project viability, and fosters sustainable development outcomes. Blended finance holds immense‬
‭potential in fostering more resilient, equitable, and sustainable healthcare systems.‬

‭Critical Attributes of Blended Finance:‬

‭●‬ L
‭ everage:‬‭Use of development finance and philanthropic‬‭funds to attract private capital‬
‭into deals‬

‭●‬ ‭Impact:‬‭Investments that promote social, environmental,‬‭and economic progress.‬

‭●‬ R
‭ eturns:‬‭Private investors can expect financial returns‬‭in line with market expectations,‬
‭based on both real and perceived risks.‬

‭SWOT Analysis of Using Blended Finance in Healthcare‬

‭ he United Nations has highlighted a funding gap of‬‭$3.9 trillion‬‭for achieving the Sustainable‬
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‭Development Goals (SDGs) by 2030. Current public, private, and philanthropic funding levels‬
‭only cover $1.4 trillion, leaving a $2.5 trillion gap. Blended finance is a crucial tool to bridge this‬
‭gap by combining resources from public, private, and philanthropic sectors.‬

‭ nsuring Optimal Nutrition of Children through Social Impact Bond of‬

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‭Providing Breakfast‬

‭❖‬ ‭Gaps:‬‭Over‬‭33 lakh children‬‭in India suffer from malnutrition,‬‭with more than half‬
f‭ alling into the severely malnourished category. Since 2015, there has been no significant‬
‭improvement in the percentage of children under five‬‭who are stunted‬‭(Short for Age) as‬
‭defined by the World Health Organization standards. Despite numerous programs and‬
‭initiatives, India's efforts to reduce child malnutrition have not yielded the desired results‬
‭over the past five years.‬

‭ rgent attention is needed to address the challenges of weak implementation of‬

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‭government schemes, insufficient investment in health and other critical sectors, as well‬
‭as issues related to unsafe water, and inadequate sanitation and hygiene. Despite decades‬
‭of investment aimed at addressing this issue, India's‬‭child malnutrition rates‬‭remain‬
‭among the most alarming globally. India ranks 94th out of 107 countries according to‬
‭global hunger index.‬
‭ hild and maternal malnutrition stand as a significant challenge, contributing to 15% of‬
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‭India's overall disease burden. Research indicates that investing $1 (equivalent to Rs‬
‭75.08) in nutritional interventions in India could yield public economic returns ranging‬
‭from $3‬‭4.1 to $38.6, surpassing the global average‬‭by threefold‬‭. Studies indicate that‬
‭India faces substantial economic losses due to child malnutrition, amounting to up to 4%‬
‭of its gross domestic product (GDP) and up to 8% of its productivity.‬

‭ espite improvements in child safety in India, malnutrition remains a significant‬

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‭contributor to child mortality,‬‭accounting for 68%‬‭of such deaths. Addressing both‬
‭undernutrition and overnutrition can play a crucial role in reducing this alarming statistic.‬

I‭ t's also concerning that 52% of pregnant women and 67% of children under five are‬
‭anaemic, according to NFHS-5 data. Addressing malnutrition comprehensively is‬
‭essential to ensure the health and well-being of both current and future generations.‬
‭Research indicates that as much as‬‭half of global‬‭cases of undernutriti‬‭on can be linked to‬
‭inadequate WASH facilities and poor environmental conditions (WHO, 2008).‬‭In the‬
‭Union budget for 2021-22, while total allocations saw a 14.5% increase, there was a‬
‭concerning‬‭18.5% decrease‬‭in the allocation towards‬‭child nutrition compared to the‬
‭previous fiscal year (2020-21).‬
‭ ctivities:‬‭Our goal is to provide nutritious meals to children for breakfast, which will be‬
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‭achieved through a Social Impact Bond. We plan to partner with existing government‬
‭initiatives to tap into established infrastructure and resources. We will ensure strict‬
‭adherence to hygiene standards and provide children with diverse nutrient-rich foods.‬
‭Collaborating with schools allows us to regulate the quality and quantity of food. Our‬
‭menus will include vegetables, whole grains, and lean proteins, providing a balanced diet‬
‭for children's growth and development. Offering breakfast will give a child almost 14‬
‭grams of protein and 400 calories per day. Children will receive 50 grams of cereal, 15‬
‭grams of dal, and local vegetables per day, 150 grams of cooked food, and 60 grams of‬
‭sambar with vegetables (This can be changed depending on the state). The primary‬
‭objective is to improve children's health and reduce malnutrition.‬

