Skill Impact Bond:
The Minister of State for Skill Development and Entrepreneurship cited the Skill Impact Bond (SIB) as delivering measurable social impact.
- It is an innovative financing tool aimed at improving employment outcomes for young people,
- Under this initiative, first skills are provided to young people, and then jobs are provided to them or they are made capable to perform better within their current jobs.
- India’s Skill Impact Bond (SIB) was launched in November 2021.
- It is the country’s first development impact bond focused on employment.
- It is backed by the Ministry of Skill Development and Entrepreneurship through the National Skill Development Corporation,
- Its objective is to benefit 50,000 young Indians over four years, with 60% of the beneficiaries being women.
- This innovative outcomes-based financing tool uses private sector capital and expertise, focusing on job placement and retention rather than merely on training and certification.
- 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.
