Integration of immigrants in Finland can take longer than elsewhere, but a new project aims to change all that. The project aims to gather funds from investors via Social Impact Bonds and use it for accelerated integration programme including placements in working life.
That will save the government money in reduced spending on income transfers and training, as well as increase tax revenue—and that money will be returned to investors as profit.
"The profit target for this project is around 8 percent," said Teri Heilala, CEO of FIM Capital which is in charge of the fundraising among investors. "The state only pays for results, which are measured by tax receipts from those who participate in the project."
The aim is to train at least 3,000 immigrants over three years, and get at least 2,000 of them into work long-term. They will get a four-month training stint followed by work placements alongside the training.
This is a much more rapid approach than the traditional integration classes which can last from a year to 18 months. After that there is an average wait of three years before new arrivals get a job.
According to estimates from the Ministry for Employment, that will save the state some 28 million euros in reduced spending on welfare payments and integration classes, and increased tax revenues.
Two years in the making
The Finnish co-op group SOK announced on Monday that it was investing a million euros in the scheme, and may well take on some of the participants itself.
The project is the fruit of two years' work from the Finnish Innovation Fund (Sitra) think tank on the concept of Social Impact Bonds (SIBs). The bonds were first issued in Britain in 2010 and are now used for projects with measurable social benefits and therefore provide a return to investors based on the savings they produced in public spending.
Sitra has established three funds in Finland to support SIBs in the fields of children, families and young people's welfare; improving the prospects of people disadvantaged in the labour market; and helping older people live in their own homes for longer.