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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Tannaz  Daruwalla

espanol

<p><em>Cómo el acceso a plataformas de aprendizaje ayuda a microempresarios de México a desarrollar negocios prósperos</em></p>
<p>Angélica María Castro Gómez se ocupa de muchas cosas en el taller de reparación de carros que tiene en Bogotá, Colombia. Además de arreglar los vehículos de sus clientes, supervisa a sus empleados, maneja los pagos, la contabilidad, y promueve su negocio para atraer nuevos clientes. Desde que abrió su taller, se ha esforzado en aprender cómo hacer crecer su negocio y ser más eficiente en todos sus procesos operativos.</p>
<p>Muchos microempresarios como Angélica enfrentan obstáculos por falta de conocimientos o de acceso a herramientas digitales y financieras  fáciles de usar, que puedan ayudarlos a lidiar con sus múltiples responsabilidades, y a manejar con éxito y eficiencia sus negocios. Muchos también siguen excluidos del sistema financiero formal, o dudan en utilizarlo por falta de confianza, por lo que no pueden beneficiarse de los productos y servicios financieros que pueden apoyar el crecimiento de sus negocios. Entre el 40 y el 60 por ciento de las solicitudes de crédito en América Latina son rechazadas por las instituciones financieras, lo que refuerza esta desconfianza. Si bien la migración a herramientas digitales en los últimos años está acercando más micro y pequeñas empresas que nunca a los servicios financieros, emprendimientos como el de Angélica podrían quedarse rezagados si carecen de los conocimientos para administrar sus negocios con éxito, o les falta confianza para usar herramientas digitales, o simplemente no tienen huella digital y, por lo tanto, no tienen acceso a fondos o recursos financieros.</p>
<p>Accion, <a href="https://www.accion.org/accion-expands-digital-platform-to-support-low-income-microentrepreneurs-with-help-from-fedex" target="_blank" rel="noopener">con el apoyo de FedEx</a>, lanzó <a href="https://ovante.org/" target="_blank" rel="noopener">Ovante</a> en 2019 para ayudar a las MIPYME a fortalecer sus capacidades gerenciales, financieras y digitales para que puedan prosperar en un mundo cada vez más digital. Al empoderar a los propietarios de negocios con conocimientos y destrezas a través de una plataforma educativa en línea, Ovante les ayuda a cambiar los comportamientos que les impiden expandir sus negocios y tomar decisiones más informadas, al tiempo que les ayuda a generar mayor confianza en sus habilidades como dueños de negocios y les permite a <a href="https://www.accion.org/margarita-prepares-her-business-for-the-digital-age" target="_blank" rel="noopener">construir un futuro más seguro</a>.</p>
<p>Primero realizamos un piloto de la plataforma de Ovante en Colombia, para luego expandimos a más países en América Latina y, recientemente, <a href="https://www.accion.org/this-user-friendly-app-gives-indian-entrepreneurs-the-skills-to-succeed" target="_blank" rel="noopener">introdujimos</a> la plataforma en la India. Actualmente, estamos aprovechando esta colaboración con FedEx para llevar a Ovante a México y llegar a las MIPYME que continúan excluidas financieramente, y elevar su perfil como clientes potenciales ante los proveedores de servicios financieros. A medida que las MIPYME utilizan la plataforma, podrían aumentar su eficiencia y rentabilidad, ayudándolas a ser más solventes. Para las instituciones financieras, Ovante ofrece nuevas perspectivas sobre sus bases de clientes, lo que les permite conseguir nuevos clientes potenciales y comprender mejor las necesidades y comportamientos de sus clientes actuales.</p>
<h3>Inclusión financiera, un camino hacia el éxito para las micro y pequeñas empresas de México</h3>
