The success of the Educate Girls Development Impact Bond (DIB) led to the Quality Education India DIB, which aims to change the lives of 200,000 primary school children in India. Partnering with an impressive coalition of public and private partners, as social investor we’ve provided 2.9 million Swiss francs in up-front working capital to three local NGOs for improving education quality.
The first phase of the program raised 11 million Swiss francs6. The intention is to double the size of the DIB in the coming years. If learning targets are met, the outcome funders will make payment each year, with up to a 8% IRR.
CHF 11 million
over four years will provide quality interventions to improve literacy and numeracy for 200,000 children
by the age of 10 (grade 5), fewer than 50% of Indian primary school pupils have reached the reading level of a 7-year-old (grade 2)
Investment in social outcomes
As social investor, UBS Optimus Foundation is providing up-front working capital to frontline NGOs so they can get to work improving education.
The education NGOs aim to improve literacy and numeracy in children. The focus is on predefined and measurable learning outcomes, not on any set activities.
The outcome funders repay the social investor – with a possible return – if learning outcomes are achieved. Repayment and returns fund further philanthropic programs.
See what leaders say about the world’s largest development impact bond in education
This landmark financial instrument applies an entrepreneurial approach to philanthropy and is likely to change the lives of over 200,000 children in India by driving up standards in literacy and numeracy. If the potential of this type of funding is unleashed, it could improve the lives of generations to come too.
We’re delighted to be involved with this innovative project, applying our experience from the successful Educate Girls pilot DIB. The Quality Education India DIB will achieve greater scale and also provide scope for innovation by comparing different education programs.
The DIB is providing a crucial resource to allow us to train principals and teachers in integrated schools and drive up the quality of education for children in Gujarat. By aligning investment in projects with outcomes achieved, this type of outcome-based funding ensures maximum impact for the money spent.
Outcome-based funding models – which incentivize a more targeted focus on improving outcomes – are ideally suited to driving quality in education. The DIB’s ambition is to drive meaningful improvement in learning outcomes at scale, while also leveraging our learnings to help government and other funders make informed policy and spending decisions.
By bringing together an impressive collection of public and private sector partners for the first time, this DIB has the potential to transform education outcomes in India. Our intention is to double the DIB’s size in the coming years.