This module explores key mathematical and statistical concepts essential to social finance, an innovative approach to investment that seeks both financial returns and measurable social and environmental benefits. The module begins with foundational principles of finance and statistics such as the ‘time value of money’, encompassing present value, future value, discount rates, internal rates of return, annuities, perpetuities and bonds.
Subsequently, it focuses on social and development impact bonds, highlighting the importance of statistical tools for measuring social outcomes. Participants learn to apply quantitative methods to design, price, and evaluate these bonds. Case studies of successful social and development impact bonds provide practical insights into real-world applications.
The module also delves into portfolio optimization, emphasizing the creation of socially responsible investment portfolios and impact investment funds, which aim to balance financial performance with positive societal impact. Additionally, advanced statistical methods such as survival analysis and data analytics are introduced, supporting the design of microfinance products and other tailored financial tools for underserved communities.
Finally, in the project component of the module, learners will work with real-world datasets and computer programs to address specific problems in a global context.