The National Bank for Agriculture and Rural Development (NABARD) has fully subscribed Rs 4 crore to the maiden Zero Coupon Zero Principal (ZCZP) issue of the National Skill Development Corporation (NSDC) on the Social Stock Exchange (SSE) platform of the National Stock Exchange (NSE), in a landmark step for outcome-based social finance in India.

The NABARD ZCZP investment will help fund a project with an estimated outlay of Rs 11.25 crore, aimed at creating sustainable overseas employment for 600 rural youth from Other Backward Classes (OBC) in Madhya Pradesh.

NSDC is implementing the initiative with the Madhya Pradesh government. Under the structure, NABARD is participating through the ZCZP subscription, while the state government is expected to provide Rs 5.60 crore in outcome-linked funding once agreed employment targets are met. The remaining funds are proposed to come from beneficiary contributions.

The programme will prepare rural youth for jobs in Japan and Germany. Participants will receive language training, technical skills development, certification, cultural orientation and end-to-end placement support, including documentation and deployment assistance. The initiative aims to create lasting livelihoods and raise incomes of rural households by opening access to global labour markets.

The project is designed around outcomes rather than activities, prioritising verified overseas employment and sustained income gains over training completion alone. The approach marks a shift towards evidence-based development financing.

The transaction also highlights the potential of the Social Stock Exchange, set up under the framework of the Securities and Exchange Board of India (SEBI), to draw institutions, philanthropies, foundations and corporates into financing social projects through transparent and accountable mechanisms. The ZCZP instrument allows social projects to be funded without creating repayment obligations for implementing entities.

The NABARD ZCZP subscription reflects the bank’s commitment to strengthening the SSE ecosystem and exploring new financing tools for complex rural development challenges. Beyond the single project, the initiative is expected to yield experience in designing, implementing and monitoring outcome-linked interventions.

The project also shows how development finance institutions, government agencies and specialised implementers can collaborate around measurable goals, improving accountability, optimising resources and extending programmes to underserved communities.

NABARD said it hopes lessons from the programme will encourage wider use of Social Stock Exchange-based financing across development sectors.