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November Chari'tea Spotlight: Village Enterprise

Kenya & Uganda: From shelters to startups, each month Tease Tea selects an organization to support and focus on for the betterment, and empowerment of women.

Village Enterprise identifies the extreme poor in Kenya and Uganda and delivers a four part program to build businesses that increase household income: entrepreneurship training, a cash grant, business mentoring and a savings group. Businesses are started in groups of 3 participants which are later organized into Business Savings groups of 10 businesses each. 

Since its founding in 1987, it has trained 146,000 owners who have opened 36,000 businesses. There is strong evidence that the Village Enterprise program leads to a significant and persistent increase in income.

The Problem

Many of the world’s very poorest people are caught in a poverty trap because they face multiple reinforcing barriers to improving their standard of living, e.g. lack of access to capital for productive investments, poor information about managing assets, and inability to make risky but potentially productive investments due absence of a safety net or savings buffer.

The Solution

Cash grants and business training. Village Enterprise uses a one-year Graduation program to help people escape the poverty trap. The program provides business training and a $150 grant to groups of three entrepreneurs for starting a business. Each business is assigned a local mentor and is organized into a Business Savings Group of 30 entrepreneurs to provide access to savings once they have graduated from Village Enterprise’s one-year program. Multiple studies show that this type of program leads to significant increases in household income, and that these benefits persist over a number of years.

 

How Village Enterprise is different from other charities

Village Enterprise addresses the fact that poverty is multi-faceted by providing a multi-faceted program. Their group-based approach builds stronger and more lasting change by bringing together diverse skillsets, spreading risk, building social capital and producing cost efficiencies.

Entrepreneurship can be risky and take time to pay off, so the program offers grants, not loans, to allow vulnerable people to immediately improve their standard of living. The goal of the Graduation model is to empower the ultra-poor to sustainably improve their lives, and results so far bear this out.  

Village Enterprise has a strong commitment to testing, updating and improving its approach through rigorous research such as its current randomized controlled trial (RCT), independently run in collaboration with Innovations for Poverty Action. Undertaken to evaluate and inform the program's impact, the RCT is expected to be completed in early 2017. At its annual Innovation Summit, ideas submitted by staff are researched and tested, with the most successful integrated into the existing program. 

To get involved with Village Enterprise or make a donation, learn more here.



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