The Village Enterprise Model
Working in rural African villages, Village Enterprise’s mission is to end extreme poverty in rural Africa through entrepreneurship and innovation. Our model is simple and cost-effective, at just $500 per three-person business.
The Village Enterprise one-year Graduation program provides groups of three entrepreneurs with seed capital, training and on-going mentoring by a local business mentor. We organize the business groups into Business Savings Groups (BSGs) of 30 entrepreneurs (10 business groups) to allow access to growth capital, provide a safe place for savings and build social capital. Integrated conservation training ensures that new business activities promote environmental best practices. Examples of businesses include livestock, farming, small retail stores and restaurants, tailoring, and beekeeping.
Village Enterprise has started over 35,000 businesses and trained over 145,000 East Africans. As we scale up and move into new communities, we’re designing and testing pilots to improve our impact and efficiency. Read about the Village Enterprise Accelerator.
Our Graduation Program
Why Grants, Not Loans?
After nearly 30 years in the poverty-alleviation sector—including forays into both microfinance and unconditional cash transfers—we have honed a multi-faceted, integrated and highly cost-effective method that works best in rural East Africa where few, if any, banks exist.
Key reasons for using grants include:
We work with vulnerable people who have never started a business.
A $150 micro-grant sparks the ingenuity of entrepreneurs who are willing to invest time and energy into improving their lives. Microloan repayments typically start immediately and don’t provide the critical “breathing space” needed to nurture a new business to success.
Entrepreneurship is by nature a high-risk activity.
Our first-time entrepreneurs are more willing to take the risk of starting a new business venture if they don’t fear the potentially high costs of failure and further indebtedness or loss of meager assets potentially caused by a loan default.
A small seed grant, rather than a loan, gives business owners an immediate kick-start in improving their family’s standard of living.
Profits generated from their new enterprise can be used to address critical family needs (like food, medicine and school fees) and build capital and savings for their fledgling business, rather than to repay high-interest loans.
“I appreciate that Village Enterprise focuses on the poorest of the poor. Most microloans don’t reach this population; micro-grants can. Micro-grants are the first rung on the economic ladder.”
Jessica Jackley, Kiva Co-Founder & Author of Clay Water Brick
Where We Work
Village Enterprise currently works in remote, rural areas of East Africa where more than half of the population lives below the extreme poverty line. We have a team of over 100 East Africans and a handful of expats working full-time in Uganda and Kenya, where we deliver the model with our own feet on the ground.
By 2018, we plan to expand to additional African countries through scaling partners.
“Overcoming poverty is not a task of charity, it is an act of justice. Like Slavery and Apartheid, Poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings. Sometimes it falls on a generation to be great. You can be that great generation. Let your greatness blossom.”
Extreme Poverty in Rural Africa
“Hunger, disease and poverty can lead to global instability and leave a vacuum for extremism to fill. So instead of just managing poverty, we must offer nations and people a pathway out of poverty.” – President Barack Obama
767 million people in the world are extreme-poor, meaning that they live on less than $1.90 a day the World Bank’s definition of extreme poverty. Half of the extreme poor reside in Sub-Saharan Africa. While 100 million people have escaped extreme poverty between 2012 and 2013, the numbers are still large in Sub-Saharan Africa – reaching a staggering 389 million. This is more than the number of extreme poor in all the other regions combined.
Less than $1.90 a day
The Human Face of Extreme Poverty
While these numbers speak to the magnitude of global poverty, statistics can’t convey the reality of those facing this daily struggle. What they fail to capture are the crippling effects of hunger, disease and lack of hygiene that perpetuate the vicious cycle of poverty. Most importantly, numbers can’t speak to our common humanity and the reality that no matter our culture, income level or geographic location, we all deserve to live with dignity and self-respect.
“Poverty is not just lack of money;
it is not having the capability to realize one’s full potential as a human being.”