Innovative Lending Helps Train Workforce in the People's Republic of China

Video | 26 October 2015

Results-based lending, a new approach to project financing where disbursement is linked to project results, supports vocational education in the Guizhou region of the People's Republic of China, helping provide a skilled workforce for the region's growing economy.

Transcript

Title: Innovative Lending Helps Train Workforce in the People's Republic of China

Results-based lending, a new approach to project financing where disbursement is linked to project results, supports vocational education in the Guizhou region of the People's Republic of China, helping provide a skilled workforce for the region's growing economy.

Text: The results based lending or RBL program supports the Technical Education and Vocational Training or TVET endeavor in the PRC’s southwestern Guizhou region. Guizhou needs an expanded workforce with high-level skills to meet the needs of a growing economy. ADB worked with the PRC government to implement the TVET program, using RBL as a funding mechanism.

SOT: Sofia Shakil
Senior Education Specialist
Asian Development Bank
There is a strong culture of long term planning as well as strong implementation systems in the PRC. For example, in the skills and education sector there are provincial plans that are prepared for their education sector which are aligned to the overall provincial, economic, and industrial transformation plan. These themselves are aligned to the 5-year plan of the PRC that makes it a conducive environment to apply a results-based approach when there’s a strong plan.

Management of risks is really a factor about how well the system and institutions are able to address the gaps whether it’s technical, fiduciary, or in safeguards. What we find in the PRC and particularly for this program for Guizhou’s TVET system is that more or less the fiduciary environment and the safeguards the systems are in place but what sometimes is lacking is the implementation capacity. For example, in the PRC in this case the schools and colleges are quite autonomous and they function more independently of the provincial plan. We believe that management of risk is really about strengthening the capacity at the local level and trying to strengthen a provincial TVET management system to ensure that the fiduciary and safeguards and the technical risks are managed within a foundation of a strong implementation capacity.

In the RBL we supported government programs which has its own results framework. We financed against achievement of certain indicators or disbursement link indicators that are selected from within this framework. For example, in the Guizhou RBL we have selected a set of sub indicators, which link directly to the quality of teachers, to the development of a relevant curriculum and to strengthening the monitoring capacity in the TVET system. To accomplish this the use of country or what we call program systems and their implementation institutions are the most effective way to help achieve these objectives.