UBS Funds Project to Support Female Education in India
An innovative impact bond based on results is being experimented by Swiss Bank UBS to improve children’s education in IndiaJuly 13th, 2016
“Educate Girls”, a programme whose goal is to enrol more girls in school and improve children’s literacy and numeracy, is being experimented in the remote region of Rajasthan, northern India. It is supported by a Development Impact Bond (DIB) and by the Swiss bank UBS.
What is innovative about this financing instrument is that payment is based on results. It is the world’s first impact bond in primary education, aimed at improving access to, and quality of, education for 15,000 children over the course of three years. To succeed, the project must meet a set of specific targets on the number of girls enrolled and the progress made in English, Hindi, and maths.
The funding received by the UBS Optimus Foundation was crucial in getting the programme off the ground. Upon its completion, the investor is repaid by the “outcome payer”, which in this case is the Children’s Investment Fund Foundation. 80% of the funding is assigned to learning, and 20% to enrolment. Financial returns depend on the success of the intervention, with an interest of up to 15% if the targets are reached.
UBS Optimus has already recouped 40% of its investment, with two years left to run. The programme has managed to enrol 44% of the girls identified as being ‘out of school’ across 140 villages and achieved 23% of the target learning improvements.
Cultural Diplomacy News
Laura Serra, CD News