Impact-Focused Financing to End Poverty in Rwanda

Summary

In 2025, Village Enterprise, in partnership with the government of Rwanda and Fund for Innovation in Development, committed to launching a national initiative to scale Rwanda’s Strategy for Sustainable Graduation. This initiative will directly support 116,000 households to graduate from extreme poverty across at least six districts over three years, laying the foundation to reach up to 700,000 households by 2030 and contribute to Rwanda’s Vision 2030 goal of reducing extreme poverty to below 1%. The government of Rwanda will drive implementation of entrepreneurship-focused poverty graduation through its network of parasocial workers—trained by Village Enterprise to deliver a cost-effective, evidence-based, and impactful approach. Village Enterprise will leverage an outcome-based funding model to scale implementation of poverty graduation by civil society organizations, enabling diverse service providers to expand their reach. This initiative will serve as a replicable blueprint for other African governments.

Approach

Village Enterprise (VE) commits to supporting the Government of Rwanda’s goal of transforming its poverty alleviation architecture- making it more outcome-focused, responsive, and equipped to deliver on the country’s bold vision for sustainable graduation. In partnership with the Government of Rwanda (GoR) and the Fund for Innovation in Development (FID) VE will support the graduation of 116,000 households from extreme poverty across at least six districts over three years, laying the foundation to reach up to 700,000 households by 2030 and contribute to Rwanda’s Vision 2030 goal of reducing extreme poverty to below 1%.
The initiative will be implemented through two complementary approaches, leveraging the strengths of both government and civil society. This dual model reflects the GoR’s recognition that national scale and sustainability require a whole-of-society effort: government systems offer long-term infrastructure, while civil society organizations (CSOs) bring agility, innovation, and additional delivery capacity:
A) A government-led approach, funded directly by the GoR leveraging World Bank financing, in which parasocial workers implement graduation through government systems, promoting sustainability, national ownership, and large-scale reach.

B) A civil society-led and impact-focused delivery model, using outcome-based financing to further scale graduation, aligning stakeholders around government priorities. It will ensure accountability and effective spending, while enabling CSOs to expand their impact.
With catalytic funding from FID, VE will contribute its expertise in results-based financing and provide technical assistance toward designing and implementing entrepreneurship-focused poverty graduation programs. Drawing from a rigorously tested approach with up to a 5.34x benefit-cost ratio, VE will support the GoR in strengthening systems to manage and scale the NSSG, including a Management Information System to track delivery. The GoR will lead implementation via parasocial workers and policy integration, jointly coordinating with VE to test and expand this outcomes-driven model through CSOs, fostering local adaptation.
Together, this initiative will help position Rwanda as a global leader in government-led, outcomes-driven poverty eradication, offering a replicable model for other countries.

Action Plan

Phase 1 A: Design, Planning, and Alignment of GoR poverty graduation implementation (October 2025 – March 2026) Village Enterprise and the Government of Rwanda (GoR) will finalize the expansion plan of poverty graduation implementation by parasocial workers in four districts (Rulindo, Gicumbi, Nyagatare, and Burera) . Village Enterprise will provide technical assistance to GoR and will lead the capacity building of parasocial workers at the field level.
Phase 1 B: Design, Structuring and Fundraising for the Outcomes fund (October 2025 – March 2026) CSOs will be engaged and preselected, and an outcomes fund will be structured, securing outcome funding and working capital from public and philanthropic sources. Outcome metrics and verification protocols will be defined and validated.
The Management Information System (MIS) will be deployed across pilot districts, with training provided to GoR staff and parasocial workers, and CSO partners.
Phase 2: Implementation (April 2026 – June 2027) Implementation will begin in the four districts through GoR-trained parasocial workers, while CSOs will launch graduation programs under outcome-based contracts. Working capital will be disbursed to CSOs, and baseline data collection will commence.
Phase 3: Expansion and Impact (July 2027 – September 2028) Implementation will scale to six districts (two new districts in addition to Rulindo, Gicumbi, Nyagatare, and Burera) , with ongoing support for parasocial workers and CSOs. Outcome payments will be triggered based on verified results. The final phase will focus on completing outcome verification, conducting a final impact assessment, and developing a national scale-up plan with GoR based on performance and lessons learned.

Background

Despite Rwanda’s progress in economic development and social protection, extreme poverty remains a widespread challenge. Using the international poverty line of $2.15 per day (2017 PPP) , the World Bank estimated in 2023 that 47.4% of the Rwandan population lived in extreme poverty (World Bank, 2023) . Rural households are disproportionately affected, hindered by limited livelihood opportunities, low asset ownership, and financial exclusion.
To address this, the Government of Rwanda (GoR) aims to reduce extreme poverty to below 1% by 2030. Central to this ambition, is the National Strategy for Sustainable Graduation (NSSG) , which builds on global evidence that poverty graduation programming can achieve sustained, cost-effective impact, as shown in the World Bank’s State of Economic Inclusion Report 2024: Pathways to Scale, which synthesizes results from over 400 programs across 88 countries. However, implementation has faced persistent challenges: constrained public budgets, fragmented donor funding, and reliance on input-based financing models that prioritize financial compliance over results.
Without systems that link funding to outcomes, service providers lack incentives to innovate or adapt programs to local needs. Civil society organizations (CSOs) and local governments—critical actors in delivering community-based solutions—often operate without the flexible resources or robust data systems needed to track progress, learn, and improve. As a result, Rwanda’s national graduation agenda risks falling short of its potential for transformative, scalable impact.
Embedding outcomes-based financing (OBF) into NSSG implementation directly addresses these bottlenecks. By shifting focus from inputs to outcomes, OBF aligns public, philanthropic, and private capital around verified impact. This approach creates powerful incentives for collaboration, cost-effectiveness, and accountability. It also strengthens local ownership by empowering frontline actors with the resources and flexibility to deliver impact, while generating the data needed to guide adaptive management and policy.

Progress Update

Partnership Opportunities

Village Enterprises is seeking additional partners and resources, including Outcome funding from philanthropic donors, public sector partners, and impact investors to finance performance-based payments, working capital from catalytic grants or concessional loans to support CSO implementation, and media and communication support to amplify results, share lessons, and drive awareness.,Village Enterprise (VE) and its partners offer extensive expertise in poverty graduation, results-based financing, and government-led social protection. Through this initiative, VE provides a structured outcomes fund that enables cost-effective implementation of graduation programs by civil society organizations (CSOs) . This model ensures that funding is tied to verified results, incentivizing CSOs to deliver high-impact, scalable solutions while maintaining accountability. VE also offers comprehensive training for local government staff (parasocial workers) , a robust Management Information System (MIS) for real-time data tracking, and a platform for collaborative learning among CSOs. Partners benefit from best practice examples, technical guidance, and opportunities to test and scale innovative approaches to poverty reduction.