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Impact-linked Finance

Impact-linked Finance

Impact-linked finance is an innovative funding approach that rewards market-based organisations for achieving measurable social or environmental outcomes. Financial incentives are directly linked to the successful delivery of agreed impact, aligning financial returns with positive development results.

Through "better terms for better impact," impact-linked finance rewards enterprises for delivering measurable social and environmental outcomes while supporting sustainable growth.

Impact-linked finance (ILF) is a flexible funding approach that can be applied across financial instruments, including equity, debt, and guarantees. Unlike grants, funding is linked to the achievement of predefined impact metrics, aligning measurable social and environmental outcomes with sustainable business growth.

Key transaction characteristics

Instruments

The ILF instruments available include Social Impact Incentives (SIINC), reimbursable SIINC, ILF loans and impact-ready matching fund.

Ticket size

Depend on a variety of aspects, including growth stage, profitability, investment round, selected ILF instruments, etc. Ticket sizes will be of a maximum of CHF 250’000.

Terms and metrics

Will be defined on a case-by-case basis, but typical ILF transactions last for 2-3 years, with 2-3 enterprise-specific metrics verified every 6 or 12 months.

Impact-linked finance eligibility criteria

  • Sectoral focus: Applying enterprises must be working in the financial inclusion sector.
  • Geographical focus: The enterprises must be active in one of SCBF focus countries.
  • Track record: Enterprises must be operational for at least three years with a customer base of at least 3,000 and associated revenues.
  • Financial sustainability: Enterprises should have achieved financial sustainability - or have a credible path to profitability or break-even-to ensure they continue delivering positive impact beyond the duration of the Impact-Linked Finance transaction.
  • Business model: Although there are no specific constraints regarding the legal form the enterprises need to have a strong business model and generate revenue (and potentially profit) out of their activities.
  • Impact focus: Priority is given to enterprises serving vulnerable and low-income populations, including women, MSMEs, smallholder farmers, and migrants. Enterprises without an existing impact focus may also be eligible if they demonstrate the commitment and capacity to deliver measurable positive social outcomes.
  • Impact track-record: Enterprises should have a track record of measuring and monitoring impact using relevant indicators to support the design of performance-based incentives. High-potential enterprises without established impact measurement systems may be eligible for technical assistance to strengthen their impact management and reporting.
  • B2C: The enterprise needs to have a direct and verifiable influence on the impact being created for end-users. Consequently, B2C business models will be prioritised.

FAQ

Here you can find answer to our frequently asked questions

What types of projects are eligible for funding?
How can my organization apply for a grant?
Is there a specific geographic focus for the projects you fund?
Are there any specific criteria for climate resilience projects?
Can individuals apply for grants, or is it limited to organizations?
Is there any post-grant support or monitoring provided to the funded projects?

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