Low-income people face economic turmoil in the wake of the pandemic.

Only half of people worldwide have any savings.

Extreme weather affects the poorest households most.

Low-income farmers need new tools to feed their communities.

The world’s entrepreneurs face a $5 trillion financing gap.

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Michael Schlein

Article

March 6, 2023

To whom it may concern,

I am writing today in my capacity as President and CEO of Accion, a global nonprofit on a mission to create a fair and inclusive economy, to express our support for the nomination of Ajay Banga as the next President of the World Bank.

I have known Ajay for more than 20 years. Our paths first crossed when we were both senior executives at Citigroup. Together, we served on the board of the Citi Foundation, where upon joining the board, he spoke passionately of his belief that our $100M of annual giving should focus firmly on women’s financial empowerment to help end global poverty. Ajay influenced the way we deployed our resources for greater impact. Over the years, I have had many in-depth conversations – both privately and in front of audiences – and I know of no other global CEO who can speak with such knowledge and passion for financial inclusion. And he’s matched this commitment by directing resources to support this work throughout his career.

Ajay is a firm believer in shared solutions to global problems. He recently co-founded the Partnership for Central America, of which Accion is a member. The organization is already delivering tangible solutions to tackle climate change and other drivers that are forcing vulnerable communities to migrate, leveraging a substantial network of private sector and nonprofit partnerships.

At Mastercard, he set up the Center for Inclusive Growth, leveraging the company’s core assets and competencies, including data insights, expertise, and technology, and establishing the Mastercard Impact Fund to advance equitable and sustainable economic growth and financial inclusion around the world. The Center’s programs help power small businesses around the world, increasing the financial security and economic mobility of millions of people globally.

With global poverty on the rise for the first time in decades, the World Bank needs a leader who will be a champion for shared prosperity and a driver of change within the organization. Ajay has consistently shown that he has a vision for transformative change. He also has the skills and expertise to make that vision reality. In my several years leading Human Resources at Citi, I did not see a better manager. He excels when helping institutions transform, and as the World Bank resets itself to lead on the climate crisis and other global challenges, it will be well-served with Ajay Banga as its President.

Throughout his career, Ajay has shown that the entities he leads can serve as a force for good – catalyzing action across the private sector, governments, international institutions, and civil society. I believe he has what it takes to deliver lasting change at the World Bank, and look forward to him being selected as its next President.

Respectfully,

Michael Schlein

President and CEO

Accion

Open letter in support of Ajay Banga

Liza Curcio-Rudy

Resources for early-stage startups to take a gender-inclusive approach to hiring, fundraising, governance, and more

Our portfolio engagement team has published more than 30 resources to help early-stage fintech founders build strong teams and sustainable, impactful businesses. While the availability of high-quality content for startup founders has ballooned in recent years, few resources acknowledge the unique needs that women and other underrepresented founders, employees, and end-customers have; moreover, these resources are not specifically catered to fintech startups. That’s why we’ve refreshed five previously published resources to incorporate a perspective on the role that gender plays in hiring, fundraising, governance, and more. Here are the five resources we’ve decided to republish and why:  
<h3><a href="https://content.accion.org/wp-content/uploads/2023/03/Best-Board-Practices.pdf" target="_blank" rel="noopener noreferrer">How to leverage a startup board</a></h3>
Board diversity has taken center stage over the last couple of years, with new mandates emerging (and in some cases repealed) across <a href="https://www.gibsondunn.com/sec-approves-new-nasdaq-board-diversity-rules/" target="_blank" rel="noopener noreferrer">NASDAQ</a>, the <a href="https://www.nytimes.com/2022/05/19/business/california-board-diversity-women.html#:~:text=Introduced%20in%202018%2C%20S.B.%20826,to%20comply%20risked%20financial%20penalties." target="_blank" rel="noopener noreferrer">State of California</a>, <a href="https://www.cnbc.com/2020/01/23/goldman-wont-take-companies-public-that-dont-have-at-least-one-diverse-board-candidate-ceo-says.html" target="_blank" rel="noopener noreferrer">Goldman Sachs</a>, and other entities. While studies have shown that diverse boards outperform those lacking in diversity, most startup board members are venture capitalists, which are 85 percent white and male. With that in mind, how can founders go about crafting a representative board, and why should they? <a href="https://content.accion.org/wp-content/uploads/2023/03/Best-Board-Practices.pdf" target="_blank" rel="noopener noreferrer">We’ve updated this resource</a> to tell you just that.  
<h3><a href="https://content.accion.org/wp-content/uploads/2023/03/Equity-fundraise-guide.pdf" target="_blank" rel="noopener noreferrer">Series A fundraise guide</a></h3>
It’s well-documented that women face outsized challenges raising venture capital. They often start with smaller investor networks, <a href="https://hbr.org/2017/06/male-and-female-entrepreneurs-get-asked-different-questions-by-vcs-and-it-affects-how-much-funding-they-get" target="_blank" rel="noopener noreferrer">get asked different questions</a>, and encounter other biases as they navigate the fundraising process. In the eight women-focused events we’ve hosted with more than 80 women fintech founders attending from around the world, we’ve also seen that many women founders tend to emphasize their traction to date rather than their long-term vision. At the seed stage, while traction is useful, it’s critical for founders to communicate the opportunity in front of them effectively. <a href="https://content.accion.org/wp-content/uploads/2023/03/Equity-fundraise-guide.pdf" target="_blank" rel="noopener noreferrer">We’ve updated our original resource</a> to acknowledge these obstacles and provide guidance on how to navigate them.   
<h3><a href="https://content.accion.org/wp-content/uploads/2023/03/Hiring-Resource.pdf" target="_blank" rel="noopener noreferrer">Hiring manager guide</a></h3>
A growing body of research has shown that when team members bring diverse backgrounds and perspectives to the table in an inclusive environment, their companies make <a href="https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/delivering-through-diversity" target="_blank" rel="noopener noreferrer">better decisions and generate more revenue</a> than homogenous competitors. Diversity doesn’t just happen, though. It takes ample and sustained commitment from leadership. We often see early-stage founders prioritize speed in the hiring process, assuming that they can tackle diversity at a later stage. Over time, though, as teams codify their values and establish norms, it becomes <a href="https://builtin.com/diversity-inclusion/small-business-diversity-and-inclusion-hiring-strategy" target="_blank" rel="noopener noreferrer">more</a> and <a href="https://www.wired.com/2017/03/welcome-to-diversity-debt-the-crisis-that-could-sink-uber/" target="_blank" rel="noopener noreferrer">more</a> difficult to attract and support heterogeneous candidates. That said, how can startup founders ensure that their hiring processes are equitable from the start? Read <a href="https://content.accion.org/wp-content/uploads/2023/03/Hiring-Resource.pdf" target="_blank" rel="noopener noreferrer">this addendum</a> to our hiring manager guide for five suggestions. Remember, though, hiring is only one piece of the puzzle for ensuring that diverse teams thrive in the workplace.  
<h3><a href="https://content.accion.org/wp-content/uploads/2023/03/How-to-successfully-launch-an-employee-engagement-survey.pdf" target="_blank" rel="noopener noreferrer">How to launch an employee engagement survey</a></h3>
Over the last decade, we’ve worked with multiple portfolio companies to conduct, analyze, and interpret employee engagement surveys. Regardless of the results, these surveys help founders understand employee sentiment and identify concrete steps to strengthen company culture. However, employees of different genders often experience their workplaces differently. In <a href="https://content.accion.org/wp-content/uploads/2023/03/How-to-successfully-launch-an-employee-engagement-survey.pdf" target="_blank" rel="noopener noreferrer">this</a> resource, we’ve added a survey question on <a href="https://content.accion.org/wp-content/uploads/2023/03/Hiring-Resource.pdf">Hiring Resource</a>employee gender, allowing founders to disaggregate data on employee happiness within the workplace and determine whether there are disparities across gender lines.  
<h3><a href="https://content.accion.org/wp-content/uploads/2023/03/Operational-Metrics-Reporting.pdf" target="_blank" rel="noopener noreferrer">Operational metrics and reporting</a></h3>
Women continue to be disproportionately excluded by the formal financial system. In developing economies, they’re <a href="https://globalfindex.worldbank.org/sites/globalfindex/files/2018-04/2017%20Findex%20full%20report_0.pdf" target="_blank" rel="noopener noreferrer">9 percent less likely than men to have a bank account and, while women-owned businesses make up 23 percent of all MSMEs, they account for 32 percent of the financing gap.</a> This presents a massive opportunity for fintechs that are able to connect with women effectively. To reach more women customers, startup founders need to understand how certain operating metrics vary across gender lines. For example, are your women customers all coming from specific marketing channels? How do customer acquisition costs and lifetime value differ between men and women? Startups that can answer these questions (among others) will be best positioned to serve more women. 