<p>La expansión de Ovante en México creará nuevos caminos hacia el éxito para las MIPYME mexicanas, que desempeñan un papel fundamental en la economía del país. Los hallazgos del informe <a href="https://impact.economist.com/projects/digital-brazil-mexico/mexican-smes/" target="_blank" rel="noopener">Economist Impact</a> indican que debido a la cantidad de MIPYME en el país y su distribución geográfica, particularmente en áreas rurales y pequeñas poblaciones, resultan esenciales para el crecimiento económico de México. Los propietarios de micro y pequeñas empresas con capacidades digitales limitadas se beneficiarán de programas dirigidos como Ovante, que es gratuito, pues no solo brindan información y capacitación sobre las herramientas digitales disponibles para ayudarlos a hacer la transición al comercio digital y crecer, sino que también mejoran el acceso de las MIPYME mexicanas a las fuentes de fondos y a otros productos y servicios financieros a través del uso de la plataforma Ovante.</p>
<p>El objetivo de la plataforma es llegar a las MIPYME que son “invisibles” para los proveedores de servicios financieros y ofrecer a las instituciones la oportunidad de conocer mejor a sus propios clientes. Los datos que recoge la plataforma pueden ser aprovechados para identificar a usuarios que podrían beneficiarse de productos y servicios financieros y, potencialmente, para ofrecer crédito a estas MIPYME que de otro modo no hubiesen participado en el sistema financiero formal. Esta información permitirá a los proveedores de servicios financieros, fintechs y otras instituciones introducir productos de crédito en el segmento de las MIPYME, con la confianza de que estos propietarios de negocios han adquirido conocimientos y destrezas para utilizar el crédito de manera responsable en sus empresas.</p>
<h3>Mejores competencias digitales llevan a resultados comerciales positivos</h3>
<p>El éxito de Ovante en los mercados actuales se manifiesta a través de mejoras significativas en las capacidades digitales de los usuarios, así como en la confianza en sus negocios. Una encuesta entre usuarios de la plataforma en Ecuador y Colombia encontró que tan solo con iniciar un módulo en Ovante producía cambios de comportamiento positivos con respecto a sus finanzas personales y comerciales. Los encuestados que completaron los módulos de aprendizaje reportaron mejoras notables en estas áreas en los últimos seis meses. Por ejemplo, más de la mitad de los encuestados dijeron que ahora están usando Internet con más frecuencia en transacciones y operaciones financieras. La mitad de los encuestados que completaron módulos en Ovante también reportaron un aumento en su flujo de caja; más del 60 por ciento mencionó que su satisfacción con su negocio mejoró, y casi el 75 por ciento ha establecido una meta de ahorro mensual. Gracias a la expansión de Ovante a México, más MIPYME obtendrán acceso a servicios financieros formales como el crédito, lo que, junto con herramientas para aumentar su capacidad digital y financiera, puede transformar aún más los negocios de los usuarios.</p>
<p>Gracias a su diseño centrado en el cliente y su enfoque basado en datos, la plataforma Ovante atiende a microempresarios como Angélica, donde están, y les proporciona las herramientas adecuadas para superar las barreras de comportamiento y las brechas de conocimiento que les impiden aumentar sus ingresos, y ayudarles así a impulsar sus negocios. La expansión de Ovante a México entusiasma a Accion pues le permite ayudar a las micro y pequeñas empresas del país a prosperar y continuar impulsando el crecimiento económico.</p>
<p>Para obtener más información sobre Ovante, envíe un correo electrónico a <a href="mailto:tdaruwalla@accion.org">tdaruwalla@accion.org</a></p>


