Evaluating the Village Enterprise Development Impact Bond

Village Enterprise business groups pose with their cash disbursements after a community event.

Village Enterprise business groups pose with their cash disbursements after a community event.

Despite decades of development work and billions of dollars expended, over 760 million people still live in extreme poverty, with over half in sub-Saharan Africa. Village Enterprise offers a household graduation program where they provide first time entrepreneurs with inputs such as seed capital, training, and mentoring. The goal is for these households to start sustainable businesses, grow their income and elevate themselves out of poverty.

Village Enterprise, IDinsight, Instiglio, USAID, and DFID are partnering together on the Village Enterprise Development Impact Bond to impact over 12,000 households in Kenya and Uganda. The outcome payers, USAID and DFID, will pay Village Enterprise and its investors based on results achieved rather than the traditional model of program delivery to guarantee that donor money is linked to measurable increases in consumption and net assets (as a proxy for income).

IDinsight is designing and implementing a randomized control trial (RCT) to independently and rigorously measure the impact of Village Enterprise’s poverty alleviation efforts to ensure that DIB payments are tied to robustly measured outcomes. IDinsight is further responsible for independently verifying the cash transfer component of VE’s program. IDinsight will evaluate seven cohorts of the household graduation program over four years.

Read Instiglio’s recent Process Review of the Village Enterprise DIB and IDinsight’s contribution including:

IDinsight made strong contributions to evaluation design debates. USAID noted their satisfaction with IDinsight’s ability to clearly show trade-offs between price and evaluation design components, including how large a sample size could be reached for the evaluation budget. Similarly, DFID praised IDinsight’s ability to present clear insights as stakeholders debated the evaluation design and what was needed.”

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