We hope these resources will help early-stage founders adopt gender-inclusive practices that strengthen their teams and deepen their impact. Feel free to pass them over to your portfolio companies, team members, and any other stakeholders willing to take more action toward gender inclusivity in their companies. To learn more about Accion Venture Lab, follow us on <a href="https://twitter.com/AccionVLab" target="_blank" rel="noopener noreferrer">Twitter</a> and <a href="https://www.linkedin.com/showcase/accion-venture-lab/" target="_blank" rel="noopener noreferrer">LinkedIn</a>.

Five ways for fintech startups to build gender inclusivity

Elizabeth Winters

jihan

<img class="alignleft wp-image-27806" src="https://content.accion.org/wp-content/uploads/2023/03/jihan-abass-founder-ceo-lami.jpg" alt="Jihan Abass, Lami" width="400" height="600" srcset="https://content.accion.org/wp-content/uploads/2023/03/jihan-abass-founder-ceo-lami.jpg 750w, https://content.accion.org/wp-content/uploads/2023/03/jihan-abass-founder-ceo-lami-200x300.jpg 200w, https://content.accion.org/wp-content/uploads/2023/03/jihan-abass-founder-ceo-lami-683x1024.jpg 683w" sizes="(max-width: 400px) 100vw, 400px" />Jihan Abass comes from a family of entrepreneurs, setting her on a path to become an entrepreneur herself from an early age. After beginning her career in finance in London, she returned home to Kenya and launched Lami in 2018. Lami, <a href="/tech-opens-the-door-for-low-income-africans-to-get-the-insurance-they-need" target="_blank" rel="noopener">an Accion Venture Lab portfolio company</a>, is an embedded fintech company that provides affordable, accessible insurance products to underserved people across Africa through partner platforms.
On founding <a href="https://www.lami.world/" target="_blank" rel="noopener">Lami</a>, she says, “My main motivation is the fact that a lot of people don&#8217;t have access to insurance products in Africa. A few years ago, I had a conversation with a waiter who told me he didn&#8217;t have medical insurance, and that got me thinking about the insurance space.” She started researching and realized there was a lack of technological infrastructure to distribute insurance products widely and affordably. “I think insurance is one part of financial inclusion that has really been ignored. It brings about a lot of security because here in most of Africa, people rely on single sources of income,” she says. <a href="https://www.accion.org/digital-insurance-offers-security-for-underserved-communities-in-africa" target="_blank" rel="noopener">Lami leverages technology to close those gaps</a> and give people access to the safety net that insurance can provide during illness, accidents, and other disruptions to their income.
Because many people distrust insurance, Jihan and her team stress the importance of building confidence and trust in their customer journey. They’ve found the best way to do that is to <a href="/improving-lives-with-digital-insurance-jihan-abass-lami" target="_blank" rel="noopener">embed their services into apps and interfaces</a> that people already use daily, so they can access Lami’s products through providers they already have a trusted relationship with, including banks, telcos, e-commerce platforms, and logistics companies.
“I think innovation is the backbone of what we&#8217;re doing here,” says Jihan. “We&#8217;re trying to transform how people get access to insurance products. We&#8217;ve digitized the entire value chain, something that hasn&#8217;t really been done in the past. We’re building the infrastructure and the rails for others to quickly launch products through their channels. To be able to overcome some of the hurdles in terms of how people view insurance, you need to have a product that is different, and that has a lot of impact and value.”
On her entrepreneurial journey, Jihan says, “I think being a female founder is unfortunately quite rare in most of Africa, and probably most of the world. It&#8217;s been an interesting experience being a female founder. In general, I would say that, despite the biases, a lot of people are really excited about seeing women leading companies, which has been very positive.” Lami’s team is 55, and Jihan is determined to attract and mentor young women and encourage them to grow within the company. “That&#8217;s a big indication of how we&#8217;re trying to support and cultivate young talent. Providing opportunities is one of the best ways that we can have a gender balance.”
“In the future, our goal is to be the leader in digital insurance. And not just in Africa but the rest of the developing world because we often face similar problems. We’re pushing the boundaries within the insurance space so we can have a transformative effect on the whole industry.”

sandra

<img class="alignleft wp-image-27807" src="https://content.accion.org/wp-content/uploads/2023/03/sandra-calderon-accion.jpg" alt="Sandra Calderon, Accion" width="400" height="600" srcset="https://content.accion.org/wp-content/uploads/2023/03/sandra-calderon-accion.jpg 750w, https://content.accion.org/wp-content/uploads/2023/03/sandra-calderon-accion-200x300.jpg 200w, https://content.accion.org/wp-content/uploads/2023/03/sandra-calderon-accion-683x1024.jpg 683w" sizes="(max-width: 400px) 100vw, 400px" />Sandra Calderon is the Digital Strategy and Channels Director for Latin America, part of the <a href="/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener">Accion Global Advisory Solutions</a> team. She supports microfinance institutions and banks across Latin America to help them design, implement, and manage their digital financial service channels. She brings many years of experience in the commercial banking sector to <a href="/bio/sandra-calderon" target="_blank" rel="noopener">her role at Accion</a>. “When I was offered this opportunity to do something really tangible for low-income people, it was very exciting for me, and I immediately identified with it.”
Since then, she has managed a wide range of projects, like supporting institutions in adopting new channels such as ATMs, mini-branches, mobile banking, and agent networks – <a href="/the-digital-solution-for-small-business-owners-in-ecuador" target="_blank" rel="noopener">bringing life-changing financial tools to people across Latin America</a>, including Chile, Colombia, Dominican Republic, Ecuador, Nicaragua, Peru, and El Salvador. She’s passionate about building digital products and services that are easy to use, intuitive, and affordable so that all women can benefit from using them, no matter their level of experience using digital technologies.
Sandra emphasizes that innovation should always factor in an understanding of the realities that women face, and we must design tools from the perspective of women. “No one understands better the journey of a mother at home than another mother in charge of her home. Often, women must take care of their children while they are using digital products or services. For many, it’s also a great challenge to help their children with their homework using the internet or applications that schools use today. It’s necessary to provide learning spaces that make them feel proud of their achievements, build their confidence, empower them to become economically independent, and teach them to create new opportunities for themselves and their families.”
In many communities, women must divide their time between taking care of their family and earning a living, either because they are the heads of their household or because their economic dependence on their partner limits their autonomy. “The role of women in society is critical. We must facilitate their work by providing them with better tools to manage their households, start businesses, and earn a living for their families, including both financial and non-financial products and services,” says Sandra.