How access to learning platforms helps Mexican microentrepreneurs to build thriving businesses

Article

Angelica Maria Castro Gomez wears many hats at the car repair shop she owns in Bogotá, Colombia. On top of doing car repairs for her customers, she manages her employee, handles payments and bookkeeping, and markets her business to attract new customers. Since she opened her shop, she has struggled to learn how to make her business more efficient and grow.

Many microentrepreneurs like Angelica are hindered by a lack of knowledge of or access to simple, user-friendly digital and financial tools that can help them juggle their many responsibilities and run efficient, successful businesses. Many also remain excluded from or hesitant to participate in the formal financial system due to a lack of trust and cannot benefit from financial products and services that can support their business growth. As much as 40 to 60 percent of credit applications in Latin America are rejected by financial institutions, contributing to this distrust. While the shift to digital over the past several years is connecting more micro and small enterprises to financial services than ever before, those like Angelica can be left further behind if they don’t have the skills to manage their business successfully or the confidence to use digital tools, have no digital footprint, and therefore, no access to capital.

Accion, <a href="https://www.accion.org/accion-expands-digital-platform-to-support-low-income-microentrepreneurs-with-help-from-fedex" target="_blank" rel="noopener noreferrer">with support from FedEx</a>, launched <a href="https://ovante.org/" target="_blank" rel="noopener noreferrer">Ovante</a> in 2019 to help MSMEs strengthen their managerial, financial, and digital capabilities so they can thrive in an increasingly digital world. By empowering business owners with knowledge and skills through an online educational platform, Ovante helps them change the behaviors that are preventing them from expanding their businesses. Ovante users learn to make more informed decisions while building confidence in their skills as business owners to help them to <a href="https://www.accion.org/margarita-prepares-her-business-for-the-digital-age" target="_blank" rel="noopener noreferrer">build a more secure future</a>.

We first piloted the Ovante platform in Colombia, expanded further in Latin America, and recently <a href="https://www.accion.org/this-user-friendly-app-gives-indian-entrepreneurs-the-skills-to-succeed" target="_blank" rel="noopener noreferrer">introduced</a> the platform in India. Now, we’re building on this collaboration with FedEx to bring Ovante to Mexico and reach MSMEs that remain financially excluded, and help raise their profile as potential customers among financial service providers. As MSMEs use the platform, they may boost their efficiency and profitability, helping to make them more creditworthy. For financial institutions, Ovante provides insights into their customer base – allowing them to prospect new customers and better understand their existing customers’ needs and behaviors.
<h3>Financial inclusion, a path to success for Mexico’s micro and small businesses</h3>
Ovante’s expansion into Mexico will create new pathways to success for Mexican MSMEs, which play a critical role in the country’s economy. Report findings from <a href="https://impact.economist.com/projects/digital-brazil-mexico/mexican-smes/" target="_blank" rel="noopener noreferrer">Economist Impact</a> indicate that due to the number of MSMEs in the country and their geographic spread, particularly in rural areas and small towns, these businesses are essential to Mexico’s economic growth. Micro and small business owners with limited digital capabilities will benefit from targeted programs like Ovante — which is free of charge— that not only provide information and training on available digital tools to help them transition to digital commerce and grow, but also improve Mexican MSMEs’ access to capital and other financial products and services by their usage of the Ovante platform.

The platform’s aim is to reach MSMEs that are “invisible” to financial service providers and offer institutions the opportunity to know their customers better. The data that the platform captures can be leveraged to identify users who could benefit from financial products and services and potentially offer access to credit to MSMEs who have otherwise been unable to participate in the formal financial system. This information will allow financial service providers, fintechs, and other institutions to introduce credit products to the MSME segment with the confidence that these business owners have developed the knowledge and skills to use credit responsibly in their businesses.
<h3>Improved digital proficiency leads to positive business outcomes</h3>
<img class="alignright wp-image-28089" src="https://content.accion.org/wp-content/uploads/2023/05/ovante-civico-angelica-colombia-phone-683x1024.jpg" alt="Angelica, car mechanic in Bogota" width="450" height="675" />

Ovante’s success in existing markets has shown significant improvements in users’ digital capabilities as well as confidence in their business. A survey of platform users in Ecuador and Colombia found that just starting a module on Ovante led to positive behavior change with regard to their personal and business finances. Those surveyed who completed learning modules indicated notable improvements in these areas in the last six months. For instance, more than half of respondents said they are now using the internet more frequently for financial transactions and operations. Half of those surveyed who completed modules on Ovante also reported increased cash flow, more than 60 percent said their satisfaction with their business improved, and nearly 75 percent have established a monthly savings goal. With Ovante’s expansion into Mexico, more MSMEs will gain access to formal financial services like credit, which, when paired with tools to increase digital and financial capacity, can transform users’ businesses even further.

