The Challenge
India faces a persistent skilling and employment gap, with millions of low-income youth unable to access quality training that enables upward mobility. Government programs, though free or low-cost, often lack industry relevance and quality. In contrast, private skilling programs offer better placement outcomes but are typically not affordable for low-income students. Limited access to affordable credit, coupled with a strong aversion to debt, further restricts access for many young people. As a result, capable youth are excluded, and India’s demographic potential remains underutilised.
Blended Finance in Action
TBFC, in collaboration with an Africa-based financial institution specializing in higher education and vocational training finance, is co-designing India’s first scalable Income Share Agreement (ISA) model to fund skill development for underserved youth. Under this innovative model, students pay for their training only after securing employment, with repayments capped at around 20% of their income.
To build the foundation for this model in India, we conducted a comprehensive feasibility study that assessed the appetite of training providers to participate in such a program, evaluated the interest from financial institutions to launch such a product, and structured a regulatory-compliant student-first ISA product. We are now working to design and fundraise for a facility to launch ISAs in India with shortlisted training providers and financial institutions.