Part of Accion’s annual series highlighting women working in financial inclusion

The United Nations theme for International Women’s Day this year is <a href="https://www.un.org/en/observances/womens-day" target="_blank" rel="noopener noreferrer">DigitALL: Innovation and technology for gender equality</a>, a celebration of women who are “championing the advancement of transformative technology and digital education.” With innovative digital tools, we can reach more women with the financial services they need to strengthen their livelihoods and build a better future. This year’s day of observance also recognizes the impact of the digital gender gaps and their potential to leave women further behind, both economically and socially.

In our <a href="/series/women-of-accion" target="_blank" rel="noopener noreferrer">annual blog series featuring women leaders of Accion and our partners</a>, we’re highlighting inspiring leaders who bring passion and creativity to their vision of building a better world for all people. You can learn about more inspiring women in <a href="/women-leaders-innovate-for-a-more-equitable-world-part-two" target="_blank" rel="noopener noreferrer">our second article in this series</a>.

Meet some of the women we’re proud to work with:
<h2>Erika Eurkus, Vice President, Resource Development at Accion</h2>
[caption id="attachment_27805" align="alignleft" width="400"]<img class="wp-image-27805" src="https://content.accion.org/wp-content/uploads/2023/03/erika-eurkus-abf-colleagues-south-africa.jpg" alt="Erika Eurkus and program partners" width="400" height="600" /> Erika (left) with Accion program partners in South Africa[/caption]

Erika Eurkus’ relationship with Accion goes back two decades, spanning both US and global work and several different programmatic efforts — from working with peer loan groups and developing individual loan products to raising loan funds and launching corporate partnerships. Now she works with Accion’s engaged and passionate donors who share our values and propel our mission forward.

Erika started her career in her hometown of Boston, Massachusetts. “In my heart, I always knew I would eventually have a career with a purpose, especially one focusing on social justice,” she says. “After graduating from college, I accepted a position as an AmeriCorps VISTA volunteer for a domestic microcredit organization. And my career working to create economic opportunity was launched far sooner than I had expected — and right in my own backyard.” Erika worked as a loan officer and program manager for small business lenders Working Capital and then Accion USA (now Ascendus). “Working directly with small business owners opened my eyes to the vast disparities that exist in access to capital, and I knew I could have a great impact in harnessing increased resources for our clients.” 

In her current role as Vice President for Accion’s Resource Development team, <a href="https://www.accion.org/bio/erika-eurkus" target="_blank" rel="noopener noreferrer">Erika Eurkus</a> oversees individual philanthropy, helping Accion further our work to bring opportunity to low-income people worldwide. “We must keep building public-private partnerships locally and globally to impact maternal health, early childhood education, and a financial system that works for everyone,” she says.   

While Erika is energized by the rapid pace of digitization in financial services, she recognizes the reality that profound inequalities in society have contributed to fewer opportunities for women and a resulting loss of economic productivity. “To reach equity, we must continuously generate bold ideas, creative thinking, and action. We can’t quiet any voice who has something to say. And, of course, partnerships – shared values and common goals – can achieve so much and are key to our work at Accion,” says Erika, reflecting on some of the partnerships she’s helped develop over the years. For example, the Brewing the American Dream partnership between Samuel Adams and Accion Opportunity Fund, a program designed to provide food and beverage entrepreneurs with the resources they need to succeed — including many businesses run by women and people of color who are often shut out of the formal financial system. 

To others who are looking to make an impact, Erika says, “Opportunities to have an impact abound in today’s fast-moving economies. When I studied economics, the only mention of social impact was through optional reading, which happened to lead me to a short Economist piece on microfinance. Today, myriad non-profits, companies of all sizes, and hybrid organizations are focused on some element of impact. The key is to find a connection to a cause that is meaningful to you and seek out an opportunity within that field that provides learning, growth, and the chance to effect change.”

Women leaders innovate for a more equitable world, part one

This blog is co-authored by <a href="https://www.mastercardcenter.org/our-team/shamina-singh" target="_blank" rel="noopener noreferrer">Shamina Singh</a>, Founder and President of Mastercard Center for Inclusive Growth.

After many years of little progress, we’re finally narrowing the gender gap in financial account ownership. According to the most recent <a href="https://www.worldbank.org/en/publication/globalfindex/Report" target="_blank" rel="noopener noreferrer">Findex</a>, the gap narrowed from 9 percent to 6 percent across developing economies as more women gained access to financial tools.

But a large portion of that progress was due to one country: India. If you remove India’s progress, much of the developing world has a double-digit gender gap, and globally women are still more likely than men to be unbanked. About 740 million women—13 percent of all adults globally and 54 percent of the unbanked—don’t have a financial account. We need to do a better job.
<blockquote class="blockquote">Today, women continue to deal with discrimination and restrictive social norms, making it much harder to access capital, skills, and resources. Rising prices, disrupted supply chains, and increasing demand for digital services are adding new challenges.</blockquote>
These barriers help explain why women entrepreneurs faced the most <a href="https://www.centerforfinancialinclusion.org/preparing-msmes-for-future-crises-lessons-from-covid-19" target="_blank" rel="noopener noreferrer">severe effects</a> of the global pandemic, including higher rates of business closure and lower profit levels. Digital tools can make it easier to adapt and recover, but <a href="https://www.centerforfinancialinclusion.org/digital-adoption-of-msmes-during-covid-19" target="_blank" rel="noopener noreferrer">digital uptake</a> among women small business owners was alarmingly slow and sporadic, and even declined during the pandemic. The longer they remain in a cash world, the longer they remain invisible to the financial system.

Investing in the digitization of small businesses, especially those owned by women, will enable them to survive an economic downturn and continue providing jobs, goods, and services to billions of people globally. And connecting more women-led small businesses to digital financial tools can help them build resilience, boost their incomes, and better serve their communities.

Now, after an exciting global project focused on tackling this very challenge, <a href="https://www.accion.org/the-impact-of-digital-transformation-on-underserved-microbusinesses-findings-from-accions-partnership-with-mastercard" target="_blank" rel="noopener noreferrer">we have new evidence</a> that backs this up.

[embed]https://youtu.be/gqofKmcYF8w[/embed]
<h3>Opening doors to the digital economy—and financial health</h3>
For the past four years, Accion and Mastercard have worked with nine financial service providers and 50 fintech startups around the world to help more micro and small businesses go digital. By working with financial companies with deep ties to their communities, we developed digital products and capabilities that meet the needs of underserved entrepreneurs—and help them participate in the digital economy.

Together, we launched innovation hubs, rolled out savings tools and digital loans, reimagined microfinance lending using mobile apps and texting services, and more. To ensure products were used, not merely accessible, we placed clients’ needs at the heart of our work, applied human-centered design, incentivized usage, and focused on improving clients’ financial health.

Small businesses reported a range of benefits as they started using digital products. Perhaps most importantly, digital usage led to improved financial health, including the ability to repay loans on time, cover business expenses, and purchase sufficient inventory to meet demand. Across five countries, nearly 80% of digital product users said they could better manage these financial challenges.