With its customer-centric design and data-driven approach, the Ovante platform meets microentrepreneurs like Angelica where they are and provides the right tools to overcome the behavioral barriers and knowledge gaps that prevent them from increasing their revenues and help them boost their businesses. Through Ovante’s expanded footprint into Mexico, Accion is excited to help the country’s micro and small businesses thrive and continue to drive economic growth.

For more information about Ovante, please email <a href="mailto:tdaruwalla@accion.org">tdaruwalla@accion.org</a>

Using edtech to empower Mexico’s small businesses to succeed

Sarah Sassoon

Khazna extends digital financial services to underserved, low-income workers in Egypt so they can manage their money and build financial security

Hany Mahmoud works as a farm manager at Dina Farms, a large farm in the desert area outside Cairo, Egypt. As Egypt’s biggest dairy farm, Dina Farms supplies much of the country with fresh milk and dairy products, as well as fruits and vegetables like potatoes, wheat, oranges, bananas, and olives. The farm provides jobs to hundreds of Egyptians like Hany. “I supervise all station operations, from the milking of cows to feeding the cows to breeding cows. We do many things, and I’m responsible for all of them, with the help of farm engineers, doctors, and supervisors,” says Hany.

Despite steady employment in an essential industry, many workers like Hany still live paycheck-to-paycheck and remain vulnerable to economic instabilities. Millions of Egyptians don’t have access to traditional financial services, like bank accounts and credit products, that provide financial security and help people manage unexpected costs that can be challenging to a tight household budget.

When Hany needed to purchase new tires and spare parts for his car so he could get to work reliably, he didn’t have the cash to pay for them up-front or put down a deposit. An HR manager at Dina Farms recommended a solution from <a href="https://khazna.app/" target="_blank" rel="noopener noreferrer">Khazna</a>.

Khazna is a fintech company in Egypt that provides affordable general purpose credit products through a mobile app and secure ATM card. <a href="https://www.accion.org/a-new-way-to-help-people-living-paycheck-to-paycheck-in-egypt" target="_blank" rel="noopener noreferrer">Accion Venture Lab invests in and supports Khazna</a> to help ensure that more Egyptians gain access to these critical financial tools so they can safely manage their money and build financial security. Khazna partners with businesses like Dina Farms to reach workers across Egypt with essential financial services they otherwise would not be able to use.

[caption id="attachment_28074" align="aligncenter" width="1024"]<img class="wp-image-28074 size-large" src="https://content.accion.org/wp-content/uploads/2023/05/fatma-khazna-founder-egypt-1024x683.png" alt="Fatma El Shenawy, Khazna founder" width="1024" height="683" /> <em>Fatma El Shenawy at Khazna’s office in Cairo.</em>[/caption]

<span style="font-weight: 400;">“Khazna is a financial ‘super app’ that targets mid to low-income labor force across Egypt and is expanding to the greater Middle East,” says Khazna co-founder Fatma El Shenawy. “The core of what we do is credit. It's a multipurpose credit line that the users can use across cash, credit, bill payments, mobile top-ups, and so on. They can buy products in installments through our network of thousands of merchants all around the country. And we've recently launched our prepaid debit card linked to the Khazna app to allow users to have instant access to these services.”</span>

<span style="font-weight: 400;">Egypt is a populous country with a rapidly growing youth population. While citizens are unbanked at high rates, mobile phone penetration is high. This made Egypt a ripe market for a fintech company like Khazna to leverage technology to help Egyptians manage their short and long-term financial needs. </span>

<span style="font-weight: 400;">“There are so many hurdles that prevent middle and low-income people from accessing financial services,” says Omar Salah, another co-founder at Khazna. “We're trying to fill that gap.” After three years in operation, Khazna boasts more than 300,000 active users and 100 partners across Egypt.</span>

[caption id="attachment_28073" align="aligncenter" width="1024"]<img class="wp-image-28073 size-large" src="https://content.accion.org/wp-content/uploads/2023/05/hany-cows-dina-farms-1024x683.png" alt="Khazna customers in Egypt" width="1024" height="683" /> <em>Hany speaks to Mohamed Salama, another Dina Farms engineer.</em>[/caption]

