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Village Enterprise raises $3.5m to invest into entrepreneurs in Kenya & Uganda

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Village Enterprise has raised $3.5m of working capital to provide first-time entrepreneurs who live in extreme poverty with seed capital, training and mentoring to start more than 4,600 small sustainable businesses in rural Kenya and Uganda by 2020.

Over 760 million people still live in extreme poverty, over half of whom live in sub-Saharan Africa despite decades of development work and billions of dollars expended on the continent and globally. Village Enterprise aims to improve the income levels for these new business owners with this fund.

“Eliminating poverty is a global priority, but funding is limited,” said Village Enterprise’s CEO Dianne Calvi. “Mobilizing private capital is critical if we are to achieve the United Nation’s #1 Sustainable Development Goal (SDG) of ending extreme poverty by 2030.”

Village Enterprise and Instiglio are partnering with private impact investors and the United States Agency for International Development’s Development Innovation Ventures (USAID DIV) and the U.K. Department for International Development (DFID) on the Village Enterprise Development Impact Bond.

Some of nine impact investors, include the Delta Fund, the Laidir Foundation, the Silicon Valley Social Venture Fund, the Bridges Impact Foundation and several individual investors, are providing the working capital for Village Enterprise to equip 13,800 rural Africans who currently live on less than US $1.90 a day with the resources to become successful entrepreneurs.

Read Also: Rwanda, South Africa sign mega dollar deals with China

Outcome funders USAID and DFID will pay Village Enterprise and its investors based on results achieved rather than the traditional model of payment upon program delivery. This pay-for-success model guarantees that donor money will be linked to measurable increases in consumption and net assets (as a proxy for income). This DIB leverages a new and innovative ‘outcomes fund’ hosted by Global Development incubator (GDI), which will hold all funds in escrow and consolidate all contracting, cashflow and processing through a single efficient and scalable platform.

The Bridges Impact Foundation through its philanthropic arm Bridges Fund Management supports a range of solutions to pressing societal challenges, including 27 social impact bonds (SIBs), about half of the total commissioned in the U.K. to date.

Brian and Katie Boland are investing US $1 million in this DIB through their Delta Fund. Village Enterprise’s program includes targeting, training, mentoring, seed capital in the form of cash grants, and saving groups. Village Enterprise was selected by Innovations for Poverty Action through a randomized controlled trial (RCT) of the program that demonstrated increases in assets and consumption, as well as subjective well-being and nutrition, among program participants.

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AfreximBank to train African companies under AfCFTA

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The African Export-Import Bank declared that it would begin a programme of capacity building to enable African companies to capitalize on the advantages of the African Continental Free Trade Area.

The continental bank said in a statement on Wednesday that its academy will oversee the capacity-building initiative in coordination with the AfCFTA Secretariat.

With 54 of the 55 members of the African Union signing the AfCFTA, the number of participating countries makes it the largest free trade area in the world.

According to Afreximbank, the American University in Cairo will work with them to offer the training, slated to take place in September in Cairo, Egypt.

The bank declared that it will concentrate on the AfCFTA’s commercial ramifications and the many opportunities it offers African businesses.

“Afreximbank is a key supporter of the implementation of the AfCFTA, whose focus is on transforming Africa from a fractured, commodity-dependent group of economies to a vibrant, integrated single market of about two billion people with a combined GDP of about $3.4tn,” said Dr. Yemi Kale, Group Chief Economist and Managing Director of Research at Afreximbank, in response to the program.

“In this regard, we believe that well-informed and prepared businesses are key to driving intra- and extra-African trade and investment. Through this training program, which is one of the numerous capacity-building initiatives the Bank has put in place to promote intra- and extra-African trade and investments, we aim to empower African businesses to fully exploit the vast opportunities created by the AfCFTA, thereby enhancing their competitiveness and contributing to sustainable economic growth in Africa.”

Additionally, Tsotetsi Makong, Head of Capacity Building and Technical Assistance at the AfCFTA Secretariat, emphasized the significance of capacity building for the AfCFTA’s successful implementation.

Makong said, “Investing in capacity building for the corporates and SMEs will ensure that home-sourced investments are mobilised and deficits with third country markets reduced, proving the AfCFTA to be the single most important instrument that de-risks the African continent in its entirety when it comes to investments.”

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Ghana: Inflation decreases to 22.8%

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According to the statistics office, Ghana’s consumer inflation decreased for a third straight month in June, falling from 23.1% in May to 22.8% year over year.

Samuel Kobina Annim, a government statistician, stated at a press conference that the June inflation was mostly caused by a decrease in non-food inflation, which fell to 21.6%, sufficient to offset a rise in food inflation.

The West African nation that produces oil, gold, and cocoa is struggling to recover from a financial catastrophe.

Last week, it overcame a significant obstacle to restructure its foreign obligations when its official creditors verified that the suggested debt rework was not unduly advantageous to bondholders.

In Ghana, the rate of inflation was approximately 9.98 per cent higher than the previous year. By 2029, inflation in Ghana is expected to have dropped to 8% from its peak of about 17.5% in 2016.

Economists say that a stable economy of a nation should aim for a constant inflation rate of two to three per cent. The rise in consumer goods and services prices over a specific period is known as inflation.

Excessive money supply is often the cause of high inflation rates, which can lead to hyperinflation—that is, inflation that happens too quickly and swiftly, devaluing currency and even triggering a recession or even an economic collapse.

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