Digital acceptance grew among women, who now account for more than 70% of these product’s active users. Women entrepreneurs reported significant improvements in their financial health, with more than 70% reporting that digital tools contributed to this improvement. Compared to other products, digital wallets were most popular among women small business owners, with more than 80% reporting their quality of life had improved because of the new services it gave them access to.

[caption id="attachment_27775" align="alignright" width="329"]<img class=" wp-image-27775" src="https://content.accion.org/wp-content/uploads/2023/03/Lourdes.jpg" alt="Lourdes, a BancoSol customer, shows the Accion and BancoSol team the applications she uses to design intricate patterns on fabric. " width="329" height="382" /> Lourdes, a BancoSol customer, shows the Accion and BancoSol team the applications she uses to design intricate patterns on fabric.[/caption]

What explains these results? The answer could be quite simple: digital tools save time. More than 75% of our digital wallet users said that saving time was the most important benefit they received from the products. For small business owners who juggle the needs of their customers while managing their households and providing for their families, time is scarce. Any time savings can be reinvested into their business to drive growth. In fact, digital product users reported improved growth activities, including increased sales revenues, hiring more employees, and starting new businesses.

In one example, we worked with BancoSol, Bolivia’s largest microfinance provider serving 1.5 million clients, to develop a gamified savings tool that rewards users for making deposits and maintaining a minimum balance. Regularly using digital products is key to building financial health and literacy, and nearly 90% of small business clients attributed their usage of this product to their ability to resolve financial health challenges.

This innovative product made a difference for BancoSol’s women <a href="https://www.accion.org/gamification-motivates-microentrepreneurs-to-save-in-bolivia">clients</a> like Lourdes, who owns a costume and garment shop in La Paz. She said, “It’s hard to part with your hard-earned money and watch it sit idly in an account collecting dust. I want my money to work hard the way I do.” Now, her savings are working alongside her to build a brighter future.
<h3>Catalyzing investments for a strong, resilient economy</h3>
Looking ahead, we are optimistic about how this work can open pathways to further build the financial health and resilience of women entrepreneurs. We’ve seen that, in addition to supporting established providers, nurturing early-stage fintech companies can radically increase the accessibility and usefulness of financial solutions for underserved small businesses. Fintechs can create game-changing products, embed financial tools in existing platforms to reach millions of people, and find new ways to shift behaviors and build skills among underserved entrepreneurs through innovations like gamification.

We are also eager to catalyze investments that address gender inequalities by developing products with robust business cases and scalability. At the same time, we must ensure that fintechs consider women’s unique needs and digital identities. For example, women’s irregular cell phone top-ups can make them appear like credit risks in the eyes of an algorithm, even though their husbands are often responsible for topping up the phones.

[caption id="attachment_27107" align="aligncenter" width="750"]<img class=" wp-image-27107" src="https://content.accion.org/wp-content/uploads/2022/11/Deasy_Haryuni_Aug2022_Indonesia1-e1667927054385-1024x766.jpg" alt="Desi, laundry business owner, Bina Artha Ventura client" width="750" height="561" /> Desi, a laundry business owner in Indonesia, credits Bina Artha Ventura’s mobile app for helping her stay on top of her bills. “If I want to pay my bills, I can confirm this with the app without needing to go out. I can do this while washing or ironing the clothes. That really helps me,” she said.[/caption]

Our work together reached more than 12.8 million people, with more than 5.6 million micro and small businesses using digital tools on a regular basis. Most encouragingly, 30-day usage rates have increased fourfold over the past year, which shows people are applying these tools to their day-to-day lives.

We encourage other stakeholders to help us build on this progress by leveraging the power of the digital economy to help small businesses build better livelihoods for themselves and their communities. As global challenges continue to spread disruption and uncertainty, collective action offers a means of building a more resilient future for us all, especially women.

With new digital tools, millions of women entrepreneurs are building resilience

alex

<img class="alignright wp-image-12584" src="https://content.accion.org/wp-content/uploads/2018/09/Alex-Rizzi-e1536608803107.png" alt="" width="450" height="563" srcset="https://content.accion.org/wp-content/uploads/2018/09/Alex-Rizzi-e1536608803107.png 678w, https://content.accion.org/wp-content/uploads/2018/09/Alex-Rizzi-e1536608803107-240x300.png 240w" sizes="(max-width: 450px) 100vw, 450px" />Since starting her career in the social impact space, <a href="https://www.centerforfinancialinclusion.org/bio/alexandra-alex-rizzi" target="_blank" rel="noopener">Alex Rizzi</a> has become an <a href="https://www.centerforfinancialinclusion.org/understanding-the-decision-consumer-rights-and-algorithmic-decision-making" target="_blank" rel="noopener">advocate for consumer protection</a> and champion of evidence-based inclusive finance practices. In 2012, she joined the <a href="https://www.centerforfinancialinclusion.org/" target="_blank" rel="noopener">Center for Financial Inclusion</a> (CFI), an independent think tank that uses rigorous research and advocacy to advance inclusive financial systems for low-income people.  
In her current role at CFI, Alex manages the responsible data practices research portfolio, which focuses on opportunities and risks for underserved people using data-driven financial services. Previously, she helped lead CFI’s Smart Campaign, a global initiative that worked to create an environment where financial services are delivered safely and responsibly to low-income clients.  
Digital financial tools have been top-of-mind for Alex and the CFI team as innovations have proliferated in the past decade, especially through the COVID-19 pandemic. “There are so many insights from our work on MSMEs and research into how small businesses digitalized during the pandemic. We identified how women MSME owners face unique challenges and use digital tools differently. In our enthusiasm for digitalization, we need to ensure products are designed with women in mind and don’t create unnecessary or new harms,” says Alex.  
“Digital finance can help women overcome some inequities and systemic factors, like access to healthcare and to financial services, and that’s something our sector has been very excited about. At CFI, we’re also keeping an eye on potential new risks so that digital products don’t exacerbate existing inequalities,” says Alex, reflecting on how gaps in digital literacy, lower access to digital devices, and <a href="https://www.centerforfinancialinclusion.org/the-stories-algorithms-tell-bias-and-financial-inclusion-at-the-data-margins" target="_blank" rel="noopener">potential risk of algorithmic bias</a> can leave women further behind as digitalization accelerates. “As these transformative digital tools become more widely available, we want to keep an eye on making sure they help narrow the gap and not widen it in new ways.”
On ensuring that we understand how low-income customers actually use financial services, Alex says, &#8220;Keep your impact and outcomes as your North Star in any of these exciting new developments. There’s so much learning for all of us to do, and measuring our impact can help us to improve our work.”
To those aiming to work in the social impact space, Alex says, “Our field is at such an exciting inflection point. In my work, there’s this intersection of digital finance, impact, responsible tech, and new regulations coming up the pike for some of these new technologies. Be open to learning and making new connections between what might have seemed like disparate fields in the past.”

The United Nations theme for International Women’s Day this year was <a href="https://www.un.org/en/observances/womens-day" target="_blank" rel="noopener noreferrer">DigitALL: Innovation and technology for gender equality</a>, a celebration of women who are “championing the advancement of transformative technology and digital education.” With innovative digital tools, we can reach more women with the financial services they need to strengthen their livelihoods and build a better future. This year’s day of observance also recognizes the impact of the digital gender gaps and their potential to leave women further behind, both economically and socially.

