As part of our ongoing series on social entrepreneurship with, in partnership with ImpactAlpha, this week’s spotlight is on Village Capital. This startup accelerator is banking on the idea that the best solutions to community problems come from local entrepreneurs who have firsthand knowledge of the challenges being addressed.

Village Capital is specifically focused on the difficulties facing the “unbanked” and “underbanked,” which are terms used to define an individual or household that has a bank account but also uses alternative financial services (AFS). Examples of AFS include: payday loans, rent-to-own agreements, money orders, car title loans, etc. While some AFS have been developed to help those who are underserved by traditional lending services, many are characterized by short-term repayment schedules and generally have very high interest rates. These qualities make them less than ideal lending options for entrepreneurs who are considered too risky for traditional bank loans and credit, thus leaving them with few opportunities when seeking startup capital.

To tackle this lending challenge, Village Capital is recruiting minority and women entrepreneurs from unbanked and underbanked communities. They are then exposing these entrepreneurs’ marketable ideas to venture capital funding—to which these nontraditional entrepreneurs would otherwise have limited access This allows for the development of businesses that are potentially both lucrative and effective at changing the dynamics around opportunities for people who struggle to access necessary financial services.

While many categorize these programs as impact investments, Ross Baird, executive director of Village Capital, explains that his organization’s investors do not usually self-identify as impact investors. A number of those whom they invest with believe that impact investments require conceding some financial returns for social impact—and that is not the case here. Despite the obvious positive social outcomes Village Capital’s entrepreneurs deliver, its investors first, recognize the fundamental value of exciting, smart investments with the potential for consistent and/or impressive returns. Through events like the FinTech Forum, Village Capital continues to introduce investors to opportunities that generate greater outcomes with their dollars. At these forums the stage is given to nontraditional entrepreneurs, like Brian Ferguson of Start Line, who translated a wrongful imprisonment that could have destroyed his professional future, into a powerful startup that has the potential to counter recidivism issues.

For more on Village Capital and the entrepreneurial solutions to the financial and community challenges it promotes visit the impact investing hub.