It has been 30 years since the tragic 1994 Rwandan genocide, and Rwanda is still reeling from its aftershocks. The conflict, which claimed 800,000 civilian lives and displaced 1.5 million people, left the country’s infrastructure in ruins, with homes, schools and medical centers reduced to rubble. That year, the United Nations (U.N.) reported that the poverty rate in Rwanda peaked at 78%, rendering a significant portion of the population unable to afford necessities. Today, nearly half of all Rwandans live below the poverty line and 16% are in extreme poverty. Yet, despite these grim statistics, hope is on the horizon for sustainable economic growth.
A Strategic Partnership
The Government of Rwanda seeks to eradicate extreme poverty by 2030. A strategic partnership with civil society organizations, such as the U.S.-based NGO Village Enterprise, could support this goal. Village Enterprise specializes in entrepreneurial training in rural Africa, equipping aspiring business owners with the necessary skills and capital to get their ideas off the ground.
In the next few years, its work in Rwanda will offer more than 31,000 participating households training, startup cash ($180 per small business group of target size three households) and business mentoring to support the launch of enterprises like hairdressing, farming and bicycle repair. As such, the program is a critical component of the government’s effort to reduce unemployment and boost the national standard of living.
Village Enterprise’s Poverty Graduation Approach
Village Enterprise’s poverty graduation approach has already shown significant success. This model, designed to lift individuals from extreme poverty and give them the tools to achieve financial independence, is a game-changer. Many beneficiaries, particularly women, who comprise 82% of the program, have reported a substantial increase in income, improved living conditions and a newfound sense of agency.
Celeste Brubaker, Chief of Impact and Innovative Financing at Village Enterprise recounts speaking with program participants indelibly proud of the progress they have made and the lives they have built: “The entrepreneurs often explain how their businesses have empowered them to achieve goals such as improving their diets, sending their children to school or upgrading their homes.” Stories like these underscore the people-centered mission at the heart of the fight against extreme poverty and emphasize its outsize impact.
Bellancile’s story is a testament to the program’s efficacy. Bellancile, 42, of Butare, Rwanda, shares: “I used to believe that a woman eats because her husband works, but now I’m the one feeding my family.” Bellancile’s experience is among many. Since Village Enterprise established its presence in Rwanda in 2021, nearly 14,000 entrepreneurs and 6,000 new businesses have emerged from its entrepreneurial program, with the figures to increase in the next couple of years.
A New and Promising Contribution
On July 17, 2024, the Fund for Innovation and Development (FID), an independent body hosted by the French Development Agency (AFD), issued a $1.3 million grant to Village Enterprise. These funds, combined with a $6.5 million grant awarded to the organization by the United States Agency for International Development (USAID) last year, will cofinance its initial scaling work in Rwanda.
Village Enterprise is also partnering with the Rwandan government to extend the program’s reach, seeking to raise an additional $22 million to establish an outcomes fund, which Brubaker believes will “incentivize service providers who effectively support communities and discourage participation from less effective organizations.” Increasing the organization’s capacity beyond its current operations in four Rwandan districts could enable its entrepreneurial training to serve an additional 125,000 households by 2027.
Navigating the Challenges
Overall, the country’s economic outlook is positive. The World Bank reported a 7.6% growth in gross domestic product (GDP) for the first three quarters of 2023 and anticipates significant gains in the next two years. Village Enterprise’s entrepreneurial program has played a role in the country’s economic recovery. However, challenges persist, including external shocks, limited resources, ineffective sequencing, difficulties in impact measurement and disjointed coordination.
Despite the obstacles, though, Jean Pierre Sibomana, Village Enterprise’s Rwanda Scaling Project Director, points to reasons to be optimistic: “The country is focused on sustaining livelihoods through initiatives like Ejo Heza, a pension program for especially those working in the informal sector, as well as job creation and the development of the education sector… It’s a long journey, but looking at how committed the government is, it presents hope.” Indeed, Village Enterprise’s entrepreneurial training program, bolstered by philanthropic contributions, may prove a linchpin of the government’s efforts to eradicate extreme poverty in the near future.
Maurice Nirere, Village Enterprise’s Senior Manager of Monitoring and Evaluation in Rwanda, recommends other pan-African governments follow suit. He emphasizes the importance of international collaboration, stating that by “putting in place well-designed strategies and anti-poverty policies, [governments can demonstrate] a political willingness to combat poverty and [create] a room to collaborate with international agencies.” This call for global collaboration makes aid agencies and governments part of a shared mission and fosters a sense of shared responsibility.
Looking Ahead
Village Enterprise’s progress in Rwanda has made a tangible impact, changing lives and stabilizing rural areas embroiled in extreme poverty. Emerance of Rulindo, Rwanda, has forged a path to success and independence with the organization’s support. She and her business partners, Lucie and Domithile, are now not merely surviving but providing for their families in ways they never imagined possible. Their tenacity and even the name of their business, “Bright Future,” signal prosperous days ahead for thousands across Rwanda.
– Natalie Kaufman
Natalie is based in Orlando, FL, USA and focuses on Business and Good News for The Borgen Project.
Photo: Flickr