Social Finance Israel launches bond to boost education for Arab-Israeli bedouin



ImpactAlpha, February 27 – Social Finance Israel has developed a social impact bond initiative to improve math and Hebrew language performance for high school students from Israel’s bedouin community. The financial intermediary is looking to raise $4.1 million for a six-year program. It has secured 40% of the funding, mostly from an Israeli bank, which Social Finance Israel declined to name.

The historically nomadic Arab-Israeli bedouin community has been settling in and around cities over the past 20 years. The bedouins, who are Arab citizens of Israel, are among the most socio-economically disenfranchised groups in the country, suffering from a high rate of poverty, low level of skills, and often being employed in low quality jobs.

Israeli bedouins also have low educational attainment, with only about 15% of students scoring high enough on university entrance exams to be accepted for study.

Social Finance Israel’s impact bond is looking to education as a means of breaking the cycle of poverty for the community. It is specifically targeting math skills, to prepare more bedouin students for careers in high-paying high-tech jobs.

“We have a vibrant high-tech industry in Israel, and a major stepping stone in personal mobility is gettin a high tech job,” Social Finance Israel’s Emanuel Bohbot told ImpactAlpha. “But this sector has been largely closed to the bedouin society because they don’t have the skills.”

The initiative is looking to support 1,200 students in Rahat, the largest bedouin city in Israel, coaching students in math studies in their final three years of high school. The program will enroll three cohorts of students from seven high schools over six years. Investors will be repaid if the program succeeds in increasing the number of students who pass their matriculation exams with high enough scores to be accepted to university. It will factor in matriculation exam scores in Hebrew, which is also required to attend university.

Social Finance Israel designed the program based on a 2015 study by Israel’s Taub Institute linking high school math achievement levels to employability and earning potential.

Impact bonds

The bond is the third impact bond to launch in Israel. It is also the third worldwide to focus on education outcomes for secondary schools students, following two initiatives in India to improve girls’ school enrollment and educational attainment.

“Most impact bonds are working with at-risk or lower age kids, or they’re focused on crime or employment. This is taking an entire city and elevating its capacity around a major challenge,” Bohbot said.

If successful, the government of Israel hopes to replicate the initiative in other vulnerable Israeli communities.

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