| National Skill Development Corporation (NSDC)

What it is

Sharing the vision of an ‘employment ready’ young India, the Skill Impact Bond is India’s first development impact bond for skilling and employment, with the goal of benefitting 50,000 young Indians over four years, 60% of whom would be women.

As an innovative outcomes-based financing tool that leverages private sector capital and expertise, the Skill Impact Bond shifts its focus from inputs like training and certification to outcomes like job placement and retention for India’s youth.

The collaboration also aims at strengthening the capacity of India’s technical and vocational education ecosystem through knowledge exchange, evidence and data generation and mainstreaming good practices.

HOW IT WORKS

Risk investors commit USD 4 million, used to fund service provider interventions upfront

Service Providers deliver skilling interventions to improve employment outcomes

Employment outcomes are independently verified by third-party evaluator

Outcome funders repay risk investors initial investment for each positive outcome achieved – upto USD 14 million over 4 years

The Skill Impact Bond links funding to achievement of outcomes, inverting the process of conventional grant-making which often funds activities and inputs. The initial financing to training providers is supported by risk investors, who are repaid by outcome funders on the achievement of predetermined, independently verified outcomes achieved by training partners.

This results in maximum impact for money spent, aligned incentives between partners, thus creating measurable social impact that spur social change

Consortium of Partners

The Skill Impact Bond is an initiative of the National Skill Development Corporation (NSDC) in collaboration with a coalition of partners comprising of the NSDC and the Michael & Susan Dell Foundation (MSDF) as risk investors, The Children’s Investment Fund Foundation (CIFF), JSW Foundation, HSBC India, and Dubai Cares as outcome funders, the British Asian Trust as the transaction manager, USAID and FCDO (UK Government) as technical partners, Oxford Policy Manager as the independent evaluator, and NSDC and Dalberg Advisors as performance managers.

The outcome funders – CIFF, JSW Foundation, HSBC India, and Dubai Cares – have been convened by the British Asian Trust. Each funder brings their own unique strengths, perspectives, knowledge, and learnings in the skilling and employment sectors.

NSDC and MSDF are the risk investors that have committed $4 million to provide upfront working capital to the service providers to implement the programme for the lifetime of the impact bond (in this case, four years). The trainings are imparted through NSDC’s affiliated training partners- who are amongst India’s top training organizations and have been selected through a rigorous evaluation process and intensely monitored for their performance during the program.

The agreed outcomes are assessed by Oxford Policy Management, an independent third-party evaluator. As performance managers, NSDC and Dalberg Advisors regularly support training partners with monitoring and evaluation in order to help them iterate, improve, and adapt to stay on track towards achieving outcomes.

Hear From Our Trainees

STORIES OF CHANGE

Success Story 1

Aakash lost his parents at a young age and lived with his elder brother’s family in Gumla district, Jharkhand. The family earned ₹60K – ₹70K annually as farming was the primary source of income, which left Aakash to go after odd jobs for extra income. As a result, he was never able to pursue further education after 12th standard.
He then enrolled in the Shutter Carpentry Course at Pan-IIT in November, 2022, which helped him achieve his dreams. Today, he’s making a great living and supporting his family as a Shutter Carpenter at AFCONS, Delhi.

STORIES OF CHANGE

Success Story 2

Rekha comes from a family of four, with her father being the sole provider working as a security guard. Not being able to secure a job after 12th standard, she turned to a friend who introduced her to this unique program. After learning about the courses and the associated career opportunities, she opted for Retail Sales Associate Course which helped her hone her people skills and gave her the confidence she needed to succeed. Today, she’s a respected employee at Uniqlo, working with great talents who bring out the best in her.

WHAT THE PARTNERS SAY?

The ongoing disruption in India's job market necessitates the need for a young workforce that is fully equipped for the future and meaningfully empowered to play a leading role in driving the country's economic progress. Youth skilling, therefore , represents one of the biggest opportunities that will catalyze and accelerate India's growth and development in the years to come. Our support to the Skill Impact Bond is a testament to our belief in collaborating with the right stakeholders to enable our youth's successful integration into the economic fold and allow them to contribute towards greater prosperity for all, especially in a post COVID-19 era 39.

Dr. Tariq Al Gurg,

CEO and Vice Chairman, Dubai Cares

This impressive coalition of public and private sector partners promotes collaboration on a shared development goal to support youth in their transition to employment. The Skill Impact Bond is a mindset shift and seeks to harness the power of its broad coalition to convince Indian state governments of the merits of outcome-based, gender appropriate interventions and increase their roll-out across India, potentially changing the skilling landscape.

Richard Hawkes,

CEO, British Asian Trust

We are leveraging our strengths and working with governments and global philanthropies to maximise our collective impact to increase the economic participation of women. This requires innovation and out of the box thinking that the Skill Impact Bond delivers on, by focusing on outcomes and not inputs. It not only prioritises women but will ensure creativity and innovation in delivering on outcomes by addressing barriers to women's retention in the workforce. This landmark Impact Bond for skilling, will offer key learnings that can be applied both in the national as well as global context to help solve one of the world's toughest challenges

Kate Hampton,

Chief Executive Officer, CIFF

Outcome-based funding models, which incentivize a more targeted focus on improving outcomes are ideally suited to driving placements in jobs as opposed to just providing the skills. This exciting new program will make a big difference by enabling young people to bridge the gap between developing meaningful skills and finding job opportunities in sectors that are in urgent need for talent. The Skill Impact Bond's ambition is to drive meaningful improvement in skilling outcomes at scale, while also leveraging our learnings to help the government and other funders make informed policy and spending decisions

Rahil Rangwala,

Director India Programs, Michael & Susan Dell Foundation

Our support for the Skill Impact Bond is a natural progression of HSBC's work in the skilling sector in India. This programme is not about how many people it skills, but how many people get a sustainable livelihood. Given the scale of the requirement of the skilling sector, we believe, all viable financing options should be on the table. Innovative solutions like this outcome based financial instrument will help create tangible action on the ground at a time of great urgency. It offers another way to address these challenges effectively and generate more learning about what works in development. Capturing the results and learnings from this programme will be critical as it will help improve commissioning and delivery of large scale skills training.

Aloka Majumdar,

Head of Corporate Sustainability, HSBC India

Skills drive the nation. The JSW Foundation has decided to be an outcome funder to India's first Skill Impact Bond in order to cultivate an innovative approach in the skill development space. A greater emphasis on placement and retention will definitely help secure a long-term impact. Skills are tools that translate dreams into reality. We are supporting this unique initiative to strengthen the overall skilling ecosystem in the country.

Sangita Jindal,

Chairperson, JSW Foundation

USAID is committed, along with our partners, to innovative financing that focuses on results. Through the Skill Impact Bond, we will improve the livelihoods, health, and wellbeing of women and youth from disadvantaged backgrounds throughout India, with positive impacts on their resiliency and that of their families and communities

Veena Reddy,

Mission Director, USAID in India

The UK has a strong record of addressing development challenges including through the innovative mechanism of Development Impact Bonds (DIBs). Following the success of Quality Education Impact Bond in India, the British government is partnering with the British Asian Trust (BAT) and other stakeholders to launch the Skill Impact Bond that aims to equip young Indians, especially women, to be employment-ready as we look to build back better after Covid-19"

Alex Ellis,

British High Commissioner to India

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