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 Patrice Schneider Step forward a non-profit organization providing low-cost financing to independent news media in the majority world. The Media Development Loan Fund, a New York non-profit organization providing low-cost financing to independent news media in emerging democracies, has teamed up with Swiss bank Vontobel Group and Zurich-based social investment specialists responsAbility to launch a listed product to support the development of the independent press in developing countries. "Voncert responsAbility Media Development", which is issued today, will be listed on the Zurich stock exchange.
It combines an interest rate market element and an investment in MDLF, providing investors with a financial return as well as a social return.
Secondary trading is ensured by Bank Vontobel AG and the Swiss Agency for Development and Cooperation (SDC) as part of an innovative partnership.
"The listing of a financial product that mobilises private investment to support a free press is a truly revolutionary step - not just for media development but for all social causes," said Sasa Vucinic, Media Development Loan Fund Managing Director.
"It could provide a blueprint for engaging private finance in social projects around the world. Vontobel, responsAbility and the Swiss financial community deserve great credit for their vision."
The central element of the Voncert responsAbility Media Development is a loan at 1% to MDLF. Vontobel merged this loan into a structured interest product (VT Swap Note Open End CHF, five years).
The resulting product corresponds to a bond investment with a social component. In collaboration with SDC, Bank Vontobel AG ensures that the investment in MDLF is tradable at all times and that investors can resell the product before maturity if necessary.
This allows investors to invest in independent media at moderate risk via a conventional investment form.
MDLF financing enables leading journalists to play a key role in developing democratic societies by helping them build self-sustaining news businesses. Loans are typically used to buy printing presses, new TV and radio transmitters and broadcasting equipment, helping independent news outlets reach more people, generate more revenue and stay clear of government monopolies.
MDLF financing is often the only way an independent media company can access the capital it needs to strengthen and grow while staying free from state control or vested interests.
Funds raised will be allocated to a revolving loan pool that recycles repayments, enabling them to be used over and over to support independent news media around the world. MDLF supports each loan with intensive financial monitoring, management training and technology assistance.
In its 10-year history, MDLF has provided almost $50 million in affordable financing to more than 50 media companies in 17 countries, with loan losses of only 3.1 percent. It has a current portfolio of approximately US$30 million.
"The needs are immense," said Mr. Vucinic. "More than 80 percent of people live in countries without a free press. In other words, more than 5 billion people can't trust what they read in the newspaper, hear on the radio or see on TV, and do not really know what is happening in their own country."
The Voncert responsAbility Media Development follows the launch in December 2005 by MDLF of Free Press Investment Notes, the world's first investment product to support independent media in emerging democracies.
Individuals and corporations in more than 20 U.S. states and the District of Columbia can buy Free Press Investment Notes, which enable buyers to invest for a specific term - of between 1 and 10 years - and receive agreed financial returns, ranging from 1 percent to 3 percent.
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