The new market will allow savers to buy bonds issued by leading charities and receive an income for their loan while investing in a worthy cause.
The scheme, which has the backing of the Government, will be the first time charities have been able to issue bonds directly to ordinary investors.
About 100 UK charities are expected to raise between
Bonds will be issued through a new vehicle called Retail Charity Bonds. They will be listed on the
The first bond is expected to be launched later this month, with Age
Before the financial crisis, such charities were able to borrow cheaply from the banks.
Now borrowing rates have more than doubled and loans have been reduced from around 25 years to nearer five. Retail
The Retail Charity Bonds platform will allow charities to borrow money for seven to ten years, with bond buyers receiving annual interest rates of about 3 to 5 per cent. To keep costs down, lawyers, and banks have given their time for free, saving charities some
The market will also be overseen by an independent board, including a former director of the
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