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Enschede, the Netherlands, where the world's first cross-border SIB will be helping residents find work in Germany.
The Enschede local authority, in the eastern Netherlands, launched the bond in partnership with Dutch philanthropy fund the Start Foundation and Dutch bank ABN AMRO, as the co-investor, last week.
Social impact bonds are an innovative new financing system that mobilise private finance to tackle social issues. Under the mechanism, returns to investors are contingent on the outcomes achieved under the programme.
The first social impact bond was announced in the UK in 2010, and today around 60 have been established in 15 countries worldwide.
Patrick Welman, councillor for economy and employment at the Enschede local authority, said that last week’s bond is a “creative way” of tackling unemployment that can offer the municipality’s “jobseeking residents optimal employment opportunities across the border”.
The bond will aim to match jobseekers in Enschede with German employers. It will target 7,000 households in Enschede currently receiving unemployment benefit, and enable the provision of intensive support to 138 individuals to help them find available jobs in Germany.
The unemployment rate in Enschede is 8.5%, while across the border in Germany’s North Rhine-Westphalia region unemployment stands at less than 3%. At the same time, there are ample employment opportunities, with the number of unfilled vacancies expected to rise in the coming years as large groups of German employees reach pension age.
“We are literally expanding the horizons of the labour market as well as the social impact bond instrument,” said Jos Verhoeven, director of the Start Foundation.