‭ utcomes:‬‭This project aims to enhance children's‬‭health and growth by promoting‬

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‭better nutrition, which leads to better academic performance, improved school‬
‭attendance, and sustainable enhancements in dietary habits and food security in the‬
‭community. Parents from low-income backgrounds are motivated to send their children to‬
‭school by providing meals, reducing child labor rates. The breakfast program will ease‬
‭the burden on working mothers and improve attendance and retention of children in‬
‭schools. Ultimately, the project will result in long-term benefits for children's physical‬
‭and cognitive development, reducing healthcare costs.‬

I‭ nputs:‬‭The Optimal Nutrition through Social Impact‬‭Bond for Children program‬

‭requires various inputs for maximum effectiveness. Financial resources are necessary to‬
‭cover upfront capital, operational expenses, and outcome payments. Additionally,‬
‭providing nutrient-rich food, nutritional supplements, and access to healthcare services is‬
‭essential. Caregivers and community health workers need education and training‬
‭programs, and robust monitoring and evaluation tools must be in place.‬

‭ usiness Model for the Program:‬‭We plan to use a Results-based‬‭Social Impact Bond‬
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‭to improve children's nutrition. This bond works by having an initial funder, such as a‬
‭development organization like USAID or a grant-making organization, provide the‬
‭working capital so the service providers can start their work. Local non-governmental‬
‭organizations in the area will deliver interventions to prepare the meals (at the school‬
‭premises or off-site, depending on the school's infrastructure). Suppose the predetermined‬
‭targets are met, such as maintaining the children's weight, increasing their height, and‬
‭school enrollment. In that case, the outcome payers will pay back the original amount‬
‭invested plus additional returns to the investor. The project will last 4 years, and‬
‭independent verifiers will assess progress regularly. The program's success will be‬
‭measured through various metrics, including improvements in children's nutritional‬
‭status, weight-for-age, height-for-age, and academic performance indicators such as‬
‭attendance and grades. Additionally, the program will focus on reducing malnutrition‬
r‭ ates and anemia, promoting dietary diversity, and increasing levels of community‬
‭engagement.‬

‭ his results-based social impact bond model works as - investors will fund healthy food‬
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‭for children. Implementers will ensure that the schools have the necessary facilities to‬
‭provide nutritious food to the children. Verifiers will then verify whether the goals set‬
‭have been achieved or not. Finally, outcome funders will pay the investors only after‬
‭verifiers have confirmed that the outcomes have been achieved.‬

I‭ t is crucial to offer investors competitive interest rates or rates of return while ensuring‬
‭the program's financial sustainability. The program should have an exit strategy for‬
‭investors and mechanisms to continue successful interventions beyond the SIB‬
‭period.Integrating the program into existing health and education systems will make it‬
‭sustainable and benefit other parts of the particular state after the investor's exit. This will‬
‭provide the sustained impact and long-term benefits of children's nutrition in India.‬

‭ y designing a robust financial structure in this manner, the SIB program can effectively‬
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‭mobilize private capital, align incentives, and deliver tangible improvements in child‬
‭nutrition outcomes.To strengthen stakeholder engagement, we will ensure inclusive‬
‭representation, maintain transparent communication, and actively seek input and‬
‭feedback. Build partnerships with local organizations.‬

‭ hy Use Blended Finance:‬‭Poor food quality is a significant‬‭problem in government‬

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‭schools, with food contamination and poor hygienic practices resulting in student deaths.‬
‭Corruption is also an issue, with funds being diverted from the program. The Comptroller‬
‭and Auditor General of India found funds meant to provide meals to children were‬
‭diverted towards another scheme. A survey found that despite most schools having‬
‭facilities to operate a mid-day meal scheme, food was only served a few days a week in‬
‭some cases, and the food quality could have been better. Blended finance, involving‬
‭private investors, ensures robust financial oversight and accountability, deterring‬
‭corruption effectively. Private investors' market discipline drives efficient resource‬
‭allocation and adherence to quality standards, while performance-based financing‬
‭incentivizes results, reducing corruption risk. Leveraging private sector expertise fosters‬
‭innovation and efficiency, enhancing food quality and program effectiveness.‬

