Finland: Social Impact Bonds to help refugees

These so-called Social Impact Bonds (SBI) were developed a few years ago internationally, and now Finland becomes the first Nordic country to make use of them. The Finnish Ministry of Employment and the Economy in cooperation with Sitra, the Finnish Innovation Fund, decided to introduce a three year pilot starting in the spring to employ immigrants. 

“Having a job definitely increases the immigrants’ wellbeing and link to Finnish society. For this pilot project we need businesses which are interested in hiring immigrants and offer them workplace training,” says Sonja Hämäläinen, Ministerial Advisor at the ministry.

The aim is that those who join the project are ready to start working after only two months of integration training. Getting immigrants into work quicker will save the state money, and if the goal is reached the state will reimburse some of the money saved to the projects. The first SIB project was made public in November. The investors — the Me-säätiö foundation, Sitra and a private investor — provided capital in order to improve employment in the public sector.  

According to the Minister of Employment and the Economy, Jari Lindström, Finland has to introduce new methods in order to make integration more effective. 

Social Impact Bonds were first used in the UK in 2010 to help finance a programme aimed at rehabilitating prisoners. Since then, the pioneer Social Finance UK has raised £75 million (€104.5m) in capital. 

In the spring of 2015 The Forum for Social Innovation Sweden (MSI) set up a network for Nordic players to share their experiences. 

The Nordic Labour Journal recently wrote about Startup Refugees, a project aimed at turning refugees into entrepreneurs.

New, innovative ways of preparing immigrants for the labour market are being used outside of Finland too. Vinnova, Sweden’s innovation agency, has provided economic support for several projects aimed at creating sustainable immigration and speeding up the integration of newly arrived. 

One of the projects matches municipalities’ recruitment needs with newly arrived who have higher education. Another project identifies newly arrived who have been running businesses in their home countries.