The Koto-SIB fast track training and employment programme for immigrants in Finland is an example of a social impact bond. More info about social impact bonds is available in social impact funding.
Highlights:
- A three-year pilot Koto-SIB for the employment of immigrants kicked off in 2015, as a response of the Finnish government to unprecedented global displacement crisis that hit its peak in 2015.
- Intervention process is a match making service between an immigrant and labour market. The personalised search for organisations which are in need of employees starts with looking into sectors like logistics, cleaning, IT and entrepreneurship and ends with ensuring that the commitment from both, immigrant and the workplace is achieved.
- The intervention period is three years (2017-2019) followed by another three years of follow-up period. The expected return on investments is between 5% and 8%. In practical terms, private investors bear almost all the financial risk, since the government pays to the fund only a very low compensation based on implemented legal services and the major part of bonus is based on outcomes.
- In the Finnish SIB structure, the Project/Fund Manager is not only in charge of establishing the Fund (Limited partnership) and raise the capital to the fund, but also to choose the best possible service providers and coordinate everyday operation in practice.
- From the Government point of view the overall and sustainable success is measured by two indicators: decreased labour market benefits paid to unemployed and increased amount of paid income taxes. Those two indicators are showing the level of employment, which is seen as a strong factor in terms of integration and quality of life.