‭ arriers and risks:‬‭The program may encounter barriers‬‭such as funding limitations,‬

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‭access challenges in marginalized communities, cultural and dietary factors affecting‬
‭intervention acceptance, inadequate healthcare infrastructure, sustainability concerns,‬
‭data limitations, and external disruptions. To mitigate these risks, strategies include‬
 d‭ iversifying funding, prioritizing community engagement, strengthening health‬
‭infrastructure, establishing robust monitoring systems, and fostering partnerships‬

‭Revolutionizing Eye Care with Cataract Surgery Bond‬

‭❖‬ ‭Gaps:‬ ‭In India, the prevalence of blindness and vision‬‭impairments is staggering, with‬
a‭ pproximately‬‭4.95 million‬‭individuals classified‬‭as blind and an additional 70 million‬
‭coping with varying degrees of visual impairment. Among this population, a notable‬
‭proportion includes 0.24 million blind children, highlighting the significant impact on the‬
‭younger generation. The economic ramifications of such widespread visual impairments‬
‭are substantial, with an estimated loss of productivity amounting to a staggering‬‭INR 646‬
‭billion‬‭(Int$ 29.4 billion). This economic toll primarily‬‭arises from the reduction in‬
‭productivity associated with avoidable blindness.‬

‭ he root causes of this economic burden are multifaceted. Avoidable blindness decreases‬
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‭the likelihood of individuals entering the‬‭workforce‬‭by 30%‬‭and diminishes the‬
‭productivity of those who remain employed by 20%. These statistics underscore the‬
‭critical link between visual health and economic prosperity, emphasizing the need for‬
‭comprehensive interventions to address the underlying factors contributing to vision loss.‬

‭ midst these challenges lies a glimmer of hope. Studies have shown that cataract surgery‬
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‭can yield significant economic and social benefits.‬‭85% of men‬‭and 58% of women who‬
‭had lost their jobs due to blindness regained employment following cataract surgery. The‬
‭economic impact of this intervention cannot be overstated, with each individual who‬
‭regained functional vision through cataract surgery generating economic productivity‬
‭equivalent to 1,500% of the surgery cost during the first year post-surgery.‬
‭ pproximately 771 million people worldwide suffer from avoidable vision loss,‬
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‭accounting for up to 90% of all cases. Shockingly, a PricewaterhouseCoopers report‬
‭revealed that an annual investment of just‬‭USD 2.20‬‭per person‬‭between 2011 and 2020‬
‭in low- and middle-income countries could have completely eradicated this preventable‬
‭blindness.‬

‭ oor vision challenges individuals, especially those from low-income backgrounds,‬

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‭affecting their education and social lives. Limited access to vision care services‬
‭exacerbates academic struggles, hindering students' ability to learn and participate fully‬
‭in classroom activities. By investing in comprehensive vision care services and‬
‭promoting initiatives that improve access to treatment, nations can unlock significant‬
‭economic potential while simultaneously enhancing the well-being and quality of life for‬
‭millions of individuals worldwide.‬

‭ ctivities:‬‭The program will be structured as a‬‭Cataract‬‭Surgery Bond. The Cataract‬

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‭Surgery Bond's primary goal is to increase access to cataract surgery, which can restore‬
‭clear vision by removing cloudy lenses. The bond aims to provide low-cost eye surgeries‬
‭for middle-income patients and free surgeries for low-income patients.‬

‭ utcomes:‬‭The cataract surgery program will increase‬‭surgeries, improve vision‬

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‭outcomes, enhance healthcare capacity, raise awareness, shorten waiting times and‬
‭improve‬‭skilled‬‭skills of health‬‭personnel‬‭s‭,‬ strengthen‬‭supply chains, decrease vision‬
‭impairment burden, better quality of life for patients, and improve collaboration among‬
‭stakeholders. This surgery bond can help improve eye health outcomes and reduce‬
‭backlogs while generating financial returns for investors. Clear vision will enhance the‬
‭quality of life for the individual. They can engage in activities such as working, reading,‬
‭cooking, and confidently moving around. It aligns with two Sustainable Development‬
‭Goals (SDGs): SDG 1 - No Poverty and SDG 3 - Good Health and Well-being.‬

I‭ nputs:‬‭The cataract surgery program requires financial‬‭resources for equipment and‬

