This article is a part of the Women, Farmers, Vaccines: 3 Perspectives on Building Resilient Systems Through Tailored Implementation Support series.

In India, over 47% youth are unemployed or self-employed, primarily due to a lack of opportunities. Skilled youth fare only marginally better—one in three is unemployed. Moreover, a 2023 report measured rural and urban female labor force participation rates at 36.6% and 23.8%, respectively, compared to male participation rates of 78.2% and 74.7%. The transition from skilling programs to job placement and retention presents a considerable challenge; even high-performing training providers see only 10–30% of their enrolled candidates remain in jobs three months after placement. To address these challenges, a consortium of influential public and private sector stakeholders has come together to launch the Skill Impact Bond (SIB). This four-year initiative, which leverages private sector resources, is the first development bond in India’s skilling landscape and represents an innovative approach to financing skilling and employment endeavors.

Shruti Goyal,
Associate Partner based in Mumbai 

Shruti, can you tell us about the Skill Impact Bond (SIB) in India?

Over four years, the SIB aims to positively impact 50,000 young Indians (60% of whom are women) by emphasizing outcome-driven approaches to finding and keeping employment. Traditional skilling programs often don’t produce great results for students—for even high-performing training providers, only 10–30% of their enrolled candidates remain in jobs three months after placement. Things are particularly challenging for women, who face inherent structural and social barriers to entering and remaining in the labor force. A core objective of the SIB is to shift women into non-traditional roles and address gender wage gaps.

For the SIB, Dalberg led the program design, developed the outcomes-based financing framework, and identified blended finance instruments to bring in private sector capital and expertise. We now play the role of the performance manager—we provide thought leadership support and learning sessions, analyze qualitative aspects of bond performance, identify risks, and develop appropriate mitigation strategies. We help the entire consortium—including National Skilling Development Corporation, MSDF, CIFF, JSW, HSBC, Dubai Cares, British Asian Trust, USAID, and British High Commission—to distill and share insights from this initiative across the ecosystem.

What was unique about this implementation work?

Skilling is actually a very mature industry in India, but it isn’t producing strong career outcomes for students. I think the most important aspect of the SIB is the work we’re doing with training partners to shift their attitudes and processes—so that they’re focusing on what matters most: long-term learning and career outcomes for students. Over the last four cohorts of students, the Dalberg team worked with training partners to test innovations at each stage of the skilling journey, from mobilization to training to placement to retention. For instance, we’ve tried different approaches to engaging with parents and communities to address the social norms that keep young women from enrolling in the first place. We’ve also developed a bundle of services to support young women with the challenges of migrating to new cities, and we’ve worked with employers to ensure that their workplaces provide safe and respectful environments.

Across all of this, we have also helped strengthen the capabilities of training partners. We’ve developed data reporting systems with sex-disaggregated data that’s essential for tracking outcomes. Now we’re testing innovations for data verification approaches to curb bad practices in the industry.

How are you seeing long-term system change?

The vision of the SIB is to learn what it takes to sustain higher levels of female labor force participation, and to influence key government schemes and other funders to support outcome-oriented programs. We’re now halfway through the program and we’ve seen tremendous success in terms of outcomes for candidates—we’ve moved the needle from 10–30% of students retained after three months of job placement to more than 55% of students retained. In the process, we’ve learned the program design requirements to get to these outcomes, and at what cost. We’ve also shared with the Reserve Bank of India our insights from outcome-oriented programs to enhance female labor force participation and presented the results at the G20 Presidency meetings in India in 2023. We continue to share our findings with related ministries in India.

Contact Shruti to know more about India’s first Skill Impact Bond: