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  • Impact bond
  • Employment and training
  • South America


9 mins

Colombia Workforce Development Social Impact Bond - EMPLEANDO FUTURO

Last updated: 22 Feb 2022

This SIB provided skills training and employment support to vulnerable, unemployed individuals in Bogotá, Cali, and Pereira. 

Project Location

Aligned SDGs

Target population

Individuals not formally employed at the start of the program, aged 18-40, and who had not participated in these two national employment programs: "Empleos para la Prosperidad" or "Mi Negocio". Participants also had to meet one of the following requirements: scored below 41.74 on the Beneficiary Selection System for Social Programs (SISBEN), were registered in Red Unidos, or were victims of displacement due to armed conflict.

The problem

This social impact bond (SIB) focused on tackling unemployment amongst vulnerable groups in Colombia. By the end of 2016, unemployment in Colombia was at almost 9%, according to World Bank figures. While this rate represented a sharp decrease from a peak of 20% in 2000, it remained high for vulnerable groups, such as young workers, females, and ethnic minorities, who are particularly likely to work in the informal sector. In 2016 the youth unemployment rate (15-24 years old) reached 17.8%. Inequalities in access to formal employment were aggravated by the armed conflict in Colombia, with 2016 marking a peak in the stock of internally displaced people due to conflict. Overall wealth inequality in the country mirrors this tendency, with a GINI index of 0.51 in 2016, the second highest in Latin America that year, after Brazil.  

In addition to these socio-economic challenges, there was a significant lack of data infrastructure around employment which made it difficult to assess their nature and extent and address them effectively.  

Finally, public spending in employability programs in Colombia has traditionally been disarticulated and commissioned based on outputs rather than outcomes, which does not guarantee that the most vulnerable population can effectively access the formal labour market.  

Source: SECO (2018), World Bank (2019) & communication with Fundación Corona (2019).

The solution

This SIB financed the delivery of skills training and employment support to vulnerable, unemployed individuals in the cities of Bogotá, Cali, and Pereira. The core objective of the SIB was to achieve 3-month retention in formal job for vulnerable unemployed population.

The SIB supported a range of employment measures, including skills training, psychosocial support, and intermediation services for job placement and 3-month retention. It financed these outcomes for up to 766 vulnerable individuals. 

The intermediation services included: analysis of the context of the labour market, raising awareness of potential employers, managing strategic relations with potential employers for this population profile, the characterization and preparation of participants, and the accompaniment of companies and beneficiaries to identify opportunities to articulate the vacancies with candidates.  

The service targeted individuals not formally employed at the start of the program, aged 18-40, who scored below 41.74 on the Beneficiary Selection System for Social Programs (SISBEN) (a Government tool that reflects poverty), were registered in Red Unidos (the extreme poor), or who were victims of displacement due to the armed conflict. To be eligible, individuals must also not have previously participated in Prosperidad Social's similar employment programs.  

In addition to the beneficiary-related goals, the SIB also had broader objectives, including: achieving higher cost effectiveness in service delivery, testing a new impact investing tool, and gather learnings around the intervention model and public policy. 

Source: Empleando Futuro, SIBs.CO (2019).

The impact

The project was initially meant to target 514 individuals and last until mid-2018. However, in light of the positive initial results and political circumstances (see project insights), the outcome payers decided to extend the project until the end of 2018 (phase B) and increase the budget to pay for more outcomes, raising the total outcome payment limit to 766 individuals. 

Out of a total of 1,855 people who received the labour intermediation, 899 (46% of the total) were placed in a formal job (117% of the 766 expected outcomes beneficiaries). Of the people who got a job, 677 managed to retain their job for at least three months (79% of employed beneficiaries and 88% of the 766 beneficiary outcome payment limit) and 309 for 6 months or more (34% of employees).  

Source: Empleando Futuro, SIBs.CO (2019) and Instiglio (2019) Executive Summary Results from the Learning agenda: First Social Impact Bond in a developing country.

Outcomes framework

In this SIB, the aim was to employ vulnerable individuals in formal jobs and support them in retaining those jobs (for at least three months). Job placement and job retention for 3 months were the two core-metrics, each of which represent half of the base repayment amount. The IDB-Lab / SECO provided a bonus payment of 10 percent of the overall price of the two metrics for 6-month job retention.   

Source: Gustafsson-Wright and Boggild-Jones (2017) with additional information via communication with Fundación Corona (2019)

During the structuring of the social impact bond, the outcome payers contributed actively to the definition of indicators, which has created political buy-in for the intervention and its end results. 

Source: Paya, M., Octaviana, K., Sharma, P., Niersbach, L., Olivares, E. And Harish, K. (2017) Introducing Social Impact Bonds in Colombia

Investor returns

Investor return was not capped at the design stage. There were positive returns for investors. The IRR to investors was 8,2% before inflation. 