In our <a href="https://www.accion.org/series/women-of-accion" target="_blank" rel="noopener noreferrer">annual blog series featuring women leaders of Accion and our partners</a>, we’re highlighting inspiring leaders who bring passion and creativity to their vision of building a better world for all people. You can learn about more inspiring women in <a href="https://www.accion.org/women-leaders-innovate-for-a-more-equitable-world-part-one" target="_blank" rel="noopener noreferrer">our first article in this series</a>.

Meet some of the women we’re proud to work with:
<h2>Payal Dalal, Senior Vice President of Social Impact, International Markets at the Mastercard Center for Inclusive Growth</h2>
[caption id="attachment_27952" align="alignright" width="500"]<img class="wp-image-27952" src="https://content.accion.org/wp-content/uploads/2023/03/payal-dalal-mastercard.jpg" alt="Payal Dalal, Mastercard Center for Inclusive Growth" width="500" height="375" /> Payal leads girls in Nigeria in sports and games that help build their confidence and agency.[/caption]

Payal Dalal’s passion for creating economic opportunity in low-income communities developed at an early age. “I am the daughter of immigrants. Every year, my parents would save so we could take a trip abroad as a family, and we traveled to emerging markets such as Kenya, India, Thailand, and Turkey. Through those experiences, I saw girls my age working in homes as cleaners and cooks instead of attending school and learning,” Payal remembers. “It struck me very early on that many, especially adolescent girls, didn’t have the same educational and economic opportunities as I did. It felt unfair, so I set about trying to bridge the divide.” Payal later began a career in international philanthropy and politics and now serves as <a href="https://www.mastercardcenter.org/our-team/payal-dalal" target="_blank" rel="noopener noreferrer">Senior Vice President of Social Impact, International Markets</a> at the Mastercard Center for Inclusive Growth, a longtime Accion partner. In her role, Payal oversees the Center’s philanthropic investments around the globe.

Throughout her career, Payal has witnessed how women have been disproportionately impacted by ongoing economic, public health, and other global challenges. “We have to be cognizant that women are at greater risk of being left further behind due to existing gender norms and institutional inequities in the formal economy. While the increasingly digital economy could provide a ton of opportunities to bridge the gender divide, it also could exacerbate the existing gap between men and women. We need to apply a gender lens to everything from policy, product, and service design, even down to the level of coding that forms the basis of artificial intelligence and automation. Only through honest examination can we uncover how we might be inadvertently institutionalizing gender bias.”

Speaking further on the promise of innovation and digital to drive gender equality, Payal says, “I am especially bullish about the opportunity for women entrepreneurs. Digital technology and innovations will help women entrepreneurs scale their operations and gain better access to financing and capital. My biggest hope is that innovation will create new ways to de-risk women in the eyes of formal financial institutions.” Mastercard Center for Inclusive Growth and Accion launched a first-of-its-kind partnership in 2018, with the aim of <a href="https://www.accion.org/the-impact-of-digital-transformation-on-underserved-microbusinesses-findings-from-accions-partnership-with-mastercard" target="_blank" rel="noopener noreferrer">digitally transforming the lives of 10 million underserved people</a>, including millions of women using digital tools and services to grow their businesses and build better futures for themselves and their families.

For other women looking to make an impact, Payal says, “Don't be afraid to cause trouble. To reach gender equity, we will have to disrupt systems and institutions. This will feel uncomfortable and won’t be welcomed by many. Don't let that deter you. And be sure to find your community of like-minded people, especially women, with whom you can partner and support. Achieving gender equity is a difficult task, and it is easier when you have the right support network. Through partnership and sisterhood, we can achieve scale.”

Women leaders innovate for a more equitable world, part two

Sarah Sassoon

The embedded finance sector is exploding as more and more businesses look to integrate financial services into their core offerings. At a high level, <a href="/embedded-finance-more-than-a-trend" target="_blank" rel="noopener noreferrer">embedded finance solutions</a> help traditionally non-financial technology companies layer financial products and services into their core platforms in a seamless, cost-effective, and user-friendly way. While embedded finance models can take different forms, one group we at Accion Venture Lab are excited about are the “enablers” – the companies that work with (oftentimes non-financial) technology platforms to enable the provision of financial services and products to end customers. Customers using these platforms – mostly individual consumers or small businesses – can then access these financial products where they’re already transacting, which reduces friction costs of seeking those much-needed products (e.g., credit, insurance) elsewhere. 

At Accion Venture Lab, we are particularly excited about the new wave of embedded finance offerings being introduced in historically underbanked markets. We’ve invested in several early-stage companies acting as “enablers,” tapping into spaces like the <a href="/digital-insurance-offers-security-for-underserved-communities-in-africa" target="_blank" rel="noopener noreferrer">African insurance </a>market (via portfolio company, <a href="https://www.lami.world/" target="_blank" rel="noopener noreferrer">Lami</a>) or the <a href="/embedded-finance-enables-luciana-to-expand-her-thriving-restaurant" target="_blank" rel="noopener noreferrer">Brazilian SME financing</a> space (via portfolio company, <a href="https://www.dinie.com/" target="_blank" rel="noopener noreferrer">Dinie</a>). When consumers and small businesses can more easily access financial products and services, they are able to improve their livelihoods and embark on the journey toward sustainable financial health. But for these embedded finance solutions to provide real value to end customers, they have to establish strong partnerships with the platforms that help them access those customers.

For early-stage fintech startups building embedded solutions, it’s common to be opportunistic and accept a platform’s invitation to integrate your financial solution. And for the sake of cash flow and customer acquisition, many startups take the bait.

But as we’ve seen many startups head down this path, we think it’s all the more essential to have a system in place for evaluating and prioritizing your prospective integration partners. At Accion Venture Lab, we work with our embedded finance portfolio companies to help them craft their own “prospective partner scoring system” <a href="/how-to-prioritize-prospective-partners-a-toolkit-for-embedded-fintech-companies" target="_blank" rel="noopener noreferrer">using tools we’ve built internally</a>. We’ve designed this system to help companies think through which eligibility criteria are most important when vetting a partner (and further, the weight or importance that each criterion holds).

Understanding how to prioritize partnership opportunities as they arise can be a strategic advantage and also save you from operational headaches in the future.
<h2>Evaluating startup partnerships: what to keep in mind</h2>
For an embedded finance product, there are some clear advantages to finding the right platform partner. First, access to in-platform data on existing customers can help with more automated and effective credit decision-making. Second, platform partners allow embedded fintech players to meet customers where they already are, reducing per-customer acquisition costs. And third, platforms usually possess tested technologies and messaging that they can use to market products to their customer base seamlessly.

But this isn’t a one-sided relationship – platform partners also benefit from working with embedded finance startups. Throughout our work with our embedded finance companies, we’ve found that the main value proposition for the platform is increased customer engagement and stickiness. The ability to offer financial services to end customers helps the platform remain competitive, increase revenue per user, and meet customer demands for financial services and products. Partnering with an embedded finance startup also means platforms can avoid jumping through regulatory and licensing hoops to become lenders or insurance providers themselves, allowing them to focus instead on optimizing their core product.

As early-stage startups, you need to ensure your platform partners meet specific criteria to achieve mutual benefit. Partners should not only provide a seamless end-customer experience and fair revenue sharing, but they should also align with your company’s values and, ultimately, support your long-term goals.

Here are a few things to think about when evaluating potential partners:
<h3>1. Does your partner’s reputation align with your values?</h3>
It might seem intuitive, but it’s critical to vet a partner’s track record and reputation before getting into the weeds. For many embedded fintechs, the reality is that the platform owns the customer relationship and is the one that will likely be “the face” of your product to end customers. Particularly if you are an early-stage startup working with more notable platform brands, it’s important to understand how both the market and end customers view their relationship with that brand.

