Non-profit Village Enterprise has raised US$3.5 million from private investors and philanthropic sources to provide first-time entrepreneurs who live in extreme poverty with capital, training and mentoring to start more than 4,600 small sustainable businesses in rural Kenya and Uganda by 2020.
Village Enterprise seeks to end extreme poverty in rural Africa through entrepreneurship and innovation, with its “Graduation” programme providing business and financial training, ongoing mentoring, seed capital grants and business savings networks to individuals who live on less than US$1.90 a day.
The Village Enterprise Development Impact Bond (DIB) – the first impact bond designed to reduce extreme poverty in rural Sub-Saharan Africa – has closed its initial round of funding of US$3.5 million from nine impact investors, including the Delta Fund, the Laidir Foundation, the Silicon Valley Social Venture Fund and the Bridges Impact Foundation.
It aims to equip 13,800 rural Africans who currently live on less than US$1.90 a day with the resources to become successful entrepreneurs. Outcome funders USAID and DFID will pay Village Enterprise and its investors based on results achieved, a pay-for-success model Village Enterprise said guarantees donor money will be linked to measurable increases in consumption and net assets.
Village Enterprise’s programme includes targeting, training, mentoring, seed capital in the form of cash grants, and saving groups. The long-term goal is to scale the poverty alleviation outcomes fund to increase the pool of capital available for poverty reduction and job creation programmes while ensuring that measurable results are achieved.
