On October 9, the National Skill Development Corporation (NSDC) announced that India’s first Skill Impact Bond that was launched in 2021 has so far trained 29,000 first-time jobseekers from low-income families across 18 sectors in 24 states and Union territories, and of these, 73% have joined jobs.
What’s a Skill Impact Bond?
It’s an innovative financing tool aimed at improving employment outcomes for young people, by first skilling them, and then providing them jobs or making them perform better within their current jobs.
How does it work?
There are ‘risk investors’ usually from the private sector who provide funding to service providers (organisations that deliver skills training and support job placement). Then there are outcome funders who repay the ‘risk investors’ if the programme has met its employment targets. There is also a third-party evaluator who verifies employment outcomes.
What did the NSDC do?
In 2021, it launched this Skill Impact Bond with the aim of making 50,000 people job-ready in four years. In three years, it has met 60% of its target (29,000 people trained, of which about 21,000 have secured jobs). The Skill Impact Bond has a strong gender-responsive approach – and 74% of trainees are women from low-income backgrounds, many with limited education and no prior work experience. The NSDC said that strategies such as family engagement, workplace familiarisation, mobility support, and post-placement assistance have been instrumental in engaging and retaining women in the workforce.
Who are the NSDC’s partners?
The Skill Impact Bond’s coalition of partners comprises the British Asian Trust, Michael & Susan Dell Foundation, Children’s Investment Fund Foundation, JSW Foundation, HSBC India, Dubai Cares, United States Agency for International Development, UK Government’s Foreign, Commonwealth and Development Office, Dalberg Advisors, and Oxford Policy Management.
The skill training is delivered on-ground by Learnet Skills Ltd, Magic Bus India Foundation, and PanIIT Alumni Reach For India Foundation, all selected for their capacity to innovate, scale, and reach diverse target groups.
Bharath Visweswariah, executive director, India, British Asian Trust, told FE that the Skill Impact Bond’s latest results affirm the power of an instrument like an impact bond to transform the way skilling is approached and financed in India. “With each cohort, the number of young people and women securing employment is increasing, with seven of every 10 women trained through the Skill Impact Bond securing jobs,” he said. “Our independent evaluator is rigorously testing all the data and the data here is clear – linking funding to outcomes is having an incredible impact.”
What does verification say?
The NSDC said that independent verification of the Skill Impact Bond has revealed that 70% of enrolled women and 81% of enrolled men have secured jobs following their training. Job retention has also shown good outcomes, with 56% of women and 62% of men retaining their jobs for at least three months. Among those placed in jobs, 40% of women and 66% of men continued working for six out of 12 months.
What is its budget?
With a budget of $14.4 million, the Skill Impact Bond is now entering the 2.0 phase.