Outside of external brand reputation, also gauge what type of a partner they are by seeking references from other companies that have successfully worked with them. These references will give you a better idea of the partner's reliability and how well they collaborate.
<h3>2. Will the partnership enhance the customer experience?</h3>
Embedded finance, at its core, is about forming partnerships that improve the end customer experience. In evaluating a new partner, you’ll first want to be sure that they deeply understand target customer needs and that the addition of your product will help elevate the customer experience in the long term.

You should therefore assess whether they have a proven track record of success in delivering high-quality customer experiences and retaining customers. This assessment could include customer satisfaction ratings, reviews, and awards or recognitions for excellence they have achieved in this area. More technically, it might also involve digging into metrics around customer churn figures (and the reason for that churn), understanding the platform’s ability to ingest and incorporate customer feedback into product design improvements, and considering how the platform differentiates itself from competitors.

You’ll also want to ensure the platform delivers a strong customer experience to you as its partner. This could include vetting the platform’s ability to support the technology infrastructure, data and analytics capabilities, and what their partner support team might look like.
<h3>3. Will the partnership be easy to implement?</h3>
When considering a new partnership, it’s critical to think about the ease of technical implementation. Does your prospective partner already have the necessary technical expertise, staff, and infrastructure to stand up and maintain an integration?  Will the partnership require you to change your technology, processes, or systems significantly? Who is responsible for which parts of the implementation process (you, versus your partner)?

It’s important to answer these questions early in the relationship negotiation stage. You can get creative – in the past, we’ve seen companies tranche implementation payments to align with key milestones or clearly state implementation timeline goals in their partnership agreement. Being candid about these types of barriers upfront is key. Though it can potentially prolong negotiations, it’ll prove beneficial in the long term and hopefully prevent substantial disruptions to both your internal teams and the end customer.
<h3>4. Can you agree on a  clear division of responsibilities and measurements for success?</h3>
While keeping customer experience top of mind, clearly delineate proposed roles and responsibilities between you and your platform partner once the relationship is up and running. For example, you’ll want to cover topics like who will be responsible for developing the product marketing strategy versus who will handle customer incident management and support. You’ll want these roles – from both a personnel and budget perspective – clearly defined from the start to avoid disrupting the customer experience as much as possible.

Finally, both sides should understand how they plan to measure outcomes and what success will look like to them. We recommend having this conversation early in the partnership negotiation stage and setting “check-in” dates at regular intervals to evaluate the Key Performance Indicators (KPIs) you and your partner are keen on measuring. For more information on how to think about KPI-setting (particularly as it pertains to measuring the impact of your partnership on end customers), check out our <a href="https://www.accion.org/operational-metrics-and-reporting-a-guide-to-getting-started">resource on how fintechs can think about setting operational metrics.</a>
<h2>The bottom line</h2>
As platform demand for embedded fintech products continues to rise, it’ll be essential for you, as an early-stage startup, to set criteria by which you can evaluate and prioritize your pipeline of potential partners.

We hope this quick guide will assist you along your journey of finding, evaluating, and building successful partnerships – and creating a lasting impact for end customers. For more insights from Accion Venture Lab, follow us on <a href="https://www.linkedin.com/showcase/accion-venture-lab/" target="_blank" rel="noopener noreferrer">LinkedIn</a> and <a href="https://twitter.com/AccionVLab" target="_blank" rel="noopener noreferrer">Twitter</a>.

Powerful partnerships: A guide for embedded finance startups

Toolkits and Guides

Embedded finance companies often work with platform partners to deliver financial services and products to their end customers. <a href="https://content.accion.org/wp-content/uploads/2023/03/Accion-Venture-Lab-Partner-Prioritization-Scorecard.xlsx">This Excel tool</a> can help you think through how to prioritize prospective partners and measure the strength of the relationship based on a defined set of criteria that are most important to your organization. For more context on the purpose of this tool, head to our written resource, <a href="https://www.accion.org/powerful-partnerships-a-guide-for-embedded-finance-startups">Powerful partnerships: A guide for embedded finance startups</a>.

How to prioritize prospective partners: A toolkit for embedded fintech companies

Fintech for the People: Season 5, Episode 1 featuring Howard Miller, Director, Climate at the Center for Financial Inclusion (CFI)

Podcast

As the world grapples with the devastating impacts of climate change, financial institutions have the power to reduce vulnerability and build resilience by making financial services more accessible to vulnerable populations. In this episode, host <a href="https://www.accion.org/bio/amee-parbhoo" target="_blank" rel="noopener noreferrer">Amee Parbhoo</a> sits down with <a href="https://www.centerforfinancialinclusion.org/bio/howard-miller" target="_blank" rel="noopener noreferrer">Howard Miller</a>, the Director, Climate at the <a href="https://www.centerforfinancialinclusion.org/" target="_blank" rel="noopener noreferrer">Center for Financial Inclusion (CFI)</a>, to discuss how financial inclusion strategies enable people to manage climate-related risks.

CFI, an independent global think tank within <a href="https://www.accion.org/" target="_blank" rel="noopener noreferrer">Accion</a>, recently released <a href="https://www.centerforfinancialinclusion.org/green-inclusive-finance-a-framework-for-understanding-how-financial-services-can-help-low-income-and-vulnerable-people-respond-to-climate-change" target="_blank" rel="noopener noreferrer">The Green Inclusive Finance Report</a>. Howard shares findings from the report and explains how financial services use various impact pathways to help low-income and vulnerable populations with the mitigation, resilience, adaptation, and transition that come with responding to climate change. Howard and Amee also discuss how to incorporate climate risk into financial inclusion strategies, innovations that improve the design of climate-related financial products, and the need for financial institutions to develop new models that consider climate-related risks.

To learn more about Accion Venture Lab, visit our <a href="https://www.accion.org/how-we-work/invest/accion-venture-lab" target="_blank" rel="noopener noreferrer">website</a> and follow us on <a href="https://twitter.com/accionvlab" target="_blank" rel="noopener noreferrer">Twitter</a> and <a href="https://www.linkedin.com/showcase/accion-venture-lab/" target="_blank" rel="noopener noreferrer">LinkedIn</a>.

<a href="https://link.chtbl.com/KeNIKirN" target="_blank" rel="noopener noreferrer">Listen here</a>.

<img class="size-large wp-image-27927 aligncenter" src="https://content.accion.org/wp-content/uploads/2023/03/IMG_6796-1024x576.jpg" alt="quotecard for Miller" width="1024" height="576" />

Mitigating Climate Change Impact with Financial Inclusion

Amit Gupta

Aditya Agarwal

Digital channels can increase and improve customer communication, but they must meet customers where they are on their digital journey

Digital channels can increase and improve customer communication, but they must meet customers where they are

Leelabati is an entrepreneur who lives in a rural part of India, near Bhubaneshwar. She is a group loan customer of the microfinance institution <a href="https://annapurnafinance.in/" target="_blank" rel="noopener noreferrer">Annapurna Finance Pvt. Ltd. (AFPL)</a>, a long-time partner of Accion. Despite having a disability, Leelabati has pursued her aspirations of financial independence by running a tailoring business from her home and working at a rural childcare center in her village. She is very tenacious and has taught herself the use of SMS, IVR, and even digital payments for her business. She finds phone calls and SMS easier to use for communication than apps.

