The Skill Impact Bond, an initiative pioneered by the National Skill Development Corporation (NSDC) in India, is fifteen months into its journey and the company claims to have successfully enrolled nearly 18,000 young Indians from 18 states and union territories. This model, developed under the Ministry of Skill Development and Entrepreneurship, brings together public-private partnerships and a coalition of mission-aligned partners. Its primary objective is to revolutionise the implementation of skill training programmes, specifically targeting the need to bridge the gap between skilling and employment, particularly for women, according to an official release.
In acknowledgment of the persistent low female labour force participation rate (FLPR) hovering at approximately 30%, NSDC and a collective of partners initiated the Skill Impact Bond in 2021. This pioneering development impact bond in India aims to foster an outcomes-driven strategy that prioritises job placement and retention over the course of four years, the release mentioned.
In collaboration with NSDC, the coalition harnesses the expertise of a diverse group of funders and partners who possess extensive knowledge in innovative finance, skilling, gender equality, monitoring and evaluation, and data-driven decision-making. Gram Tarang Employability Training Services Pvt Ltd, Learnet Skills Ltd, Magic Bus India Foundation, PanIIT Alumni Reach For India Foundation, and Tata STRIVE are responsible for on-ground delivery of skill training. These partners have been chosen for their ability to innovate, scale, and effectively reach various target groups, as per the release.
“Skill Impact Bond has demonstrated its effectiveness in fostering collaboration between governments, private sector entities, and civil society organisations. And by leveraging such innovative financing mechanisms, we are not only increasing the availability of resources but also ensuring their efficient allocation to tackle the persistent challenges of skill gap and unemployment. The initiative has been successful as it operates on the principle of outcome-based funding and, I must say that the results achieved till now look encouraging,” Atul Kumar Tiwari, secretary, Ministry of Skill Development and Entrepreneurship, said.
The Skill Impact Bond establishes a direct link between funds and outcomes like certification, job placement, and retention, going beyond enrollment. Prioritising outcomes aligns incentives and promotes collaboration among stakeholders. So far, it has supported nearly 18,000 individuals from low-income families, with 72% being women. The programme boasts high enrollment rates for women and a promising retention rate, with half of the women sustaining wage-based employment for at least three months, the release mentioned.
“India’s youth have big dreams, and even bigger potential – all they need are the right skills and tools to unleash this. With its focus on supporting 50,000 young people, most of them first-time job seekers, the Skill Impact Bond is a financial innovation helping young people build core skills and competencies required to successfully enter and grow within the workforce,” Ved Mani Tiwari, CEO, NSDC, said.
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