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By Tova Cohen
TEL AVIV, March 14 Some 2,250 Israelis at risk
of Type 2 diabetes will be helped to make lifestyle changes that
could prevent the disease developing under a pioneering scheme
to be financed by private investors.
If the interventions are successful in preventing the onset
of diabetes, two Israeli public health organisations and the
National Insurance Institute will repay the investors from
savings made by reducing healthcare and disability costs.
To fund the trial, Social Finance Israel, which describes
its activities as a hybrid of philanthropy and investment, and
partner UBS will sell a $5.5 million social impact bond
-- the first related to diabetes prevention -- to foreign and
Caroline Anstey, Head of UBS and Society, a global
initiative launched by the Swiss investment bank in 2014 which
covers activities in sustainable investing and philanthropy,
told Reuters on Monday the Israeli bond will serve as a pilot.
Countries such as Mexico and India have expressed interest in
Type 2 diabetes -- a condition that causes a person's blood
sugar level to become too high -- affects over 500,000 people in
Israel and 415 million people globally. The International
Diabetes Federation predicts the number could grow by 50 percent
in the next 25 years although Type 2's association with factors
such as obesity mean its onset is often preventable.
Pre-diabetics can be identified through blood tests, and
introducing exercise and changes in diet can reduce their risks
of developing diabetes.
Yaron Neudorfer, CEO of Social Finance Israel, said that, if
the pilot is successful, the Israeli health system will be able
to extend diabetes prevention measures to many more people.
The programme will be launched in July for three cohorts of
people identified as having a high diabetes risk. First results
will be measured three years after the first cohort begins the
Ronald Cohen, chair of a global steering group on social
impact investing, said 54 social impact bonds are operating in
12 countries since the first launch in 2010. Most investors in
such bonds are philanthropic organisations and entrepreneurs.
Funders of social impact bonds provide upfront capital to
deliver social services, and governmental entities pay only if
predefined results are achieved.
Cohen told a news conference he believes impact investment
will eventually overtake investment in private equity and
venture capital "because there is such a great need for this".
Last year, Social Finance Israel launched a social impact
bond that will finance mentoring and support for computer
science students with the aim of reducing the number who drop
out of education.
(Editing by Catherine Evans)