Source: Communication with SIBs.CO 2019.


  • May 2016

    Start of the design process for the Workforce Development SIB - Empleando Futuro

  • November 2016

    Creation of the Social Impact Bond Programme in Colombia: Empleando Futuro, SIBs.CO. The framework inter-institutional agreement to create this programme was signed between the Inter-American Development Bank (IDB), the Swiss 

    State Secretariat for Economic Affairs (SECO), and the Social Prosperity Department of the Colombian Government (Prosperidad Social).  

  • March 2017

    SIB Launch date and contract signing

  • May 2017

    Service provision start date

  • July 2018

    End of Phase A of the SIB. Due to the positive results, the time and number of participants was extended in a Phase B.

  • December 2018

    Service provision end date

  • January 2019

    Final payment to investors made

  • Mid-2019

    Evaluation report and case study published

Project insights

  1. Record design time

    This social impact bond was designed in record time. The design process started in May 2016, and contracts were signed in March 2017. Several years of building up stakeholder awareness and exploring the model were critical to achieving this relatively short timeframe.

    Additionally, this was the first fully contracted impact bond in a developing country for which there is a government outcome funder and a donor government – in this case the IDB-Lab channelling resources from the Swiss government, contributed towards the funding of outcomes payments. 

    Source: Gustafsson-Wright and Boggild-Jones (2017).

  2. Sustained vision for SIBs

    The SIB programme in Colombia - SIBs.CO consists of a number of SIBs to be implemented over 5 years, as well as two additional components: market-building and dissemination of learnings. The programme is being supported by SECO and the IDB. The goal is to run at least 3 SIBs on the same policy area – employment of vulnerable populations – so that a model is built, feedback is fed into that model through different piloting processes, and the market of service providers is proactively built. 

    In addition to the capital to pay for outcomes, SECO and the IDB have allocated a dedicated budget to finance key market infrastructure activities such as data infrastructure projects, concept studies, public advocacy, and legal support.  

    The Workforce Development SIB - Empleando Futuro provided a lot of relevant insights into innovation in public contracting and the effectiveness and efficiency of different approaches to employability programs. These learnings were incorporated into the design of the second SIB, currently taking place with the Cali Municipality. The Cali SIB has 3 of the 4 service providers that were present in the first SIB and three additional investors, it has a 6-month formal job retention rate as its end goal, and the maximum return for investors is capped at 10% before inflation.  

    A third SIB will be structured and launched through an outcomes fund. 

    Source: SECO (2018) & communication with Fundación Corona (2019).

  3. Engagement of outcome funders 

    According to analysis by Emily Gustafsson-Wright and Izzy Boggild-Jones at the Brookings Institution, “the engagement of the outcome funders for technical assistance to the design phase of the project adds to both the uniqueness and complexity of this deal. Given that this contracting model is new for government, the role of SECO and IDB-Lab provided needed assurance, and an ability to seek technical assistance from a third party (Instiglio). Furthermore, donor engagement facilitated an extra push on outcome achievement by including a bonus payment of 10 percent of the outcome funding commitment contingent upon job retention after 6 months”.

    Source: Gustafsson-Wright and Boggild-Jones (2017).

  4. Extending the SIB 

    The project was initially meant to target 514 individuals and last until mid-2018. However, the outcome payers decided to extend the project until the end of 2018 (phase B) and increase the budget to pay for more outcomes (from an initial maximum of 2.2 billion Colombian pesos, equivalent to USD 764,093), raising the total outcome payment limit to 766 individuals.  

    The extension of the SIB to target 766 beneficiaries was motivated by different reasons. Naturally, it was based on encouraging initial results. However, there was an additional motivation. Colombia held national elections in May and June of 2018, as such, it was strategic to extend the SIB into the new government to ensure the overall SIBs.CO strategy was embraced by it. 

    Source: Communication with Fundación Corona (2019).

  5. SIB as a driver to create a better data infrastructure  

    One of the main achievements of the project has been the creation of an information system designed specific for employability programs. This system supports better policy making and quality inputs to improve the structuring of future employability programs in terms of price, costs and payment metrics. In Colombia, this was the first time that labour retention was defined as a key official success indicator of employability programs.

    The impact bond partners continue, together with the Government, to develop the data infrastructure that will be required to assess, in the long-term, how successfully unemployment is being tackled.

    The use of administrative data from the Ministry of Employment – which was not engaged in provision of services or outcome payment – to assess outcomes was creative solution to the challenge of data availability in the country.

    Source: SECO (2018) & Gustafsson-Wright and Boggild-Jones (2017).