<span style="font-weight: 400;">As a Khazna user, Hany was able to purchase new tires and spare parts for his car at a fair price and seamlessly paid for them in interest-free installments instead. “I didn’t even feel like I paid for the tires in bulk,” he recalls. “It was deducted from my salary without interest.”</span>

<span style="font-weight: 400;">Hear Hany’s story in his own words:</span>

[embed]https://youtu.be/DBg_Bo0DJXE[/embed]

<a href="https://join.accion.org/page/29258/subscribe/1?ea.tracking.id=blog"><span style="font-weight: 400;">Sign up for our emails</span></a><span style="font-weight: 400;"> to learn more about how financial tools make a difference in the lives of workers around the world.</span>

This app brings financial support to underbanked Egyptian workers

Amee Parbhoo

Climate change is unquestionably the challenge of our times. And as climate-related events increase in frequency, unpredictability, and severity, low-income communities across emerging markets are the most vulnerable. According to the World Bank, if left unchecked, <a href="https://blogs.worldbank.org/climatechange/when-poverty-meets-climate-change-critical-challenge-demands-cross-cutting-solutions" target="_blank" rel="noopener noreferrer">climate change will push up to 130 million people into poverty</a> over the next ten years and could force over 200 million people to migrate away from disaster-prone geographies by 2050.

Addressing the impact of climate change on low-income populations will require a multi-faceted approach. At Accion Venture Lab, we are excited to support fintech innovations that build resilience and help susceptible communities better adapt to the climate shocks they are facing.
<h2>The rise – and limitations – of climate fintech solutions</h2>
Climate fintech is still an emerging sector, but one that is gaining steam fast. Investments in climate fintech <a href="https://fintech.global/2023/02/24/climate-fintechs-raise-record-funding-levels-in-2022/#:~:text=In%202022%2C%20climate%20FinTech%20investments,research%20were%20founded%20post%202010." target="_blank" rel="noopener noreferrer">reached $2.9B in 2022</a>, more than twice what was raised the year before. This growth is encouraging, and we’re excited to see the range and depth of new innovations emerging in this space.

However, while the scope of climate fintech is vast, the majority of funding is going to solutions around climate mitigation, which aim to reduce or avoid further emissions of greenhouse gases. Fintech solutions like carbon accounting and carbon offsetting are important tools for corporations and individuals alike to better monitor and manage their carbon emissions. Yet for the world’s most vulnerable, mitigation is not enough.

The poorest 50 percent of the world’s population contributes <a href="https://www.oxfam.org/en/press-releases/carbon-emissions-richest-1-percent-more-double-emissions-poorest-half-humanity">half</a><a href="https://www.oxfam.org/en/press-releases/carbon-emissions-richest-1-percent-more-double-emissions-poorest-half-humanity" target="_blank" rel="noopener noreferrer"> the emissions</a> of the richest one percent. Despite this, they will pay the highest price for climate change if action is not taken immediately. To address the challenges they face, we require different paths.
<h2>Emerging opportunities in climate fintech</h2>
Our colleagues at <a href="https://www.centerforfinancialinclusion.org/" target="_blank" rel="noopener noreferrer">the Center for Financial Inclusion</a> recently released the <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">Green Inclusive Finance</a> framework, which describes four impact pathways for how inclusive finance can be used by low-income households facing climate shocks: mitigation, resilience, adaptation, and transition.

We believe this is a valuable framework for evaluating how and where inclusive finance can play a role in responding to climate change. Beyond mitigation, we need solutions that help people absorb climate-related shocks (“resilience” models) as well as enable communities to prepare their families and livelihoods for actual or expected climate changes (“adaptation” models) or, in more extreme cases, seek out new livelihoods entirely (“transition” models).

