Bank’s $170 million loan to help improve employment prospects for graduates of technical upper secondary education, vocational training, and job-skills development
The Inter-American Development Bank (IDB) approved a loan for $170 million to Mexico to help finance the country’s Skill-based Human Resources Development Program, which supports training for youths aged 16 to 18 who pursue technical upper secondary education, vocational training, and job skills development. The IDB financing will help ensure the high quality of the training and its relevance to the country's labor market.
The financing is expected to benefit 8 million students over the next four years through improvements in curricula and redesign of courses. Activities include technical assistance, purchase of equipment, vocational counseling, monitoring of learning performance, and application of new instructional approaches. In addition, the program will provide financial support for learning in the workplace to 16,000 students and training for 4,000 teachers.
The IDB support will also strengthen Mexico’s National Skills System to improve training and to standardize skills needed by the productive sector. In partnership with strategic sectors, approaches will be analyzed for reorienting and strengthening Mexico’s skills development system, and the use and value-added of job skills certificates by businesses and individuals will be evaluated, among other activities.
According to official statistics, 70 percent of students in the final year of secondary school receive only minimal or inadequate basic skills training, and only 40 percent of employers report that graduates are prepared to enter the labor market.
The IDB loan for US$170 million will have a bullet repayment in 2024, a grace period of 10.6 years and an interest rate based on LIBOR. The local counterpart contribution totals US$30 million.