When the COVID-19 pandemic caused her tailoring business to slow down, Leelabati applied for a digital emergency loan from Annapurna through SMS and received it quickly. With the loan, she purchased additional stock to expand her product lines and cater to more households and businesses.

As a result, Leelabati was able to provide her services to more households and businesses in her community, demonstrating her resilience and commitment to her entrepreneurial vision. Leelabati's story serves as a powerful reminder of the vital role that microfinance institutions like Annapurna play in supporting individuals and communities during challenging times.

As Leelabati's business grew, she found herself receiving an increasing number of requests from her various business customers to accept digital payments. This prompted her to explore the world of digital payment platforms, and before long, she found herself seamlessly navigating the intricacies of electronic transactions with ease. Using her smartphone, Leelabati quickly installed a digital payment platform and began accepting payments through the touch of a button. Leelabati has now embraced the power of modern technology, preferring to stay in touch with Annapurna through the convenience of voice calls and SMS.

Rajesh is a proud owner of a grocery shop nestled in the heart of Khurda, near Bhubaneshwar. To ensure his business runs smoothly, Rajesh works tirelessly with the occasional assistance of his wife and trusted employee.

As someone who keeps up with the latest technology, Rajesh is no stranger to relying on digital tools for communication. Armed with his smartphone, he confidently uses WhatsApp and various payment apps to make his business operations a seamless experience for both himself and his loyal customers. Amid the challenges brought on by the COVID-19 pandemic, Rajesh adapted with ease, taking delivery orders through the convenient and efficient medium of WhatsApp. His commitment to providing exceptional service, even in the face of adversity, is a testament to his unwavering dedication to his business and his customers.

During the COVID-19 lockdowns, Annapurna faced the challenge of temporarily shutting down its branches, resulting in a halt to in-person interactions and meetings with customers. This created communication issues between the staff and customers, with information being inconsistent, inaccurate, and often delayed. Recognizing the importance of restoring effective and efficient two-way communication between staff and customers, Annapurna understood that a digital platform capable of engaging with customers in a timely, accurate, and consistent manner was essential. This realization was driven by the need to overcome the communication barriers that were created due to the pandemic and ensure that customers could receive reliable and relevant information without having to visit physical branches.

Annapurna partnered with <a href="https://www.accion.org/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener noreferrer">Accion's Global Advisory Solutions</a> team to develop and deploy a Customer Engagement Platform to engage with customers digitally via a direct channel. To cater to Annapurna's diverse customer base with varying digital proficiency, the team designed multiple direct communication mechanisms using existing channels like WhatsApp, SMS, and IVR.

Annapurna continues to improve and nurture these communication channels to interact directly with customers. Rajesh and Leelabati are two customers who engage actively with Annapurna through the Customer Engagement Platform. Rajesh can conveniently access his loan account details on WhatsApp, while Leelabati received multiple instant digital emergency loans via SMS to resolve short-term credit gaps. They find this approach highly convenient as they receive information directly on their mobile devices, bypassing the need to contact a loan officer for every query.

With Accion's strategic guidance and a program supported by the <a href="https://scbf.ch/" target="_blank" rel="noopener noreferrer">Swiss Capacity Building Facility</a> and launched in July 2022, Annapurna is ramping up the capabilities of its Customer Engagement Platform to enhance its use cases, streamline data flows and reporting, and customize customer messaging. The roadmap also includes the implementation of natural language processing chatbots and the introduction of novel functionalities catering to diverse customer needs. The endgame is to fully integrate the Customer Engagement Platform with Annapurna's extensive customer database to optimize interactions and provide customers with an exceptional experience. By leveraging digital channels, Annapurna can improve customer retention rates while reducing costs associated with customer servicing.

As of December 2022, Annapurna has witnessed an overwhelming response from its microbusiness customers like Rajesh, who have engaged with the organization through WhatsApp to avail of new products, make digital repayments, and receive real-time updates on their account status. Meanwhile, Annapurna's microfinance customers like Leelabati, have received more than 280,000 SMS and over three million interactive voice response messages, providing them with valuable information on a range of topics, from fraud prevention to monthly installment notifications and one-time settlements.

As Annapurna continues to scale up its Customer Engagement Platform, the organization recognizes the importance of creating simple and relevant channels and user journeys to cater to customers with varying levels of digital maturity. This approach has been pivotal in ensuring the success of Annapurna's digital transformation initiatives across the globe, and will continue to be a key focus moving forward.

Learn more about Accion’s <a href="https://www.accion.org/topics/digital-transformation" target="_blank" rel="noopener noreferrer">digital transformation work around the world</a>.

&nbsp;

How digital communication channels deepen customer engagement in India

Season 5 of the Fintech for the People podcast — Climate Fintech: Needs and Opportunities

As climate change-related events increase in frequency, unpredictability, and severity, low-income and vulnerable populations are the most affected. In our fifth season, we’ll explore climate fintech, a new and exciting area of fintech that aims to address climate change.

We will speak to startup founders, investors, and other ecosystem players to understand how we can help individuals and small businesses manage the climate risks they face and work together to build a more sustainable future. Listen in every Thursday as we bring more awareness to the intersection of climate and fintech and its enormous potential to create a more sustainable future.

To learn more about Accion Venture Lab, visit our <a href="https://www.accion.org/how-we-work/invest/accion-venture-lab" target="_blank" rel="noopener noreferrer">website</a> and follow us on <a href="https://twitter.com/accionvlab" target="_blank" rel="noopener noreferrer">Twitter</a> and <a href="https://www.linkedin.com/showcase/accion-venture-lab/" target="_blank" rel="noopener noreferrer">LinkedIn</a>.

<a href="https://link.chtbl.com/47YH3tWS" target="_blank" rel="noopener noreferrer">Listen here</a>.

<img class="wp-image-27915 size-large aligncenter" src="https://content.accion.org/wp-content/uploads/2023/03/s5-speakers-headshots-1024x576.jpg" alt="Fintech for the People podcast S5 " width="1024" height="576" />

Exploring climate fintech: Introducing Season Five of Fintech for the People

Paolo Limcaoco

Embedded finance products can help small retailers like Amelia keep their shelves stocked and their customers happy

Amelia is a 19-year-old with an entrepreneurial spirit. She and her mother run a warung, or a small shop, in Serang City in the province of Banten in Indonesia. Their store is both a retail and wholesale operation, and the bulk of their customers — both resellers and shoppers — are their neighbors. They’re in a tough business. Shops like theirs often rely on cash sales of a large selection of low-margin products. Working capital is tied up in inventory, which must be regularly replenished, leaving the stores lacking liquidity. These conditions can make sustaining a shop difficult, and even harder to grow.

Amelia’s mother opened her store in 2007 and has kept it running ever since. Having grown up alongside the business, Amelia thinks a lot about the store’s long-term prospects. She knows what differentiates her store from others: convenience and selection. Staying stocked with fast-moving consumer goods (FMCGs) like toiletries, food, and medicines is how she stays competitive. But that requires working capital.

“Having more capital allows me to fill up the store so the customers will keep coming,” she says. “They don't want any hassle. If my store has everything that they need, it will make them happy.”

The majority of microbusinesses in Indonesia are owned and managed by women like Amelia and her mother. Around the world, women are less likely than men to be able to access formal financial services, and this exclusion extends to women who start their own businesses. Operating in cash, as Amelia and many others do, makes it difficult to receive loans that help their business grow. While they may have turned to informal lenders in the past, accelerating digitization can make affordable lending available where it wasn’t before.