[caption id="attachment_28036" align="aligncenter" width="1024"]<img class="wp-image-28036 size-large" src="https://content.accion.org/wp-content/uploads/2023/04/cfi-green-inclusive-finance-framework-1024x535.png" alt="CFI's Green Inclusive Finance framework" width="1024" height="535" /> <em><a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/01/Green-Inclusive-Finance.pdf" target="_blank" rel="noopener noreferrer">The Center for Financial Inclusion’s green inclusive finance framework</a> outlines the ways financial products and services can support low-income populations in managing and responding to climate-related challenges.</em>[/caption]

We hope to see more solutions – and more investments made – in fintech companies tied to climate adaptation and transition for low-income and vulnerable populations. The work comes from not only building these solutions but innovating in how they can scale. Core to this will be how we build incentives for low-income communities to adopt new practices and the financial services that enable them. We’ve seen models fail because they expect vulnerable populations to willingly change their behaviors in the face of actual or expected climate changes. However, the incentive to change needs to be crystal clear. For example, how does introducing a new way of farming or weatherproofing one’s roof result in higher, more stable incomes or lower costs? We’re excited about companies that are thinking about not just new use of technology but ways to design, communicate, and deliver these incentives.
<h2>Startups bringing innovation to those affected by climate change</h2>
We have already invested in a number of climate fintech startups working around the world, particularly in startups building technology for climate-resilient agriculture. Agriculture will continue to feel outsized impacts from climate change, and financial services can play a critical role in helping smallholder farmers and the entire agricultural value chain adapt their practices.

The impact of our current portfolio companies includes:
<ul>
 	<li><strong>Driving resilience for smallholder farmers:</strong> <a href="https://www.pula-advisors.com/" target="_blank" rel="noopener noreferrer"><strong>Pula</strong></a> provides farmers across Africa access to cutting-edge insurance and helps protect farmers against the risk of financial losses due to climate-related events. These events – unpredictable rains, droughts, and pests – impact farmer yields and result in reduced production and incomes. Pula’s insurance is a valuable solution to ensure these farmers are resilient to the changing conditions around them.</li>
 	<li><strong>Improving financial access for aquaculture farmers:</strong> <a href="https://www.accion.org/farm-automation-tech-opens-financial-access-for-aquaculture-farmers-in-india" target="_blank" rel="noopener noreferrer"><strong>AquaExchange</strong></a> supports aquaculture farmers in India who often lack the technical knowledge and financing to sell their harvests. Through its platform, AquaExchange helps farmers monitor their farms in real-time using a unique wireless sensor, buy resources, sell crops, and find appropriate routes to credit. Not only does the company enable aquaculture farmers to build more resilient farms, but they can also earn more income while supporting the global food supply and generating a positive environmental impact.</li>
 	<li><strong>Helping farmers maximize their profits and be more climate resilient: </strong><a href="https://www.apolloagriculture.com/" target="_blank" rel="noopener noreferrer"><strong>Apollo Agriculture</strong></a> helps farmers in Kenya and Zambia access high-quality farm inputs, financing, and markets by using satellite imagery and AI. Apollo provides farmers with timely information on weather patterns and soil conditions so they can adjust their farming practices and minimize their exposure to climate-related risks. This bundling of optimized advice, insurance, inputs, and financing enables farmers to establish more sustainable practices and increase their incomes and adapt to changing climate conditions.</li>
 	<li><strong>Digitizing the agriculture industry:</strong> <a href="https://www.semaai.com/" target="_blank" rel="noopener noreferrer"><strong>Semaai</strong></a>'s digitization efforts support Indonesia's agriculture industry in becoming more sustainable and climate resilient. By enabling local sellers of agricultural products to access and track inventory digitally, Semaai helps to reduce waste and optimize resource use in the agricultural supply chain. The company also provides a transaction history for shop owners, which they can then use to purchase inventory on credit – increasing incomes and alleviating cash flow issues and the barrier of limited financing opportunities in the country.</li>
</ul>
<h2>Moving climate fintech forward</h2>
The road ahead for climate fintech is promising, and we are excited to see more innovation in the coming months and years ahead. Like any emerging field, there are challenges to navigate along the way. We’re aware of how climate fintech solutions can fall prey to greenwashing. Greenwashing can be intentional or unintentional, as many companies are still learning how to measure their impact accurately, and how to honestly communicate and meet their sustainability goals. It’s therefore important that climate fintech startups embrace frameworks and guidance on calculating their impact and realistically scaling it over time.

