Catherine Cheney and Sara Jerving in February 2018 explain how Result-Based Finance can improve more than 156,000 people in Kenya and Uganda. Instiglio designed, with Village Enterprise, a Development Impact Bond that seeks to reduce poverty through entrepreneurship and innovation.
Village Enterprise plans to use the funds from the DIB, which was designed to demonstrate a cost-effective pathway to scale for graduation programs, to start some 4,000 micro-enterprises over the next three and a half years. Under the arrangement, the U.S. Agency for International Development’s Development Innovation Ventures, the United Kingdom’s Department for International Development, and an anonymous funder, pay back investors the original investment plus interest, if outcome targets are delivered.
This funding mechanism gives Village Enterprise access to a larger pool of capital that is more flexible than what they might receive through more traditional grants.
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