Skill Impact Bond Latest News
Recently, the Minister of State for skill development and entrepreneurship cited that 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 skilling is provided to young people, and then provide them jobs or making them 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.
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.
Source: TOI
Skill Impact Bond FAQs
Q1: What is the first skill impact bond in India?
Ans: It is the first development impact bond in India dedicated to skills training and job placement.
Q2: What is National skills Development Corporation?
Ans: NSDC was set up by Ministry of Finance as Public Private Partnership (PPP) model. The Government of India through Ministry of Skill Development & Entrepreneurship (MSDE) holds 49% of the share capital of NSDC, while the private sector has the balance 51% of the share capital.