There is also work to do in consumer protection and data privacy in climate fintech (as there is in inclusive fintech more broadly). Organizations collaborating with vulnerable communities must handle personal and sensitive information with extra care. Climate fintechs may also need to educate users about online safety and digital data management.

At Accion Venture Lab, we look forward to addressing these challenges together with the climate fintech companies in our current and future portfolio. We are ready to learn how to empower vulnerable communities and support solutions that help people manage climate risks and participate in a more sustainable, equitable future.

If you’d like to learn more, check out the latest season of our <a href="https://link.chtbl.com/CetnI2TC">Fintech for the People podcast</a> and hear from some of the trailblazing founders and investors in this space.

Climate fintech: Building solutions that support the most vulnerable

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 <em>warung</em>, 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

Podcast

After seeing the need for climate solutions in Africa, Lyndsay Holley Handler decided to commit to building a company that would deliver clean, affordable energy and financial services to hard-to-reach communities. Amee Parbhoo speaks with Lyndsay, Co-founder and Managing Partner of Delta40 Studio, an early-stage investor and venture builder in energy, agriculture, and mobility sectors that are increasing incomes and tackling climate change in Africa.

Lyndsay shares how Factor[e] and Delta40 Studio are investing in climate solutions that immediately impact income and resilience in Africa, can mitigate climate change, and are delivered with scalable business models. Amee and Lyndsay also discuss the power of partnerships with corporate partners and how getting to the root of problems unlocks economic development, carbon mitigation, and climate resilience.

To learn more about Accion Venture Lab, <a href="https://www.accion.org/how-we-work/invest/accion-venture-lab" target="_blank" rel="noopener noreferrer">visit our 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/rnNuV75U" target="_blank" rel="noopener noreferrer">Listen here</a>.

<img class="aligncenter wp-image-28021 size-large" src="https://content.accion.org/wp-content/uploads/2023/04/Accion-Lyndsay-Quotecard-1024x576.png" alt="Lyndsay Holley Handler quote" width="1024" height="576" />

Building and Investing in Scalable Climate Fintech Solutions in Africa

The agriculture sector may be a big contributor to greenhouse gas emissions, but it’s also the most affected by climate change. Climate change and a lack of access to technological innovations harm rural agricultural communities. To find out how to address this, host Amee Parbhoo talks with Abhishek Gupta, co-founder of <a href="https://www.semaai.com/">Semaai</a>, to learn how Semaai is building agritech solutions in Indonesia to help farmers and rural shops maximize their earning potential and reduce their emissions footprint.

Semaai is a farmer-first company building full-stack agritech solutions that provide innovative financial services to farmers and rural MSMEs. Amee and Abhishek discuss the challenges rural communities and small farmers face in Indonesia, how agritech addresses issues like the overuse of chemicals when crop yields fall, and how the Semaai platform empowers farmers and small mom-and-pop shops to grow their businesses.

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/CetnI2TC" target="_blank" rel="noopener noreferrer">Listen here</a>.

<img class="aligncenter size-full wp-image-27997" src="https://content.accion.org/wp-content/uploads/2023/04/Accion-Abhishek-Quotecard.png" alt="Abhishek Gupta on Fintech for the People" width="1600" height="900" />

Building Climate Resilience into Agricultural Value Chains

Fintech for the People: Season 5, Episode 3 featuring Pavan Kosaraju, CEO and co-founder of AquaExchange

Overfishing poses a big threat to the health of oceans, marine life, and communities everywhere. But the aquaculture industry presents more responsible opportunities to harvest more eco-friendly proteins. Now, through innovative digital and financial solutions, smallholder aquaculture farmers in India can dramatically improve their yields while protecting our oceans and marine life. Host <a href="https://www.accion.org/bio/amee-parbhoo" target="_blank" rel="noopener noreferrer">Amee Parbhoo</a>, Managing Partner of Accion Venture Lab, talks with Pavan Kosaraju, CEO and co-founder of <a href="https://aquaexchange.com/" target="_blank" rel="noopener noreferrer">AquaExchange</a>, about how AquaExchange's solutions empower farmers to reduce production costs and sustainably farm seafood.

