A landmark month for impact bonds in education: Two new initiatives focus spending on results

Two innovative new deals launched in September: a development impact bond (DIB) for education outcomes at scale in India, and a social impact bond (SIB) for early childhood development in South Africa. These deals follow three years after the launch of Educate Girls, the first education impact bond in a developing country.

As a sector, education has lagged behind social welfare and employment, which account for the majority of the 118 impact bonds contracted to date around the world. These two new contracts bring the number of education impact bonds contracted globally to 11. Despite these modest beginnings, there is evidence of an emerging appetite for contracting on outcomes in education. This is evidenced by the development of two outcome funds for education—one in India, and the other in Africa and the Middle East—which aim to direct $1 billion each to driving up the quality of education in these regions…