Development Impact Bond

Success of Africa's First Development Impact Bond for Poverty Alleviation

Proven positive and sustained impact

The Village Enterprise Development Impact Bond exceeded its targets, sustainably improving the livelihoods of 95,000 East Africans—including 70,000 women and children—and shielding them from the worst of the pandemic’s economic impacts. Results from the randomized controlled trial conducted by IDinsight from November 2017 to August 2021 demonstrated positive and sustained increases in household spending and net wealth, projecting an increase in lifetime household income of over $21 million.

IDinsight Village Enterprise Development Impact Bond Evaluation Findings

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Partners on the DIB

“We found that the Village Enterprise program led to higher household consumption and expenditure several years after the program. Participants and their families are eating more food, spending more money on things like healthcare, and increasing their wealth by purchasing items such as livestock, furniture, and business supplies. We estimate that the program will generate lifetime impacts of over $21 million, roughly four times the overall costs of the project,” Jeff McManus, Senior Economist of IDinsight and one of the DIB researchers

The transformative effect of the Village Enterprise Development Impact Bond

The DIB has transformed Village Enterprise by:

Increasing our focus on impact and data-driven decision making with a strong performance management system.

Accelerating technology adoption: mobile cash transfers, tablets, and dashboards for frontline field staff.

Providing operational flexibility to improve programming for greater efficiency and impact: a more interactive, digital training curriculum and business mentoring.

Strengthening our organizational systems and processes: risk assessment, financial procedures, and safeguarding.

Increasing Village Enterprise’s visibility and positioning at the forefront of thought leadership in result-based financing and global poverty alleviation.

Tying funding to results to drive impact

The DIB was a $5.32M demonstration project and collective effort showing how results-based funding can drive outcomes and innovation and ensure development organizations focus on impact.

Maximizing impact for development funding

By tying funding to measurable results,  RBF ensures that funding creates a real impact, providing a greater guarantee of value-for-money compared to traditional funding that funds activities or inputs.

Incentivizing innovation to increase impact

By shifting the focus from activities to outcomes – that is, by reimbursing results rather than receipts – impact bonds give service providers more flexibility to innovate and iterate to get results, and provide additional impetus to improve programming.

Expanding funding with new forms of capital

By creating an investment opportunity that includes a financial return, impact bonds invite the private sector to participate in ending poverty.

Scaling up results-based financing to drive impact

Building upon the learnings from our pilot, the vision of the scale-up includes:

  1. Overcoming barriers to funding poverty graduation at scale by attracting new funders and impact investors to the poverty alleviation sector.
  2. Attracting other high-performing organizations to the scale-up of a poverty alleviation outcome fund.
  3. Involving African governments in results-based funding.
  4. Streamlining outcome evaluation and contracting to reduce costs and increase replicability of this results-based funding model.

Village Enterprise envisions advancing our mission to end extreme poverty in rural Africa by promoting use of result-based financing in our direct implementation, in our partnerships with governments and other service providers, and at the policy level.

"We embarked on this pilot to test and learn from a new financing and incentive model that could fund change for the poorest. We are excited to continue to invest in Village Enterprise’s proven and cost-effective intervention and to explore improved scalable result-based financing options to further drive accountability and performance to the sector." Brian Boland, Co-Founder of the Delta Fund and lead impact investor in the DIB

“DIB was the catalyst of changes we see now and the game-changer at Village Enterprise. We became intentional in our program delivery and aware of what was expected of us in every step of the program implementation while all departments’ interest was rallied towards DIB success. This enabled improved relations with community and government leadership, excellence in our work and continued staff development.”

– Nancy Chumo, Kenya Country Director


“Using the results-based approach instead of delivering set activities, our field team worked closely with our business owners to set savings and business health targets. We trained teams to use powerful adaptive management tools and dashboards to track the entrepreneurs’ progress and problem-solve in real-time to ensure their businesses were profitable and they achieved their saving goals,”

– Taddeo Muriuki, VP of Operations

How is the Village Enterprise DIB Structured?

Village Enterprise launched the first Development Impact Bond (DIB) for poverty alleviation in sub-Saharan Africa in fall 2017. This $5.32M DIB directed $4.28M of outcome funding towards measurable results: increases in consumption and assets of first-time entrepreneurs living in extreme poverty*.

In this payment-for-results model, nine investors including Delta Fund, Bridges Impact Foundation, King Philanthropies, Laidir Foundation, Skees Family Foundation, Silicon Valley Social Venture Fund – SV2, Excelsior Impact Fund (those latter three investing via Impact Assets) provided the working capital to execute the intervention upfront and outcome payers (USAID Development Innovation Ventures (DIV), the UK’s Foreign, Commonwealth and Development Office (FCDO), and an anonymous fund)  reimbursed the investors for the original investment plus an additional financial return as outcomes were achieved. Instiglio provided project management support and was the process evaluator. The Global Development Incubator (GDI) served as the trustee of the outcome fund.

DIB Chart

*Performance outcomes are increases in consumption and net assets that were set based on results from Village Enterprise’s 6,300 households randomized controlled trial conducted by Innovations for Poverty Action.

Contact Us

Please contact Caroline Bernadi, Head of Philanthropy and Results-Based Funding at for more information