Results-based financing brings 90,000 young people into jobs in Nepal

Training for young people doesn’t make sense in itself if it is not related to employment. But how to ensure that the “right” skills are provided and in a quality that matches with the needs of the labour market? And that the graduates do not end up well-trained and yet jobless? The Employment Fund Nepal managed to bring nine out of ten trained disadvantaged youths into employment, 90,000 in all. The recipe for success was a resultsbased financing model for training providers.


About half a million young people enter the Nepalese labour market each year. Poor formal education, limited technical skills and family responsibilities as well as a poorly developed private sector make attaining gainful employment a challenge for these young people. This is why the Employment Fund was established in 2007 – targeted at disadvantaged, unemployed out-of-school youth, mainly in rural and semi-urban regions. It was financed by UK Aid, the Swiss Agency for Development and Cooperation and the World Bank, with an overall budget of about 36 million US dollars (USD). Helvetas operated the secretariat of the fund. The project ran until 2016. The Employment Fund financed skills training and employment services through around 60 contracted training providers, mainly private firms. It covered 87 per cent of all districts in Nepal and approximately 80 occupations in different sectors (e.g. construction, hospitality, garments and textile, agriculture, electronics, mechanics, etc.). The training courses usually lasted three to four months. Eighty per cent of the classes were practical, and were often run in service provider workshops, but also in companies; theory lessons accounted for the remaining 20 per cent. After the training, the trainees underwent a national assessment and got an official certificate.

Special emphasis was placed on the inclusion of women and other disadvantaged groups, aged 16 to 35, with a focus on women under 24 (in co-operation with the World Bank’s Adolescent Girls Employment Initiative). Alongside communication campaigns and counselling, the service providers were offered incentives to target specific groups. This additional financial support was especially high where economically poor women from discriminated groups (Dalits, widows, the physically disabled and the internally displaced) were concerned, followed by economically poor women from all ethnicities and economically poor men.