With only four out of ten children in low- and middle-income countries on track to gain secondary level skills by 2030, and only 88% of children in lower-middle income countries completing primary school, financing quality education is imperative. In rural India, nearly three quarters of children in Grade 3 cannot read at grade level. To attempt to address this problem, India is beginning to play a leading role in using innovative financing.
On November 6, the Center for Universal Education (CUE) at Brookings hosted a webinar to discuss one such innovative financing structure, impact bonds—an outcomes-based financing tool where investors provide upfront capital to service providers. India has 3 contracted impact bonds, two of which are in the education sector: the Quality Education India (QEI) development impact bond (DIB) and the Educate Girls DIB. The QEI and Educate Girls DIBs provide interesting case studies to explore the potential and limitations of utilizing impact bonds to improve learning outcomes in India.
This event brought together key impact bond stakeholders from India, providing an opportunity to share lessons learned, and to work together to find solutions to pressing education challenges. In the webinar, CUE also launched a comprehensive report on paying for education outcomes at scale in India. Key learnings from CUE’s research indicate that though impact bonds might not be the answer to all the challenges faced by the education system in India, judicious use of the tool has the potential to focus financing on results and reinforce the use of data and evidence in decisionmaking.