Village Enterprise Graduation Program Targets the Ultra Poor in Rural Africa

The Village Enterprise graduation program targeting the ultra-poor in rural Africa led to an annual per capita increase of US$23.82 in consumption, US$14.94 in assets and US$12.32 in productive cash inflows.

This is according to preliminary results of a new study that suggested that Village Enterprise’s integrated “graduation” model, comprised of targeting, training, mentorship, savings groups, and a modest cash transfer, increased assets and consumption, as well as subjective well-being and nutrition, with a full cost-recovery of the program estimated at three to four years.

Village Enterprise works at the household level with an average size of six people, which translates to an increase of US$142.92 in consumption, US$89.64 in assets and US$73.92 in productive cash flow per family.

Higher consumption included both greater food security and dietary diversity.

“Helping the ultra-poor escape extreme poverty is a global priority, but policymakers are faced with competing ideas about the best way to accomplish this,” said Village Enterprise’s CEO Dianne Calvi.

Dianne Calvi added that despite decades of development work and billions of dollars poured into the region, over half of the world’s extremely poor—a staggering 389 million people—reside in Sub-Saharan Africa.

The results of this study confirm what we have observed for some time at Village Enterprise – that this model is impactful and cost-effective.”

Researchers ran comparisons to evaluate effects of the components of the program on households’ consumption, occupational choice, assets, access to financial services, and savings.

According to Nathanael Goldberg, director of IPA’s Social Protection Program, and a co-author of the 2015 Science paper, “this research helps fill in an important piece of the puzzle in learning how to design scalable programs, showing streamlined approaches to graduation programming can benefit the extreme poor.”

At a time when donors are pulling back on funding international development, and with approximately 10 percent of the world’s population still living on less than US$1.90 a day (2011 PPP), it’s more important than ever to show that money spent to fight global poverty brings results.

The Village Enterprise model costs roughly a third of the least costly graduation program studied. What differentiates this model is that it is shorter, focused on entrepreneurship, and group-based. Village Enterprise starts three-person businesses and delivers training through groups of 30.