IFC Social Bond Framework 


Component 1: Use of Proceeds

Net proceeds from IFC Social Bonds are allocated to a sub-portfolio linked to lending operations for social bond eligible projects. Only the loan portions of projects are eligible for funding via Social Bond proceeds. Equity investments and guarantees are ineligible.

Eligible projects are funded, in whole or in part, by IFC and meet the requirements as stipulated within the Social Bond Principles and/or either IFC’s Banking on Women or Inclusive Business programs (see Box 1).


 Component 2: Evaluation and Selection

In addition to meeting social bond eligibility criteria, all projects financed undergo a rigorous due diligence process. Eligible Projects comply with IFC Performance Standards on Environmental and Social Sustainability and the IFC Corporate Governance Framework. Projects are subject to ongoing monitoring and supervision.


 Component 3: Management of Proceeds

All proceeds from IFC Social Bonds are set aside in a designated Social Cash Account and are invested in accordance with IFC’s conservative liquidity policy until disbursement to Eligible Projects.

The Social Cash Account tracks the difference between the balance of outstanding social bonds and outstanding Eligible Project loans. The Social Cash Account balance decreases as disbursements are made towards Eligible Projects or the social bonds mature and increases as new social bonds are issued or Eligible Projects are repaid. Disbursement requests for Eligible Projects take place in accordance with IFC’s established policies and procedures and are often made over a period of time depending on project milestones.

In some cases, the social-related component of a project supported by social bonds forms part of a larger investment. In such instances, the social bond portfolio only finances the eligible portion of the project. Monitoring and supervision of Eligible Projects comprises regular reports by the investee company on project activities and performance throughout the lifetime of investment.

 IFC is rated triple-A by Standard & Poor and Moody’s. The payment of interest and the principal of the Social Bonds is strictly based on the credit quality of IFC and is not directly affected by the result of the underlying investments that IFC makes.


 Component 4: Reporting

IFC’s Social Bond Impact Report follows best practice and the Social Bond Principles’ guidance for reporting outlined in the report, Working Towards a Harmonized Framework for Impact Reporting for Social Bonds, which aims to ensure integrity of the market through increased transparency.

The report provides a list of projects eligible for funding from social bond proceeds and, subject to confidentiality considerations, provides a brief description of each project, the eligible loan amount and the expected social impact. The report only covers projects eligible for social bond financing.

 Selecting Impact Metrics

For the past decade, IFC and other multilateral and bilateral development institutions have worked to identify common development indicators for investment projects. These efforts led to the Harmonized Indicators for Private Sector Operations, agreed upon by 26 international finance institutions. The indicator list is primarily comprised of sector-level outcome indicators.

To report on the impact of our Social Bond Program, IFC uses many of the sector-specific indicators[1] agreed upon in the HIPSO partnership, incorporating additional indicators as needed. Indicators include: 

 Real Sector

Financial Sector

  • Farmers Reached
  • Number of mobile subscriptions (people reached)
  • Patients Served
  • Power Distribution (people reached)
  • Students Reached
  • Number of outstanding loans to women-owned SMEs[2] 
  • Number of outstanding microfinance loans
  • Number of outstanding housing loans


Identifying Target Populations

IFC’s Social Bond Program targets underserved people who lack access to the basic goods and services that are important aspects of well-being, from women-owned small business owners who lack access to finance, to low-income households that lack access to quality health care and small farmers with no market for their crops. Investments in financial intermediaries ensure that financial services are available to people IFC cannot reach directly, such as micro, small, and medium-sized enterprises.

 As recommended by the Social Bond Principles in the guidance document, Working Towards a Harmonized Framework for Impact Reporting for Social Bonds[3] , the Eligible Project section of this report provides a description of the target population by sector.

 Interpreting Indicators

Wherever possible, IFC strives to quantify impact per sector. Impact may be described qualitatively when indicators are unavailable or cannot be disclosed for confidentiality reasons.

 Impact indicators are tracked on a client-level basis and based on company-reported data. Indicators have not been prorated for the portion of IFC’s contribution.

 Social Bond Program reporting allows for quantification of a core indicator per sector, but it is important to appreciate the limitations of data reported. The main considerations to interpret results are:

  • Scope of results: Reporting is based on ex-ante estimates at the time of project approval and mostly for direct project effects.
  • Uncertainty: An important consideration in estimating impact indicators is that they are often based on a number of assumptions. Actual impact of projects may diverge from initial projections.
  • Comparability: Caution should be taken in comparing projects, sectors or portfolios because baselines (and base years) may vary. In addition, sector and country context should also be taken into consideration.
  • Omissions: Projects may have impact across a much wider range of indicators than captured in the reporting and may have other important development impacts. Furthermore, the core indicator is not applicable for some projects, or the data is not available.


 IFC Access to Information Policy

The Access to Information Policy is the cornerstone of the IFC Sustainability Framework and articulates our commitment to transparency.

We seek to provide accurate and timely information regarding our investment and advisory activities to clients, partners and stakeholders, and we disclose relevant information pertaining to project, environmental and social implications, as well as expected development impact prior to consideration by our Board of Directors.

This commitment applies to projects funded by the Social Bond Program.



[1] The full list of Harmonized Indicators for Private Sector Operations indicators can be found here: https://indicators.ifipartnership.org/indicators/

[2] Number of outstanding loans to Women-owned SMEs is not an indicator of the Harmonized Indicators for Private Sector Operations.