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Current sanitation financing falls far short of the amount required to meet the MDG. Add to this the global financial crisis and the push to reduce public debt levels in rich nations, and the picture gets worse. Clearly, additional forms of financing - in particular those that put private capital to work for social purposes - must be brought to bear if the world is to address the sanitation challenge effectively.
Against this backdrop, impact investing and social finance are poised to play a more central role. WSFF is examining the appropriateness of traditional and emerging market-based financing mechanisms - among them loan equity, mortgage financing, Advance Market Commitments, Social Impact Bonds, microfinance, microcredit, base-of-the-pyramid investing, and social investment banking - in an effort to leverage the widening pool of private capital now available for advancing social causes. A major catalyst is the emergence of new legal mechanisms such as the L3C, which enables foundations to unlock substantial for-profit investment capital in the form of mission related investment (MRI) and program related investment (PRI).
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