Recently, the Minister of State for Skill Development and Entrepreneurship cited the Skill Impact Bond (SIB) as delivering measurable social impact.
About Skill Impact Bond:
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 Indiansover 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.
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.
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