Designing Social Impact Bonds for Education and ... Team Final PPT_final... · Athena is working to...
Transcript of Designing Social Impact Bonds for Education and ... Team Final PPT_final... · Athena is working to...
Designing Social Impact Bonds for Education and Microinsurance in India
Athena Infonomics TeamIDEV Practicum Client Presentation – April 27th 2018
The Client: Athena Infonomics
Athena Infonomics is a data-driven global consultancy based in Chennai and Washington. Athena is working to solve the most pressing development challenges of our times
through mainstreaming the use of data science in development processes.
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Why Social Impact Bonds?
3Graphic source: financematters.co
• Social Impact Bonds (SIBs) are a form of impactinvesting, and a new way of funding socialprograms by mobilizing private capital
• SIBs allow governments and other developmentactors to transfer the risks of innovative socialprograms to private investors, paying only forsuccess
• SIBs ensure focus on outcomes by making returnsdependent on achieving outcome targets
Our Process
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Defining Goals and
ScopeDetermining SIB Criteria
Selecting SIB Areas and Partners
Feasibility Assessment
and Program Design
Creating Financial models
Designing a SIB
Structure
Our Projects
Microinsurance Social Impact BondExpanding agricultural insurance coverage among
vulnerable farmers in Telangana and Andhra Pradesh
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Education Social Impact BondProviding high quality, low cost private education for
rural and peri-urban children in Lucknow
The Microinsurance Social Impact BondInsuring Vulnerable Farmers in Telangana and Andhra Pradesh
Indian Farmers are Vulnerable to Income Loss
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58%Rural households living off
agriculture
<25%Farmers insured over the past
decade
Source: India Brand Equity Foundation, an initiative of the Ministry of Commerce & Industry, Government of India. Ministry of Agriculture and Farmers’ Welfare, 2017 audit report on agricultural insurance schemes. Photo: Bioversity International/A.Gupta.
85%Of farmers are small / marginal
farmers (<1/2 hectare)
Improving Insurance Services is Key to Increasing Demand
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Lack of provider competition
Insurers have no incentive to
develop local networks
Farmers lack resources, access
and awareness
Farmers struggle to reap the benefits
of insurance Meeting with Mrs. Rajeswari Singh, Deputy General Manager of the Agriculture Insurance Company of India Ltd (AIC)
Our Solution: The Microinsurance SIB
• The goals of the SIB are to:
(i) increase crop insurance enrollment
(ii) improve the quality of the insurance services provided
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Photo: David Baxendale
Our Solution: The Microinsurance SIB
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Hire, train, equip, and deploy a local network of insurance agents
Help farmers document and submit claims
Improve transparency and
access to information
Gather data to improve farmers access to credit
Integrate service provision
Reach more farmers
Broaden the enrollment window
… solve the last-mile problem!
Risks
No break-even point - what happens once SIB funds run out?
Commercial firm with no experience in development projects
Must work within the confines of the government insurance scheme
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Way Forward
• ITUS has secured a tentative yes from thegovernment of Telangana as the outcomefunder
• Athena continues to advise ITUS ondeveloping the SIB and marketing to privateinvestors
• Realization in 2019?
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City Montessori School Satellite ProgramProviding High Quality Private Education to All Grace Chao & Rochana CooraySeptember 2017 – May 2018
The Opportunity
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There is a need for increased access to high quality private educational solutions focused both on academic and developmental outcomes.
The Opportunity The Client The Task Objectives &
Activities SIB Model Key Considerations
The Implementer
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City Montessori School Chain of highly successful private schools in
Lucknow, Uttar Pradesh. Currently the largest school in the world with a total enrollment of
55,000 students across 18 campuses.
The Opportunity
The Implementer The Task Objectives &
Activities SIB Model Key Considerations
Our Solution: SIB to Fund Three New Schools in Peri-urban Lucknow
• Bring intended implementer, City Montessori School, on board
• Design a program to be funded by the SIB structure
• Undertake stakeholder consultations
• Develop operational financial model for the SIB based on ground truth assumptions
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Opportunity The Client The Task Objectives & Activities SIB Model Key
Considerations
Program Objectives & Activities
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Objective 1: Increase education access to students from families
earning less than $5/day
Build/fund 3 schools in peri-urban Lucknow
Enrollment target – 1650 students per school
Affordable tuition starting at Rs. 180 or less.
Objective 2: Improve educational outcomes
Design Hindi-medium curriculum
Regular internal progress assessment
Teacher training, and professional development for teachers
Skill building through music, dance and computer curriculums
Character building through CMS moral education classes
The Opportunity The Client The Task Objectives &
Activities SIB Model Key Considerations
Risks
Unclear investor preferences
Complex governance and competing mandates
Governance
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Opportunity The Client The Task Objectives & Activities SIB Model Key
Considerations
The Way Forward
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• Most likely, the Indian government will notto be an outcome funder for this project.
• Athena is currently in discussions with CMSand potential investors regarding how tomove forward.
• Potential for replication in on other areas ofUP or India
• How do we measure the impact of the SIBs in a straightforward, cost-effective but reliable way?
• How do we convince investors that the implementing partner is committed to impact, when their business model is for-profit?
• Would other financing mechanisms be more appropriate?
Other thoughts:
• These tend to be complex public-private partnerships contracts – politics play a role
• Social Impact Bonds are new instruments that most people are not familiar with, which makes these projects difficult to comprehend for stakeholders
Hard Questions
Thank you
We thank our partners and the IDEV Department for their continued support of our project:Mr. Vijay Bhalaki, Director, Athena Infonomics Mr. Natraj Nukala, Director, ITUS Dr. Geeta Kingdon, President, CMS
Dr. Joshi, Athena Infonomics Mr. Ravindranath Babu Luke Kancherla, CEO, ITUS Mr. Roshan Gandhi, Director of Strategy CMS
Dr. Tanvi Nagpal, Acting Director, IDEV Program Mr. CV Kumar, Asst. Vice President, ITUS Akshansh Srivastava, CMS
Ms. Alison Harwood, Team Advisor Mr. Shashank Nanduri, Principal Officer, ITUS