Development Impact Bonds (DIBs) are a performance-based investment instrument intended to finance development programmes in low resource countries, which are built off the model of social impact bond (SIB) model. The first social impact bond was originated by Social Finance UK in 2010, supported by the Rockefeller Foundation, structured to reduce recidivism among inmates from Peterborough Prison.
Based on the SIB model, a DIB creates a contract between private investors and donors or governments who have agreed upon a shared development goal. Investors advance fund development programmes with financial returns linked to verified development goals.
In 2012, Instiglio became the first specialized intermediary founded to adapt development impact bonds and social impact bonds to the unique challenges of low and middle-income countries.
In June 2014, Instiglio, Children's Investment Fund Foundation (CIFF), Educate Girls, IDinsight and UBS Optimus Foundation launched the first Development Impact Bond. The objective of the DIB is to reduce the gender gap in education in Rural India by getting girls into school and learning. UBS is providing an investment to an Indian NGO, Educate Girls. After three years, CIFF (the outcome payer) will pay based on enrollment and learning outcomes that IDinsight will evaluate in three RCTs at Years One, Two, and Three. UBS Optimus Foundation stands to receive their initial investment back plus a return on investment based on the performance of the program.
In 2014, GRM Futures Group hosted a conference on rapidly expanding the use of DIBs in developing countries.
The Center for Global Development (CG Dev) hosts a working group and has publications on DIBs.