What is Skill Impact Bond?

The Skill Impact Bond (SIB) is India’s first outcomes-based financing initiative for skilling and employment, designed to make young Indians employment-ready and enable sustainable livelihoods. The programme aims to benefit 50,000 youth over four years, with a strong focus on inclusion, ensuring that 60% of beneficiaries are women. As an innovative outcomes-based financing tool that leverages private sector capital and expertise, the Skill Impact Bond shifts its focus from inputs such as training and certification to outcomes such as job placement and retention for India’s youth. The collaboration also aims at strengthening the capacity of India’s technical and vocational education ecosystem through knowledge exchange, evidence and data generation and mainstreaming good practices. The Skill Impact Bond (SIB) adopts an outcomes-based financing approach, where funding is linked to the achievement of measurable results rather than the delivery of activities or inputs. This marks a shift from traditional grant-making models by prioritising outcomes such as employment, retention, and improved livelihoods for beneficiaries. Under this model, upfront financing for training and skilling interventions is provided by risk investors. Outcome funders repay these investors only when pre-defined outcomes are achieved and independently verified, ensuring greater accountability and effectiveness in programme delivery.