From Innovation to Institutionalisation: What’s Next for Outcomes-Based Financing?
By Hitan Mehta – Chief Executive, British Asian Trust
A shift in the conversation
I joined partners from across the British Asian Trust network at the recent Outcomes Finance Alliance Summit in Cape Town. The Summit brought together a diverse group of actors from over 28 countries working at the forefront of outcomes-based financing. What stood out most, however, was not just the breadth of participation, but how much the conversation itself has evolved.
For many years, these convenings have focused on innovation. How do we design new instruments? How do we test and prove that paying for outcomes can work? Those questions are still important, but they are no longer the main focus of the conversation.
What came through clearly in Cape Town is that we are entering a different phase. The question is no longer whether outcomes-based financing works. It is how we take it to scale and embed it within systems.
From pilots to platforms
At the British Asian Trust, this shift was reflected in how we engaged at the Summit. We had the opportunity to showcase several of our flagship initiatives, including LiftEd and the Skill Impact Bond.
Taken together, these initiatives reflect a broader journey from pilots to scale, and from standalone programmes to approaches that can be institutionalised. What is becoming increasingly clear is that scale will not come from isolated projects, but from building systems that align incentives, enable replication, and integrate outcomes-based approaches into how funding is allocated and delivered.
Governments moving to the centre
One of the most striking shifts at this year’s Summit was the growing presence and leadership of governments. Compared to previous years, there was a noticeable increase in public sector engagement, with strong leadership from South Africa and India, alongside participation from governments such as Namibia and Kenya, and teams from Colombia working closely with government partners. Together, this highlighted the growing global relevance of these approaches.
We had the honour of hosting Shri Jayant Chaudhary, Honourable Minister (Independent Charge) for Skill, Development and Entrepreneurship and Minister of State for Education, Government of India at the Summit, which underscored the level of political ownership and ambition behind this agenda.
This shift matters. It signals that OBF is no longer seen as a niche innovation, but as a tool with real relevance for delivering public priorities at scale.
India offers a compelling example of where this is heading. Building on earlier collaboration through the Skill Impact Bond, the government is now stepping into the role of an outcomes funder at scale through the soon-to-be-launched Skills Outcomes Fund.
The $60 million Skills Outcomes Fund aims to unlock aspirational livelihoods for over 200,000 youth from low-income backgrounds across India over 4 years and we recently hosted a funder roundtable in New Delhi, chaired by the Honourable Minister Shri Jayant Chaudhary, convening leaders from government, CSR, philanthropy, and private sector to discuss this ambition—as part of a campaign to build this unique initiative.
This marks an important milestone towards embedding the OBF approach within government systems.
Beyond efficiency: aligning incentives
Another theme that came through strongly in conversations throughout the week was how we think about the value of OBF.
Historically, the emphasis has been on efficiency and accountability, ensuring that funding is tied to measurable results. That remains essential. But increasingly, the conversation is moving beyond this.
OBF has the potential to align incentives across different actors in a way that enables new forms of collaboration and participation. In a context of shrinking Official Development Assistance (ODA), this feels particularly important. The challenge is not only how to make existing funding go further, but how to structure financing so that a broader set of actors can engage.
This is where the interplay between outcomes-based financing and blended finance becomes especially relevant. Blended finance can help unlock new pools of capital by adjusting risk-return profiles, while OBF ensures that this capital is directed towards meaningful, measurable outcomes. Used together, they offer a pathway to both scale and accountability.
Unlocking new sources of capital
This also raises important questions about the role of the private sector, including CSR funding. There is clear potential for these actors to play a more catalytic role, particularly if engagement moves beyond one-off contributions towards more structured and sustained participation.
Too often, private and CSR funding is deployed across fragmented initiatives, making it harder to track impact or align with broader system goals. OBF offers a different approach. By linking funding directly to results, it creates a structure through which private capital can engage in a more coordinated, accountable, and impact-driven way.
What comes next?
Returning from this year’s summit, the sense of momentum is clear, and so is the direction of travel.
If the past decade has been about proving the concept of outcomes-based financing, the next will be about embedding it. That means working more closely with governments, aligning incentives across sectors, and designing approaches that can operate at system level.
None of this suggests that outcomes-based financing is a solution to every challenge. But where it is applied well, it offers a powerful way to align incentives, strengthen accountability, and deliver impact at scale.
The opportunity now is not just to do OBF better, but to make it part of how development finance works.
