What do you get when Swiss bankers meet press freedom organisations? You get a bond that makes money and does a lot of good on the side.

This unique bond, called the Voncert responsAbility Media Development bond, is the brainchild of three unlikely groups - Swiss bank Vontobel Group, Swiss social investment specialist responsAbility and Media Development Loan Fund (MDLF), a New York-based venture capital specialising in providing low-cost financing to independent news media in emerging democracies.

Launched today in conjunction with World Press Freedom Day, this social bond is the first in the world to be listed on a major stock exchange.

How does it work?

Increasingly, investors are looking both for both a financial as well as social return on their funds.

For every 'press freedom' bond that is sold, Vontobel will invest it in the financial markets, and in addition, use some of the funds to provide a loan to MDLF at just 1% annual interest.

By raising funds at such a low interest rate, MDLF can then provide selected independent media organisations with either low-cost loans or investments.

"The needs are immense," said MDLF managing director Sasa Vucinic. "More than 80% of people live in countries without a free press. In other words, more than five 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."

To date, MDLF has provided either low-cost financing or investments totaling US$48.5 million to 53 independent media companies in 17 countries, including a 29% stake in news website Malaysiakini.com.

As a non-profit fund, the returns on such investments are re-invested in other media companies. Despite investing in high-risk countries, MDLF has a success return rate of 96.9%.

Traded on Zurich stock exchange

MDLF loans are typically used to buy printing presses and broadcasting equipment, helping independent news outlets reach more people and generate more revenue.

MDLF financing is often the only way an independent media company can access the capital it needs to grow while staying free from state control or other vested interests.

MDLF traditionally raised investment funds from foundations and international development agencies. However, with demand for investment outstripping supply, MDLF has turned to more innovative approaches.

In 2005, MDLF worked with the Calvert Foundation to launch the Press Freedom Investment Notes in the United States. The bond offers a return of 2%, about half the return on a typical US Treasury note.

The Swiss bond is the MDLF's second such initiative. The difference is that the amount raised through the Swiss bond is expected to be much higher as the bond will be traded on the Zurich stock exchange.

The Swiss bond also sets the precedent for other social causes.

"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 Vucinic,

"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."