Impact of Innovative Financing for Education to Leave No One Behind (IFE-2-LNOB)

Innovative financing mechanisms for education are expected to help reaching SDG 4 on inclusive and equitable quality education. However, limited research has been conducted on these mechanisms. IFE-2-LNOB will assess specific innovative financing mechanisms such as impact bonds and a social lending scheme with regards to their effectiveness and cost efficiency towards quality education of marginalized children and young adults.

Country/region Topic Period Budget
Tertiary education
Education policy
01.10.2021 - 31.03.2032
CHF  4’050’000

International and national, public and private actors are exploring innovative financing approaches in education. They have gained a lot of popularity in the past decade, because there are hope and claims to raise additional funds from private and public sources and/or to improve the efficiency and effectiveness of existing development funding. However, little is known on whether and how these innovative financing approaches can actually keep their promise on attracting additional funds (private and public), on improving the efficiency and effectiveness of existing education funding, and to what extent they contribute to achieving the SDG 4 on inclusive and equitable quality education. In order to not only follow a hype, but to make informed choices and decisions, Switzerland/SDC, other governments, policy makers, donors and impact investors engaged in improving education need further evidence on the opportunities and limitations of these innovative financing mechanisms. The project “Impact of Innovative Financing for Education to Leave No One Behind” aims at producing this evidence. It will assess a social lending scheme[1] and four impact bonds[2], implemented by Volta Capital and UBS OF, the two implementing partners of this research Consortium. Further members of the Consortium are the University of Cape Town, the Tata Institute of Social Sciences in Mumbai, and the Graduate Institute and Development Studies in Geneva (latter has the lead of the Consortium). 

[1] Lending for Education in Africa (LEAP) (ongoing) by Volta Capital.

[2] Impact Bond Innovation Fund (IBIF) 1.0 (concluded) and IBIF 2.0 (new) by Volta Capital; Quality Education India (QEI) Development Impact Bond (ongoing), and Education Outcomes Fund Development Impact Bond Fund (EOF DIB) (new) by UBS OF.

Objectives More and better use of funds towards inclusive and quality Education for girls and boys, adolescents and young adults, especially the most vulnerable and marginalized, in low and lower-middle income countries.
Target groups

The international education community and the international impact investing community (donors, governments, policy makers and impact investors).

Interdisciplinary research community.

Over 850,000 marginalized and vulnerable children, adolescents and young adults (more than half of them girls and young women) will benefit from the five innovative financing mechanisms’ programmes by the year 2026, that are realised by the implementing partners of the Consortium (Volta Capital and UBS OF) and scientifically evaluated in terms of effectiveness and cost efficiency towards quality education.

Medium-term outcomes

1.     The incorporation of the project’s research findings in the financing mechanisms of the two implementing partners Volta Capital and UBS Optimus Foundation (UBS OF) fosters improved quality education and increased cost efficiency, while also ensuring enhanced inclusion of vulnerable and marginalized children, adolescents and young adults.

2.     The global education policy dialogue and new financing initiatives are influenced by new evidence on innovative financing for education. 

With this project contribution, the SDC wants to enable a neutral, scientific assessment of such innovative financing mechanisms, in particular on their suitability for and impact on marginalized groups. Such in depth research would not be done without public funds.


Expected results:  

1.     Education programmes implemented by Volta Capital and UBS OF that will be researched reach at least 850,000 marginalized and vulnerable children, adolescents and young adults (more than half of them female).

2.     Report and mapping of existing global innovative finance for education programmes and of according scientific research are published.

3.     One social lending scheme, two social impact bonds, and two development impact bonds are scientifically assessed on several aspects.

4.     The Education Cannot Wait Initiative has access to and is engaged in the process of contextualisation of research findings for fragile and conflict situations.

5.     The global education community and the global innovative financing for education community has access to and knowledge of the research findings.

6.    Capacity building of north and south young career researchers in analysing innovative financing mechanisms is ongoing.

Results from previous phases:   The members of the Consortium have successfully worked together in different constellations and initiatives. The Graduate Institute of International and Development Studies in Geneva, the Tata Institute for Social Sciences, and the University of Cape Town were partners on the Swiss Universities for Development and Cooperation funded project on innovative financing for education. They developed eLearning materials on the various innovative financing mechanisms. Within this partnership, the Tata Institute for Social Sciences researched and authored the case study on UBS Optimus Foundation’s India Education Outcomes Fund.  The Graduate Institute of International and Development Studies in Geneva and UBS Optimus Foundation have been collaborating on the topic of Philanthropy in Education and Social Finance since 2017 and co-authored a book chapter on UBS’s social finance approach. The University of Cape Town has performed a case study on Volta Capital’s Impact Bond Innovation Fund.

Directorate/federal office responsible SDC
Project partners Contract partner
Private sector
Swiss Academic and Research Institution
  • Graduate Institute of International and Development Studies
  • Swiss Private Sector
  • Swiss Universities or FHS
  • Project contribution (PA 1): The Graduate Insti-tute of International and Development Studies in Geneva, representing the 5 partners of the con-sortium. SDC’s participation in the LEAP fund (PA 2): Volta Capital

Coordination with other projects and actors Global Partnership for Education, the Education Cannot Wait Initiative, the International Financing Facility for Education and the Education Outcomes Fund.
Budget Current phase Swiss budget CHF    4’050’000 Swiss disbursement to date CHF    3’030’000
Project phases Phase 7 01.01.2024 - 31.12.2027   (Current phase) Phase 5 01.10.2021 - 31.12.2027   (Current phase) Phase 4 01.10.2021 - 31.03.2032   (Current phase) Phase 3 01.12.2020 - 31.12.2024   (Current phase) Phase 2 01.03.2021 - 28.02.2026   (Current phase) Phase 1 01.12.2020 - 31.12.2025   (Current phase)