THE British Asian Trust has launched a $14.4 million (£10.5m) skill impact bond (SIB) to provide vocational training for 50,000 Indian youths.
Coming about three years after the launch of the Trust’s $11m (£8m) education bond in India, the latest initiative aims at upskilling youths and 60 per cent of the beneficiaries will be women.
In a press release, the Trust said the SIB is the result of a collaboration with public, private and non-profit partners and comes at a time when Covid-19 has rendered millions of Indians jobless.
Women were seven times more likely than men to have lost their jobs during India’s lockdown, it said, adding that between November 2019 and November 2020, the urban Indian female workforce contracted by 27 per cent.
Trust executive director (social finance) Abha Thorat-Shah said India has the lowest female labour force participation in South Asia at 20.3 per cent and current outcomes of skills development programmes for them are “highly inadequate”.
“Out of every 100 women enrolled in skilling programmes, only around 10 stay in post-skilling jobs for three months or more,” Thorat-Shah said.
She added that the skill impact bond turns this challenge into an “investable opportunity and can help put India back on track for meeting its gender and employment-related UN Sustainable Development Goals post-Covid.”
Impact bonds are financing tools where funders agree to pay for social outcomes, such as the number of people who retained jobs, rather than programme inputs, such as the number of people trained.
Rather than a government or a donor financing a project upfront, private investors (risk investors) initially finance the initiative. They are repaid in full along with a small, fixed sum by parties called “outcome funders” if the outcomes are achieved.
The SIB follows the success of the British Asian Trust’s first bond in India, the Quality Education India bond. This was the world’s largest development impact bond, valued at $11m. Launched in 2018 with the aim of improving learning outcomes for 200,000 primary school children, the final outcomes of the bond will be evaluated in 2022.
Founded by the Prince of Wales to tackle widespread poverty, inequality and injustice in South Asia, the trust is the transaction manager for the SIB. It has convened the outcome funders (Children’s Investment Fund Foundation, HSBC, JSW Foundation and Dubai Cares) and taken the lead in designing and structuring the bond.
The risk investors of the SIB, India’s National Skill Development Corporation and Michael & Susan Dell Foundation, have committed $4m (£2.9m) for upfront working capital to the service providers, Apollo Medskills Ltd, Gram Tarang Employability Training Services Pvt Ltd, Learnet Skills Ltd and Magic Bus India.
Bob Blackman MP speaks during the event