Q. With reference to Results-Based Financing (RBF) consider the following statements:
1.It is a funding approach that rewards service providers based on the amount of time and effort they put into their work, regardless of the actual results achieved.
2.Development Impact Bonds (DIBs) are a type of RBF.
3.It seeks to improve the effectiveness and efficiency of social and development programs.
Which of the statements given above is/are correct?
Explanation –
Statement 1 is incorrect. RBF is an approach to financing and delivering services that focuses on achieving specific results or outcomes rather than solely on inputs or activities. It is often used in the context of social and development programs, particularly in sectors such as health, education, and water and sanitation.
Statements 2 and 3 are correct. Common forms of RBF include Social Impact Bonds (SIB), Development Impact Bonds (DIB), Conditional Cash Transfers (CCT), and Outcome-Linked Interest Rate Loans. RBF seeks to improve the effectiveness and efficiency of social and development programs by linking funding to the achievement of specific results or outcomes.
Source: ORF
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