“I had never tried applying for a loan before, either to banks or other online loans,” Amelia recalls. When she needed working capital to buy more inventory, she sought out a safe source of credit from a credible provider. Her research led her to Fairbanc.

<a href="https://fairbanc.app/" target="_blank" rel="noopener noreferrer">Fairbanc</a> is an embedded tech platform that provides inventory financing in the form of seven-day payment terms for small retail shops like Amelia’s. They offer a buy now, pay later product that is integrated into the inventory ordering apps of large retail partners. This seamless integration vastly expands access to the financing that shops need to grow and build resilience. Their platform removes cash from the equation and allows small retailers to purchase more inventory when experiencing increased demand from their customers.

<img class="aligncenter wp-image-27902 size-full" src="https://content.accion.org/wp-content/uploads/2023/03/amelia-fairbanc-indonesia-store.jpg" alt="Amelia at her shop in Indonesia" width="1500" height="1006" />

“It wasn't difficult to get the credit. I even think that it's easier because the process is uncomplicated. Fairbanc doesn't require collateral, and we pay the amount invoiced without interest charge,” says Amelia.

<a href="https://www.accion.org/an-embedded-finance-platform-helps-mom-and-pop-shops-grow-in-indonesia" target="_blank" rel="noopener noreferrer">Accion Venture Lab invested in Fairbanc</a> because we believe that accelerating digitization responsibly can uplift and empower vulnerable people. Accion is committed to nurturing innovation through fintechs like Fairbanc, helping them to develop new digital products, address clients’ shifting needs, and scale solutions that show potential to improve financial inclusion for women.

In developing their product, Fairbanc made a concerted effort to understand the hurdles Indonesian entrepreneurs like Amelia and her mother face, including the lack of financing options and the challenges of running a retail establishment. They offered a solution that is data-driven, efficient, easy to adopt, and that creates a virtuous cycle. Customers receive credit, grow their business, qualify for further credit, and continue to grow. The owners’ economic circumstances and those of their communities improve substantially.

With access to inventory financing now available, Amelia has even higher aspirations for her shop. “I wish that my store would grow bigger in the future, to be a bigger wholesaler. With today's competition, I hope that my store will remain on top,” she says.

<a href="https://www.accion.org/women-entrepreneurs-turn-to-tech-to-grow-their-businesses" target="_blank" rel="noopener noreferrer">Watch how women entrepreneurs like Amelia</a> have grown their businesses using digital financial tools.

Amelia keeps her family’s business going with embedded fintech

Sebastian Molina Gasman

Thoughtfully designed digital platforms connect women in Brazil to the financial resources needed to start and grow businesses

Luciana’s restaurant in São Paulo, called Barraca da Lu Lu, is inspired by her childhood in a small town in Piauí in northeast Brazil. “Every detail refers to my origins,” she says. “The logo has a cashew, which reminds me a lot of my childhood. I was raised eating a lot of cashews.” Cashew trees surrounded her grandmother’s home in the countryside of Piauí. “I would wake up and see the ground covered in cashews and birds all around,” Luciana recalls.

Before she opened her restaurant, Luciana started by running a stand at a bus stop where she sold egg custard pastries called pastéis, and tapioca crepes that her father taught her how to make growing up. She quickly found success selling her snacks to workers from neighboring businesses and clients at a nearby gym.

“I started in a very small space. I didn't know it was going to get to the size it is today,” she recalls, but time and again, customers showed that they wanted to keep dining at Barraca da Lu Lu. Her secret? “When it comes to the food, we prepare it with love. [Our ingredients] may be the same brand that the neighbor uses. The respect we have for the food differentiates the flavor.” Among her loyal customers, she’s known for her bife a cavalo, a traditional Brazilian dish with steak and eggs, as well as her rice, beans, and vegetable dishes.

When the COVID-19 pandemic reached São Paulo, “Everything closed. Nobody released credit to anyone,” said Luciana. With bills coming due and lockdown measures in place, Luciana began to despair.

After searching online, she was able to find relief through Dinie. <a href="https://www.dinie.com/" target="_blank" rel="noopener noreferrer">Dinie</a> is an embedded lender serving micro, small, and medium-sized enterprises (MSMEs) in Brazil. Suzy Ferreira, Andrea Burattini, and Vinícius Cibim co-founded the company to seamlessly provide digital lending products in the same platforms that entrepreneurs already use to run their businesses. Luciana first started delivering her food through iFood's platform, Dinie's partner that offers food delivery services in Brazil. Through the partnership, MSMEs, such as Barraca da Lu Lu, can access credit offers that fit their financial situation.

For Dinie’s founders, <a href="https://www.accion.org/women-leaders-rebuild-a-more-equitable-world-part-one#suzy" target="_blank" rel="noopener noreferrer">the company’s mission is personal</a>. “When I was very little, I watched my father as a small business entrepreneur really struggle building his business,” recalls Suzy. “These small businesses don't have working capital. They don't have excess liquidity to be able to cover the cash flow needs of the business.”

These platforms have access to data on clients’ cash flows and other payment behavior, which gives Dinie a basis for providing credit. Dinie’s customers can access flexible credit when they need it and receive the loan instantly. Entrepreneurs like Luciana can use the extra <a href="https://www.accion.org/embedded-finance-for-small-businesses-suzy-ferriera-dinie" target="_blank" rel="noopener noreferrer">working capital from Dinie</a> for marketing, payments, inventory, and other expenses that help them better serve their customers. <a href="https://www.accion.org/embedded-finance-meets-small-business-lending-in-latin-america" target="_blank" rel="noopener noreferrer">Accion Venture Lab is proud to have invested in Dinie</a> to expand these financial services to more of Brazil’s underserved MSMEs.

<img class="aligncenter wp-image-27838 size-large" src="https://content.accion.org/wp-content/uploads/2023/03/Luciana_de_Almeida_Silva_Oct2022_Brazil3-1024x683.jpg" alt="Luciana in her restaurant" width="1024" height="683" />

“It was very easy [to get credit from Dinie],” Luciana recalls. “My contact explained everything clearly to me. In two to three days, the loan was approved and [in my account] to do what I needed, which was to pay my bills.”

Dinie co-founders Suzy Ferreira and Andrea Burattini are acutely aware of the ways women are excluded from the financial system. While their target clients are small business owners who don’t have access to credit, women-led startups like theirs receive only a tiny percentage of investments from venture capital firms around the world.

“Being founded by two women, we appreciate a lot, and we want to see the impact of our actions here at Dinie [result] in more female entrepreneurs,” says Andrea. “Historically, women entrepreneurs have had more difficulty accessing credit than men entrepreneurs. And today, our customer base of female entrepreneurs is 45 percent of our customer base.”
<blockquote class="pullquote--right">“I find it very powerful how financial services are interconnected to everything we do. It enables us to fulfill our dreams.</blockquote>
“I find it very powerful how financial services are interconnected to everything we do. It enables us to fulfill our dreams. It enables us to create businesses, create ideas, and basically create wealth through the world,” says Andrea.

An accessible, affordable loan from Dinie helped keep Barraca da Lu Lu afloat through the pandemic. The restaurant remains open, and customers are already asking when Luciana plans to expand again. “This loan has made a huge difference in my life because I was able to continue my dream,” she says. “It means a lot to my family because it’s not just my dream, but also my husband’s and my son’s, too.”

Watch how women entrepreneurs like Luciana have grown their businesses using digital financial tools:

[embed]https://youtu.be/WlqYDuq-Izc[/embed]

Embedded finance enables Luciana to expand her thriving restaurant

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