‭personnel, trained healthcare professionals, well-equipped surgical facilities, medical‬
‭supplies, outreach campaigns, transportation support, data monitoring systems,‬
‭partnerships with stakeholders, training programs, and community engagement efforts.‬
‭These inputs are essential for delivering high-quality care and improving patient vision‬
‭outcomes.‬

‭ usiness Model of the Bond:‬‭The Social Impact Bond‬‭(SIB) comprises four‬

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‭components: an outcome funder, a service provider, a target population, and a validating‬
‭agency. It involves investors and intermediaries to support intervention delivery. The‬
‭Cataract Bond is designed to provide financial support for operational expenses related to‬
c‭ ataract treatment. This includes funding for cataract-related equipment, consumables,‬
‭and activities. A foundation or developmental organization will be the bond's primary‬
‭outcome funder, covering a significant portion of the investor's debt if the intervention is‬
‭successful (70%). Organizations that want to prevent and treat avoidable blindness can‬
‭cover approximately 30% each. Tata Capital's Initiative has recently been investing in‬
‭improving eye care among poor people.‬

‭ his project will receive upfront financing from a development finance institution and a‬
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‭diverse coalition of partners, including outcome funders who will repay investors upon‬
‭meeting performance goals such as reducing the waiting time for surgeries by 25% to‬
‭30% or increasing the percentage of surgeries conducted successfully by 40%. The bond's‬
‭pay-for-performance loan funding contributes to comprehensive, high-quality, affordable‬
‭eye care procedures, including outreach and awareness building, diagnosis, hospital‬
‭transport, and surgery patients' follow-up care.‬

‭ he implementing partner will use the funds to‬‭perform‬‭surgeries,‬‭purchase eyeglasses,‬

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‭organize vision screening camps, and cover logistics costs. As beneficiaries receive‬
‭eyeglasses, the implementing partner tracks the program's impact, including‬
‭improvements in vision and any challenges faced. A portion of the funds is held in‬
‭reserve to guarantee the program's social impact. If predefined impact metrics are not‬
‭met, the implementing partner may be required to repay a portion of the investment to‬
‭investors. If the impact metrics are achieved, the funds are disbursed to the implementing‬
‭partner, who can use them to expand the program or sustain its operations. Regular‬
‭monitoring and evaluation are conducted throughout the process to assess the program's‬
‭effectiveness and make any necessary adjustments. By structuring the initiative this way,‬
‭we ensure that investors have a mechanism to ensure their capital generates social impact.‬
‭At the same time, beneficiaries receive much-needed eyeglasses to improve their quality‬
‭of life.‬

‭ his initiative plans to dedicate a portion of its proceeds towards training programs for‬
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‭ophthalmic surgeons and healthcare staff. The aim is to improve surgical capacity and‬
‭quality. Regular audits and impact assessments will be conducted to ensure compliance‬
‭with bond covenants and alignment with project objectives. The Cataract Bond initiative‬
‭aims to leverage private capital, strengthen healthcare infrastructure, and improve access‬
‭to quality eye care services for underserved populations in India. This will aid the‬
‭government in achieving universal health coverage and reducing the burden of‬
‭preventable blindness.‬

‭ ngaging key stakeholders early in a project can enhance buy-in, sustainability, and‬
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‭impact. Clear communication and transparency are critical. Formalizing partnerships with‬
‭agreements and inclusive decision-making are also essential.‬
 ‭ hy use Blended Finance:‬ ‭Healthcare in India is facing chronic underfunding, which‬
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‭has led to a situation where many people are unable to access the medical care they need.‬
‭The Ayushman Bharat health insurance scheme was introduced to help rural families and‬
‭certain urban occupational groups, but it has not been successful in reducing‬
‭out-of-pocket healthcare‬‭expenses or significantly‬‭increasing hospital care usage.‬
‭Previous publicly funded health insurance programs have also faced similar‬
‭shortcomings.‬

I‭ ndia currently has a‬‭backlog‬‭of 1.02 crore cataract‬‭surgeries, and‬‭millions of people‬‭are‬

‭suffering from vision loss. Funding for these eye surgeries and post-operative care cannot‬
‭be met by government funding alone. The social impact bond is a new approach that‬
‭seeks to bring together different funders in the eye care sector to work towards a common‬
‭goal, collaborating in a new capacity.‬

‭ arriers and Risk:‬‭Operational risks like supply chain‬‭disruptions can be managed‬