  6. Promoting employment of vulnerable groups demands a holistic approach

    During the SIB, the providers learned the importance of engaging directly with the companies and potential employers. They engaged the companies by positioning the program as a way to reduce the turnover of employees. This relationship allowed some providers to have the companies present on the day of registration in the program. This was important for the success of the intervention because the beneficiaries could see that there were tangible companies and job opportunities waiting for them at the end of their training.

    Transitioning from informal to formal employment changes family dynamics, namely in the redistribution of domestic work and the need to adjust household budget management to a single monthly payment (rather than in smaller, more regular tranches, characteristic of informal work). The payment by results scheme and proximity with employers forced the providers to confront the reasons why some people were dropping out of work after a successful entry. As a result, they adjusted the intervention to help people cope with these challenges and stay in their jobs: namely by providing support with family budgeting and follow-up soft skill support after the beneficiaries were already employed.

    Source: SECO (2018).

  7. Making sure the service providers have some skin in the game

    The service provision contracting and oversight was done by the Fundación Corona with the support of Corporación Inversor. In these contracts, an average of 10% of payment to service providers was based on outcomes (actual rate varied across the four providers), so that they too had an incentive to focus on outcomes achievement. This small incentive was privately managed within between the providers and Fundación Corona as it is not part of the SIB outcomes framework. Of the four providers, two reached all the contracted goals and got the final 10%, one got a part of it, and one did not receive any of the final 10%. 

    Source: Communication with Fundación Corona (2019).

  8. Overcoming challenges in future projects

    When setting up the second social impact bond in Colombia, legal and procurement restrictions arose as it coincided with national elections. Because there was a strong relationship with the local authorities where the first SIB was conducted, one way to work around that challenge was to work at the sub-national level, directly with the Cali municipality. The set-up of the second SIB also allows for testing the model with a sub-national government rather than with the national government, which is strategic for the development of the ecosystem. 

    Source: SECO (2018) .

Interview with Daniel Uribe, Fundación Corona

Daniel Uribe: What was key to making the Colombia Workforce Development SIB a success?
Daniel Uribe: What was the key to performing your role well for the Workforce Development SIB?
Daniel Uribe: What factors enabled the record design time for the Workforce Development SIB?
Daniel Uribe: What are your top tips for organisations considering impact bonds in new contexts?

Contact details

Daniel Uribe, Executive Director, Fundación Corona  

Fundación Corona is the Execution Agency of SIBs.CO - a programme developed and funded by SECO and the IDB-Lab to develop and promote Social Impact Bonds in Colombia.


Communication with Daniel Uribe, Fundación Corona, June 2019.

Communication with María Alejandra Urrea and Natalia Estupiñan, SIBs.CO, June 2019.

Bernal S, Raquel. (2009) The Informal Labor Market in Colombia: Identification and Characterisation.  Desarrollo y Sociedad.

Empleando Future, SIBs.CO (2019) Empleando Futuro: Hallazgos del primer Bono de Impacto Social en Colombia [PowerPoint presentation]. Not available publicly.

GIDD database (2019) Internal Displaced Monitoring Centre.

Gustafsson-Wright and Boggild-Jones (2017) Colombia leads the developing world in signing the first social impact bond contracts. Brookings Institution.

Gustafsson-Wright, E. (2019) It takes more than 2 to tango: Impact bonds in Latin America and the Caribbean. Brookings Institution

Gustafsson-Wright, E. (2019b) Impact Bonds and Outcome Funds for Development (PowerPoint presentation).

Instiglio (2019) Executive Summary Results from the Learning agenda: First Social Impact Bond in a developing country

Instiglio (2019) Employment Colombia.

Instiglio (2019b) Impact Bonds Worldwide Data.

Inter-American Development Bank (2019) Colombia's Innovative Strategy to Employ its Youth.

Inter-American Development Bank (2017) IDB-IMF supports Colombia as pioneer of social innovation.

Inversor (2019) Social Impact Bond.

OECD (2012) Economic Policy Reforms 2012 Going for Growth

Paya, M., Octaviana, K., Sharma, P., Niersbach, L., Olivares, E. And Harish, K. (2017) Introducing Social Impact Bonds in Colombia. Columbia University – School of International and Public Affairs.

Swiss Confederation State Secretariat for Economic Affairs (SECO) (2018) Social Impact Bond Conference: Presentation and panel: SIB Colombia – Challenges, key learnings, potential for scale and first results.

World Bank (2019) World Bank Data – Unemployment, total (% of total labour force) (modelled ILO estimate) [Data file]

World Bank (2019) World Bank Data – Unemployment, youth total (% of total labour force ages 15-24) (modelled ILO estimate) [Data file].

World Bank (2019) World Bank Data – GINI index (World Bank estimate) [Data file].

This case study was compiled by MAZE – Decoding Impact.

Page last updated: February 2022.

Downloads and Resources

Colombia SIB - Data Template

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