Crafting Blended Finance Solutions to Foster Sustainable Employment, Especially for Young Women

In India, over 47% youth¹ are unemployed or self-employed, primarily due to a lack of opportunities. Skilled youth fare only marginally better—one in three is unemployed². Gender disparities further compound the employment challenge: a 2023 report measured rural and urban female labor force participation rates at 36.6% and 23.8%, respectively, in contrast to male participation rates of 78.2% and 74.7%.

Public and private sector efforts to address this issue are underway. However, there is a pressing need to focus on achieving sustainable outcomes for the youth. 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 placement³. Moreover, the structural and societal barriers that disproportionately affect women pose inherent disadvantages for women entering and remaining in the labor force. Investing in women must therefore seek to address underlying systemic barriers; for example, resources must be strategically allocated to initiatives that work with parents and communities to address social norms, support young women with migration to new cities, and build safe and respectful workplaces with employers.

To this end, a consortium of influential public and private sector stakeholderswith extensive experience in managing large-scale skilling initiatives, engaging in outcome-driven financing mechanisms, and fostering socioeconomic empowerment for women and familieshas 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.

The SIB aims to positively impact 50,000 young Indians (60% women) across eight cohorts by shifting the focus from conventional inputs like training and certification to tangible outcomes, notably the attainment and sustainability of employment opportunities for India’s youth.

A core objective of the program is to equip women with the necessary skills to excel in non-traditional roles, thereby contributing to the reduction of gender wage disparities.

In the SIB, risk investors (RIs), including National Skilling Development Corporation (NSDC) and Michael and Susan Dell Foundation (MSDF), have enlisted the services of marquee training providers (TPs)—Learnet, Pan IIT, and Magic Bus—to deliver skilling services to beneficiaries. RIs disburse working capital payments to TPs based on ongoing performance evaluations. Upon the successful achievement of targets within the agreed timeframe, outcome funders (OFs)—comprising CIFF, HSBC, Dubai Cares, and JSW—reimburse RIs for the costs incurred, along with a pre-determined risk premium. USAID and UK AID (FCDO) participate in the consortium as learning partners, the British Asian Trust (BAT) serves as the transaction manager, and an independent evaluation manager (EM)—Oxford Policy Management Limited—coordinates bond activities, verifies achievements for outcome payments, and drives the long-term learning agenda.

As a design partner for the bond, Dalberg has a detailed understanding of the intricacies of the initiative and stakeholders involved. Drawing on our experience with similar development bonds, we are also assuming oversight of the performance of the TPs to ensure the achievement of target outcomes.  Dalberg provides thought leadership support and learning sessions, analyzes qualitative aspects of bond performance, identifies risks, devises appropriate mitigation strategies, and maintains close communication with the MEL partner to better synthesize bond learning. We also support NSDC and BAT in process management and lead the generation and documentation of insights and lessons learned from the project.

Cohort 1 saw enrollment of 4,411 individuals, none of whom had any previous employment, and 74% of whom were women. Of these, 71% were placed in jobs and 54% were retained three months after starting.

Subsequent cohorts are seeing similar encouraging trends.

The initiative has already generated valuable insights into how to improve outcomes for women. For instance, it has become clear that engagement strategies are needed for candidates’ family members to help facilitate moving women from traditional roles to non-traditional ones like manufacturing. Employer sensitization and engagement prior to the start of training is also needed, coupled with greater efforts to align the design of training with employers’ specific requirements, to produce better training outcomes and improve candidates’ expectation management. Once placed, candidates show better retention when they are supported in adjusting to new jobs and cities via setup support, regular calls, and counseling. 

Dalberg has also gleaned valuable operational insights from its work so far on the initiative. Operating within a complex ecosystem involving numerous stakeholders has required agility in overcoming challenges unforeseen during the planning phase. We have experimented with nimble and scalable methods of outcome verification and are now leveraging technology to improve data and reporting as a public good for the entire ecosystem. By embracing a culture of continuous learning, our consortium has adapted approaches based on insights gathered from each phase, ensuring a resilient performance management and evaluation framework.

Looking ahead, our focus will shift from being “supply-led” (working with candidates) to being “demand-led” (working with employers). We will foster deeper engagement with employers to enhance on-the-job support and improve health outcomes for young women; in addition, we will work with employers to provide a safer and respectful work environment for candidates’ sustained career advancement.  We are also exploring avenues to identify higher-paying roles for women candidates, launch employer sensitization programs, and offer candidate support to achieve pay equity for young women.

  • 1

     Ministry of Labour and Employment, Report on Youth Employment-Unemployment Scenario Volume 2, 2015-16.

  • 2

     Periodic Labour Force Survey (PLFS), 2017-18.

  • 3

     Dalberg analysis, data reported by select training programs surveyed.


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