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‭through strong logistics planning and local partnerships. Diversifying funding sources‬
‭can help mitigate financial risks, while continuous training and quality control measures‬
‭address technical risks. Community awareness campaigns and engagement with local‬
‭leaders can help overcome social barriers.‬

‭ evolutionizing Menstrual Health and Hygiene through Impact Bond in‬

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‭Delhi‬

‭ aps:‬‭Each year,‬‭23 million girls‬‭drop out of school‬‭due to a lack of proper menstrual‬

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‭hygiene management facilities, including the availability of sanitary pads and information‬
‭about menstruation. This affects their confidence and ability to attend school or work in‬
‭appropriate conditions. According to a recent study in Delhi,‬‭40% of girls‬‭missed school‬
‭during menstruation, linked to factors like menstrual product type, privacy issues,‬
‭restrictions, maternal education, and information sources.‬
‭ dditionally, 65% reported menstrual challenges affecting their school activities, causing‬
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‭missed tests and classes due to pain, anxiety, embarrassment, leakage fear, and uniform‬
‭stains. Figures from the National Family Health Survey (NFHS) report published in May,‬
‭about half of all‬‭women aged 15-24‬‭in India still‬‭use cloth for menstrual protection,‬
‭which can lead to multiple infections if reused. This is attributed to a lack of awareness‬
‭and the existence of a taboo surrounding menstruation. Menstrual-related issues among‬
‭adolescent girls in India are a significant concern, affecting physical, mental, social, and‬
‭psychological dimensions. These disorders impact daily lives and require comprehensive‬
‭attention and intervention strategies.‬‭Inadequate‬‭menstrual hygiene directly or indirectly‬
‭affects the achievement of Sustainable Development Goals (SDGs) 3, 4, 5, and 6, which‬
‭are crucial for the overall development of young adolescents and the nation.‬

‭ ctivities:‬‭The program will be structured as an impact‬‭bond. We aim to provide‬

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‭low-cost disposable sanitary pads and focus on improving water, sanitation, and hygiene‬
‭in government schools, meeting different needs and capacities to pay. We will also‬
‭provide information about menstruation to girls through workshops, educational sessions,‬
‭and peer education programs. A study in India found that almost 50,000 out of 100000‬
‭adolescent girls were not aware of menstruation until they experienced it. Additionally,‬
‭we plan to engage parents and community leaders to keep sanitary pad dispensers at‬
‭school. The Pradhan Mantri Bhartiya Janaushdhi Pariyojna provides sanitary napkins at a‬
‭minimum cost of Re 1 per pad; however, it is unavailable in most schools. Parents must‬
‭understand the significance of using napkins for their daughters' health.‬

I‭ nputs:‬‭Adequate financial resources, access to quality‬‭menstrual hygiene products,‬

‭educational materials, comprehensive training programs, robust monitoring and‬
‭evaluation tools, advocacy and awareness campaigns, and partnerships are essential for‬
‭ensuring the success and sustainability of menstrual health initiatives.‬

‭ utcome:‬‭The expected outcome of the program is to‬‭demonstrate measurable‬

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‭improvements in practices, such as the amount of menstrual products used and a decrease‬
‭in absenteeism in schools and a change in the behavior of community towards‬
‭menstruation‬

‭ usiness Model for the Program:‬‭The program will be‬‭structured as an impact bond,‬
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‭with a social investor such as Asha Impact‬‭(Asha Ventures)‬ ‭providing upfront capital and‬
‭an organization such as the French Development Agency acting as the outcome funder.‬
‭The outcome payer sets the target outcomes, such as the number of menstrual products‬
‭used and decreased absenteeism in schools, and determines the price they are willing to‬
‭pay per outcome based on the expected impact of the intervention and baseline data.‬

‭ he investor provides the upfront capital to the service providers and bears the‬
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‭performance risk. An independent evaluator uses a rigorous methodology to measure the‬
o‭ utcomes achieved by the service providers. Based on the outcomes achieved, the‬
‭outcome payer pays the investor a return, which can be higher or lower than the initial‬
‭investment.‬

‭ e will also work with on-ground implementing partners and independent evaluators to‬
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‭assess the impact and progress of SIBs. The duration of the project will be two years.‬
‭SIBs focus on outcomes, using evaluation to measure results. They transfer risks to social‬
‭investors and incentivize service providers to perform better. In addition to external‬
‭funding sources, revenue generated within the program itself can also contribute to‬
‭paying the investor, for example, income from product sales.‬

I‭ mportant indicators to measure progress towards menstrual health and hygiene (MHH)‬
‭include increased mobility of women and girls during their periods‬‭and‬‭improved‬
‭awareness of communities about menstruation‬‭,‬‭which‬‭will be measured through surveys,‬
‭focus group discussions, observational studies, interviews with key informants, indirect‬
‭measures like product sales, comparative analysis of data before and after project‬
‭implementation, increased access to MHH products and services for women and girls,‬
‭percentage of schools with facilities that support MHH‬‭, and percentage of vouchers‬
‭redeemed for reusable sanitary pads.‬‭.‬‭We plan to‬‭initiate the program in government‬
‭middle schools located in Delhi.‬

‭ e will Develop culturally sensitive data collection tools and integrate them into the‬
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‭program's monitoring framework. Train staff and engage stakeholders in data collection.‬
‭Regularly review and adapt indicators based on feedback and emerging evidence.‬

‭ hy Use Blended Finance:‬‭India is home to 375 million‬‭menstruating individuals. Yet,‬

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‭providing access to sanitary pads is a significant challenge due to the high costs involved.‬
‭While the government is committed to tackling this issue, it cannot bear the financial‬
‭burden alone. The government must work with other partners to share the cost and bring‬
‭private expertise to make this a reality. A blended finance program would be an ideal‬
‭solution.‬

I‭ ndia made tampons and sanitary napkins tax-free, but‬‭the cost of most sanitary pads‬
‭ranges‬‭most sanitary pads range‬‭from 5 to 12 rupees‬‭per pad, making them unaffordable‬
‭for millions living near the poverty line. In fact, according to the National Family Health‬
‭Survey 2015-2016, only 36% of women in India use sanitary pads. It is crucial that the‬
‭government and its partners work together to make sanitary pads accessible and‬
‭affordable for all. This will‬‭not only improve hygiene‬‭and health but also‬‭improve hygiene‬
‭and health and‬‭promote gender equality, which is essential‬‭for the nation's overall‬
‭development.‬
 ‭ arriers and Risks:‬‭Barriers like cultural stigma, access challenges, financial‬
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‭constraints, supply chain disruptions, and behavior change resistance could hinder the‬
‭project. Solutions include community engagement to challenge stigma, targeted outreach‬
‭for marginalized populations, subsidized products for affordability, strengthened supply‬
‭chains, and comprehensive education on menstrual health‬

‭ arious blended finance tools can be used for different programs in different countries, such as‬
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‭debt buy-downs for buying loans from the International Development Association and loan‬
‭guarantees. Building local manufacturing capacity is crucial, especially for innovative‬
‭technologies, and can be achieved through catalytic grants, technical assistance, and bridge‬
‭funding. Expanding the reach of innovative products and technologies to new markets can be‬
‭achieved through concessional capital, interest subvention, and partial credit guarantee. At the‬
‭same time, social success notes can incentivize impact and create financial discipline.‬
‭Developing low-cost point-of-care diagnostic devices can be supported through collateral-free‬
‭capital, interest subvention, and results-based financing. Finally, low-cost integrated‬
‭telemedicine services can be developed through concessional debt, outcome-linked debt‬
‭instruments, convertible debt, and subordinate equity.‬

‭Ensuring Optimal Nutrition through Social Impact Bond for Children‬

‭❖‬ ‭Gaps:‬‭Over‬‭33 lakh children‬‭in India suffer from malnutrition,‬‭with more than half‬
f‭ alling into the severely malnourished category. Since 2015, there has been no significant‬
‭improvement in the percentage of children under five‬‭who are stunted‬‭(Short for Age) as‬
‭defined by the World Health Organization standards. Despite numerous programs and‬
‭initiatives, India's efforts to reduce child malnutrition have not yielded the desired results‬
‭over the past five years.‬

‭ rgent attention is needed to address the challenges of weak implementation of‬

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‭government schemes, insufficient investment in health and other critical sectors, as well‬
‭as issues related to unsafe water, and inadequate sanitation and hygiene. Despite decades‬
‭of investment aimed at addressing this issue, India's‬‭child malnutrition rates‬‭remain‬
a‭ mong the most alarming globally. India ranks 94th out of 107 countries according to‬
‭global hunger index.‬

