Independent Rigorous Evaluations

The Village Enterprise RCT

This RCT tested the Village Enterprise program’s impact on extremely poor households compared to a control group. The research was meant to add to the overall body of knowledge on the graduation program by contributing evidence from a new country, evaluating a lighter-touch group-based variant of the graduation model, benchmarking the graduation approach to unconditional cash transfers, and assessing the marginal impact of savings groups, as well as to guide future refinements of our model.

Independent researchers worked with Village Enterprise to identify more than 6,378 of the poorest households across 138 villages in rural Uganda and then randomly assigned eligible households to one of six groups: the full graduation program, the graduation program minus the savings group, unconditional cash transfers, unconditional cash transfers combined with a behavioral/mindset intervention, a variation of the full program called Business in a Box, and a control group which received no intervention for comparison purposes.

Data from Village Enterprise’s RCT shows:

• Village Enterprise’s microenterprise graduation program led to increased consumption, assets, and income, as well as improvements in nutrition and subjective well-being.
• Cost-effectiveness appears high: researchers estimate a full cost recovery within three to four years.
• A cost-equivalent cash transfer appeared to have less promising medium-term impacts on poverty reduction and subjective well-being than the microenterprise program, though estimates are more ambiguous.
• Overall, the results suggest that training and mentorship components of integrated poverty alleviation programs are sensible and cannot simply be removed (or substituted for cash transfers).
• More research is needed on the issue of scaling the program while maintaining its quality.

To learn more, see IPA’s “Variations of Ultra-Poor Graduation Programming in Uganda,” describing findings from the RCT. The final paper, “Cash-plus: Poverty impacts of alternative transfer-based approaches” by Sedlmayr, Richard, Anuj Shah, and Munshi Sulaiman, was published in the Journal of Development Economics May 2020.

Positive results on the implementation of the poverty graduation model in six countries published in Science magazine and highlighted by The New York Times in 2015 created a new awareness about the potential that poverty graduation programs offer for alleviating extreme poverty.

The RCT results were used as the benchmarks for the Village Enterprise Development Impact Bond (DIB).