Our Model
A cost-effective and sustainable approach to poverty alleviation
We work to end extreme poverty in rural Africa through entrepreneurship and innovation.
Using a community-based, holistic approach, the Village Enterprise program supports first-time entrepreneurs to move beyond extreme poverty by equipping them with all the resources, knowledge, and leadership needed to start sustainable businesses and savings groups. This allows participants to be self-reliant to meet their needs and build better futures for themselves and their children. It also fosters gender equity as our female entrepreneurs (83% of our program participants) are empowered and hold larger household and community decision-making roles.
Our Poverty Graduation Model
Validated by an independent, randomized controlled trial, the Village Enterprise poverty graduation program supports three entrepreneurs’ groups in establishing new businesses by providing seed capital cash transfers, training, and ongoing mentorship by a local business mentor. We then organize these entrepreneurs 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. Examples of businesses include livestock, farming, small retail stores and restaurants, tailoring, and beekeeping. For increased impact and scalability, we have integrated digital technologies into our graduation model such as mobile money, digital training and mentoring tools, and mobile monitoring and evaluation.
Village Enterprise has trained over 274,600 people and started over 80,100 businesses in Africa. As we grow and move into new regions and countries, we continue to hire dedicated and passionate local leaders as business mentors to deliver a highly locally-adapted program. And we constantly seek to improve our program to increase impact and efficiency.
An Inside Look at our Model
Participant Identification
- Village Enterprise identifies households that are most in need by engaging the village opinion leaders in a Participatory Community Mapping Exercise and using Innovations for Poverty Action’s Poverty Probability Index (PPI).
- Participants in our programs are individuals who live on less than $1.90 a day, have no prior business experience, and are unable to provide for their family’s basic needs.
Training
- Running a business is challenging. To support our first-time entrepreneurs in building sustainable small enterprises, we provide them with extensive business skills and financial literacy training designed for participants who have limited formal education.
- Sustainability training ensures that new business activities promote environmental best practices, while leadership and life skills components of our training ensure greater gender equity.
- The family support module of inviting the whole household to the conversation ensures that program participants—who are mostly women—are supported while participating in our program.
- Interactive training materials use an approachable, visual, and concise format and focus on learning by doing.
- Our business mentors can now access the training curriculum and video review modules digitally on their program-supplied tablets.
Savings Groups and Financial Inclusion
- Saving for future needs is critical to ensuring that participants don’t fall back into poverty. Business savings groups are a self-generating, self-managed form of microfinance that allows members to pool and access savings.
- Our mentors help participants form business savings groups of approximately 10 businesses (30 entrepreneurs) each.
- These groups provide members with ongoing protection against financial shocks and access to growth capital, thus serving as a mutual safety net and support system.
- When possible, business savings groups create mobile banking accounts.
Start-up Funding
- To light the fire of entrepreneurship, Village Enterprise provides seed capital via mobile cash transfer after the first-time entrepreneurs are trained and have developed a business plan with the help of their business mentor.
- Mentors guide each new group in selecting an enterprise that is best positioned to flourish, taking into account …
- The team’s skillset
- Local market conditions
- Team and enterprise risk factors
- Projected enterprise profitability
- A second cash transfer is provided six months later upon successful completion of the program as assessed by the business mentor.
Mentoring
- Equipped with mobile training and mentoring tools, our local business mentors provide invaluable coaching and mentoring throughout the program to ensure that all participants have the skills and knowledge to…
- Run a business
- Save for the future
- Resolve group conflicts
- Develop confidence and agency
- Successfully graduate out of extreme poverty
- Goal-setting tools enable us to standardize content for each mentoring visit and ensure every first-time entrepreneur receives targeted training.