‭ hild and maternal malnutrition stand as a significant challenge, contributing to 15% of‬
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‭India's overall disease burden. Research indicates that investing $1 (equivalent to Rs‬
‭75.08) in nutritional interventions in India could yield public economic returns ranging‬
‭from $3‬‭4.1 to $38.6, surpassing the global average‬‭by threefold‬‭. Studies indicate that‬
‭India faces substantial economic losses due to child malnutrition, amounting to up to 4%‬
‭of its gross domestic product (GDP) and up to 8% of its productivity.‬

‭ espite improvements in child safety in India, malnutrition remains a significant‬

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‭contributor to child mortality,‬‭accounting for 68%‬‭of such deaths. Addressing both‬
‭undernutrition and overnutrition can play a crucial role in reducing this alarming statistic.‬

I‭ t's also concerning that 52% of pregnant women and 67% of children under five are‬
‭anaemic, according to NFHS-5 data. Addressing malnutrition comprehensively is‬
‭essential to ensure the health and well-being of both current and future generations.‬
‭Research indicates that as much as‬‭half of global‬‭cases of undernutriti‬‭on can be linked to‬
‭inadequate WASH facilities and poor environmental conditions (WHO, 2008).‬‭In the‬
‭ nion budget for 2021-22, while total allocations saw a 14.5% increase, there was a‬
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‭concerning‬‭18.5% decrease‬‭in the allocation towards‬‭child nutrition compared to the‬
‭previous fiscal year (2020-21).‬

‭ ctivities:‬‭Our goal is to provide nutritious meals‬‭to children, which will be achieved‬

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‭through a Social Impact Bond. We plan to partner with existing government initiatives,‬
‭such as the Mid-Day Meal Scheme, to allow us to tap into established infrastructure and‬
‭resources. We will ensure strict adherence to hygiene standards and provide children with‬
‭diverse nutrient-rich foods. Our menus will include vegetables, whole grains, and lean‬
‭proteins, providing a balanced diet for children's growth and development. The primary‬
‭objective is to improve children's health and reduce malnutrition.‬

‭ utcomes:‬‭The project aims to improve the health and‬‭growth of children by promoting‬

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‭better nutrition. This leads to better school attendance and academic performance, as well‬
‭as sustainable improvements in dietary habits and food security in the community. The‬
‭project ultimately results in long-term benefits for children's physical and cognitive‬
‭development, reducing healthcare costs.‬

‭ usiness Model for the Program:‬‭We plan to use a Results-based‬‭Social Impact Bond‬
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‭to improve children's nutrition. This bond works by having an initial funder, such as a‬
‭development organization like USAID or a grant-making organization, provide the‬
‭working capital so the service providers can start their work. Local non-governmental‬
‭organizations that are active in the area will deliver the interventions. Suppose the‬
‭predetermined targets are met, such as maintaining the children's weight, increasing their‬
‭height, and school enrollment. In that case, the outcome payers will pay back the original‬
‭amount invested plus additional returns to the investor. During the four-year program,‬
‭independent verifiers will regularly assess progress. The success of the impact bond will‬
‭be measured by improvements in nutritional outcomes and educational performance‬
‭among school children, cost-effectiveness of program delivery, stakeholder satisfaction,‬
‭and the social return on investment.‬

I‭ n this model, investors will provide funding for providing healthy food to children.‬
‭Implementers will ensure that the schools have the necessary facilities to provide‬
‭nutritious food to the children. Verifiers will then verify whether the goals set have been‬
‭achieved or not. Finally, outcome funders will pay the investors only after verifiers have‬
‭confirmed that the outcomes have been achieved.‬
 ‭ he program's success relies on measuring various metrics, including improvements in‬
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‭nutritional outcomes, educational performance, health and growth indicators, dietary‬
‭diversity, community engagement levels, cost-effectiveness, and sustainability. These‬
‭metrics collectively assess the program's impact on children's well-being and the‬
‭effectiveness of its interventions in addressing nutritional challenges. Tracking these‬
‭indicators allows for informed decision-making and continuous improvement to‬
‭maximize the program's benefits for children and communities.‬

