Performance-based “Development Impact Bond” launched in September 2018 has shown a thirty percent increase in the quality of education where the sponsored programs are run.
DIB is a relatively new instrument for investment in the social sector. In this methodology, parties with similar development goals ( private investors, Government, NGOs) come together, and funds are channeled into the programs. The difference here is that these funds are given based on measured outcomes.
In the very first year of inception, forty percent of schools that were part of this initiative either met their targets or exceeded it. The outcomes were measured by Grey Matters India.
The “Quality Education India” DIB was launched in September 2018, and it was the world’s largest education DIB to be launched. The total amount of fund raised was eleven million USD.
Some of the partners in this consortium are “British Asian Trust” of Prince Charles, the Michael & Susan Dell Foundation, Tata Trusts, British Telecom, and Mittal Foundation.
The program initiated in Delhi and Gujarat ran across six hundred schools and impacted over one hundred thousand students.
This unique social financing tool will pay out only if the desired outcomes are met. If they fall short of the “target”, the funders will pay only proportionately. UBS Optimus Foundation- the “risk investor” – provided the working capital for this model.
The Steering Committee of DIB noted that “The ultimate goal is to improve education standards in India, with the DIB paving the way for developing an outcome-based funding approach that has the potential to improve the lives of hundreds of thousands of children.”
Learnings from this experience will help expand similar models to the rest of India and other parts of the world.
Development Impact Bond helps improve literacy and numeracy in Delhi and Gujarat Schools.
