Various programmes have been undertaken in India in an attempt to increase literacy. These programmes, conducted by the government, NGOs and international organisations, have had an effect, but only to some extent. The way these programmes work, especially in tie-ups, is that the organisations working on the ground are paid for their activities and achieving targets for those activities.

NGOs are asked to build schools, distribute books, teach kids directly and achieve targets like a set number of schools built and kids taught. But what these programmes do not take into account is the result. They do not measure the number of students attending the schools that have been built, or the number of kids educated out of the children that have been taught. To change this, British Asian Trust, in association with various organisations, including Michael and Susan Dell Foundation, and UBS Optimus Foundation, have created the world’s largest education development impact bond (DIB), Quality Education India DIB, to improve the quality of literacy and numeracy.

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Launched in September 2018, the DIB seeks to develop a new funding approach that is focused on learning outcomes, ensuring the maximum impact is achieved for the investment provided. The structure of the DIB is a results-based finance mechanism, where the outcome funders pay the NGOs only after seeing successful results. If the outcomes are not fully achieved, funders pay proportionate to the results achieved. And if the NGOs produce results over and above the targets, they are paid incentives. The working capital used by NGOs to deliver the programmes is provided by the “risk” investor, in this case, UBS Optimus Foundation.

First phase

The DIB raised USD 11 million in its first phase of funding and is being implemented in four programmes across Delhi and Gujarat, in 600 schools, reaching over 100,000 students aged 5-11. It is a four-year programme, set to finish in 2022. Currently, three NGOs, namely, Kaivalya Education Foundation, Society for All Round Development (SARD), and Gyanshala are part of the DIB. In its second year, the DIB will also be implemented in Uttar Pradesh and will invest in a fourth NGO ~ Mind Spark.

All NGOs use different programmes, or methods to achieve the desired results, such as principal and teacher training, computer-based adaptive learning and free schools for out of primary school children. The NGOs aim to improve the quality of education by measuring improved literacy and numeracy.

In its first year, the DIB was able to increase the overall number of children achieving basic education by 30 per cent, and in a sample-based study of participant and non-participant schools conducted by Gray Matters India, 40 per cent of participating schools met or exceeded their targets in improving proficiency levels, outperforming non-participant schools. Commenting on the firstyear results, Richard Hawkes, Chief Executive, British Asian Trust said, “In many ways, Year One was a start-up year for both the DIB and the NGOs, testing the concept and allowing for adjustments to make improvements along the way. The ambition remains that the learnings from the DIB will be used to create an education “rate card”, an assessment of costs for tried-and-tested delivery outcomes against funding, to improve the quality of education.”

The governance of this DIB is led by British Asian Trust, the Michael and Susan Del Foundation, UBS Optimus Foundation and Tata Trusts, together with Comic Relief, the UK government’s Department for International Development (DFID), the Mittal Foundation, BT and the Lawrence Ellison Foundation.