‭ hy Use Blended Finance:‬‭Blended finance is ideal‬‭for funding social impact bonds to‬
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‭provide nutritious food for school children due to its ability to maximize impact, bridge‬
‭funding gaps, enhance efficiency through private sector expertise, catalyze additional‬
‭investment, and promote long-term sustainability. This approach leverages both public‬
‭and private resources, ensuring a more significant and sustainable impact on children's‬
‭health and well-being.‬

‭ arriers:‬‭Barriers like financial constraints, infrastructure‬‭challenges, cultural‬

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‭differences, accessibility issues, staffing shortages, regulatory compliance, community‬
‭engagement, and long-term funding can be addressed through diverse funding sources,‬
‭infrastructure investments, culturally sensitive menu planning, community-based‬
‭distribution, comprehensive staff training, regulatory compliance measures, strong‬
‭community partnerships, and sustainable funding strategies.‬

‭❖‬ ‭How to Structure the Program:‬‭A Social Impact Bond‬‭(SIB) program for child‬
n‭ utrition in India requires financial structure that aligns the interests of investors, service‬
‭providers, and the government while ensuring measurable impact. This structure would‬
‭involve defining specific outcome metrics related to child nutrition, such as reductions in‬
‭child stunting rates or improvements in dietary diversity. These metrics serve as the basis‬
‭for determining investor returns, with payments made by the government or another‬
‭outcome payer contingent upon achieving predefined targets.‬

‭ e must assess the total upfront capital costs and ongoing operational expenses to ensure‬
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‭sufficient funds for the program. We will structure the investor financing to cover these‬
‭costs, with returns tied to success in achieving outcome targets. We will establish a clear‬
‭payment schedule to manage risks and give investors’ confidence in the program's‬
‭progress. To ensure proper financial management and governance, an Impact Investment‬
‭Fund or a Special Purpose Vehicle (SPV) would be established to act as an intermediary‬
‭entity. This body would be responsible for receiving investor funds, disbursing payments‬
‭to service providers, and overseeing the overall financial flow of the SIB program.‬
 ‭ oreover, securing a commitment from the government or another outcome payer to‬
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‭fund the program based on the achieved outcomes is crucial.‬

‭ inancial guarantees or insurance mechanisms may be explored to mitigate risks to‬

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‭encourage investors to participate in the program and provide them with additional‬
‭confidence. It is crucial to offer investors competitive interest rates or rates of return‬
‭while ensuring the program's financial sustainability. The program should have an exit‬
‭strategy for investors and mechanisms to continue successful interventions beyond the‬
‭SIB period. This will provide the sustained impact and long-term benefits of children's‬
‭nutrition in India. By designing a robust financial structure in this manner, the SIB‬
‭program can effectively mobilize private capital, align incentives, and deliver tangible‬
‭improvements in child nutrition outcomes.‬

‭❖‬ ‭How can blended finance make a difference:‬‭Blended‬‭finance would benefit a child‬
n‭ utrition initiative because it allows for mobilizing private sector capital alongside public‬
‭and philanthropic funds. This increases the overall pool of resources available, enabling a‬
‭greater scale and impact. Additionally, blended finance encourages innovation, efficiency,‬
‭and risk-sharing among stakeholders. Private sector involvement brings expertise and‬
‭management capabilities, improving the delivery of nutrition interventions. Moreover,‬
‭blended finance models are scalable and sustainable, fostering long-term impact and‬
‭incentivizing the development of innovative solutions to address child malnutrition.‬

‭ everage diverse expertise of collaborators Accurately define outcome measures at the outset‬
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‭Design flexible mechanisms to pivot in realtime Establish a robust learning agenda‬

‭ e will be utilizing a Results-based Social Impact Bond to enhance the nutrition of children. In‬
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‭this impact bond, the initial working capital will be provided by an upfront funder, such as a‬
‭development organization such as USAID, or a grant-making organization, so that the service‬
‭providers can begin their work. Local non-governmental organizations that have a presence on‬
‭the ground will deliver the interventions. If predetermined targets such as maintaining the weight‬
‭of the kids, increase in height, and school enrollment are met, the outcome payers, will pay back‬
t‭he original amount invested plus additional returns to the investor. Throughout the four-year‬
‭program, progress will be assessed regularly by independent verifiers. The success of the impact‬
‭bond will be judged by improvements in nutritional outcomes and educational performance‬
‭among school children, cost-effectiveness of program delivery, stakeholder satisfaction, and the‬
‭social return on investment.‬