Upskill Capital

 

Millions of young adults in India are trapped in poverty due to lack of basic English communication and soft skills. They are confined to temporary jobs in the informal sector and with low wages - averaging at US$22 per month.

There is a present and increasing need for employees trained in basic communication and interpersonal skills to support the growing service sector in India. Private and Non-Profit Vocational Education and Training (VET) Institutes are able to prepare young adults for these roles and, in the process, transform their lives. A 12-month course in communication skills at a VET institute costs approximately $150, but enables a graduate to increase his/her earnings six-fold (to $144 per month) and become a member of the lower working middle-class.

Strong demand for VET training exists, but growth of VET providers is limited by access to financing. VET schools rely mostly on donations — students have no savings to fund tuition and Corporations will not pay for tuition upfront despite their need for trained workers.

UpSkill Capital bridges this gap by providing student loans for young adults enrolling in skill-based VET programs. UpSkill Capital pays VET tuition upfront and is repaid by taking a percentage of the wages that students earn during an internship spanning the last six months of the training. To mitigate default and delinquency risks, interns are ‘temporary employees’ of UpSkill Capital and employers pay internship wages directly to UpSkill Capital. The portion of

the wage kept by Upskill Capital facilitates returns for investors (projected IRR of 18%). UpSkill Capital sources students through partnerships with VET programs with outstanding track records in placing graduates with well-respected employers.

A pilot is running, with 1,000 students at ETASHA, an established VET program (http://www.etashasociety.org/) in Delhi through 2013. Our goal is to educate over 4 million students by 2022.

For more information, contact Yohan Senaratne at info@upskillcapital.com or follow us on Twitter at @UpSkillCapital.