AquaExchange is revolutionizing the aquaculture industry in India by providing full-stack digital and proprietary farm management solutions and financial services to aquaculture farmers in India. Pavan and Amee discuss how tech-based solutions can decrease the environmental impact of aquaculture farms, the challenges faced by small-scale shrimp and fish farmers, the effects of overfishing on farming communities, and the shift towards inland aquaculture.

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/-iziAnPQ">Listen here</a>.

<img class="aligncenter size-full wp-image-27979" src="https://content.accion.org/wp-content/uploads/2023/04/Accion-Pavan-Quotecard.png" alt="Fintech for the People" width="1600" height="900" />

Paving the Way for Sustainable Seafood Farming in India

María Belén Garrett

<p><em>Empoderar a jóvenes empresarias con las habilidades y la confianza para prosperar</em></p>
<p>Es un hecho comprobado que las mujeres enfrentan más barreras que los hombres en el acceso y uso de los servicios financieros formales. Después de llevarse la peor parte en la crisis de COVID-19, las mujeres siguen enfrentando incertidumbre y nuevos desafíos, ya que las repercusiones socioeconómicas continúan teniendo efectos duraderos. Si bien el origen de estos problemas suele ser sistemático, tenemos la oportunidad de empoderar a las mujeres con conocimientos, habilidades y herramientas que las ayuden a prosperar.</p>
<p>La innovación digital está abriendo oportunidades económicas para las mujeres de todo el mundo al permitirles desarrollar negocios, aumentar sus ingresos, obtener mayor independencia y mejorar la calidad de vida para sí mismas, sus familias y comunidades. En eso consiste nuestro trabajo en Accion: nos asociamos con proveedores de servicios financieros inclusivos de todo el mundo para ofrecer a más mujeres con las herramientas digitales y financieras que necesitan para tener éxito en la economía moderna. Pero las empresarias necesitan algo más que herramientas para prosperar: también deben desarrollar auto confianza y habilidades para iniciar y manejar negocios que les generen ingresos. Es por ello que el equipo <a href="https://www.accion.org/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener">Global Advisory Solutions</a> de Accion, con el apoyo de la Fundación S&amp;P Foundation, ha lanzado el programa <a href="https://ovante.org/es/lola-digital/" target="_blank" rel="noopener">LolaDigital</a> para ayudar a las mujeres jóvenes a desarrollar habilidades empresariales y generar confianza para emprender negocios exitosos. LolaDigital está diseñado con un enfoque centrado en las mujeres para que las empresarias dispongan de habilidades para la toma de decisiones y reciban apoyo mientras expanden sus negocios en línea.</p>
<p>Para el desarrollo de LolaDigital utilizamos los hallazgos de nuestras investigaciones sobre los comportamientos y necesidades de las propietarias de pequeñas empresas, nuestra experiencia en la creación de programas exitosos como Ovante, <a href="https://www.worldsummitawards.org/2019/12/10/meet-the-40-winners-of-2019/" target="_blank" rel="noopener">nuestra premiada plataforma educativa</a>, y nuestro enfoque de cambio de comportamientos. A través de nuestros diversos programas, hemos ayudado hasta ahora a más de 1,3 millones de emprendedores en todo el mundo a conocer más en materia financiera y digital a través de módulos de aprendizaje con herramientas y técnicas interactivas basadas en juegos. Esto incluye a la <a href="https://www.accion.org/margarita-prepares-her-business-for-the-digital-age" target="_blank" rel="noopener">florista Margarita</a> y a la <a href="https://www.accion.org/how-the-pandemic-is-spurring-microentrepreneurs-to-go-digital" target="_blank" rel="noopener">pastelera Karen</a>, en Colombia, y a varios miles que han utilizado nuestro <a href="https://www.accion.org/a-guide-to-pandemic-recovery-for-microentrepreneurs" target="_blank" rel="noopener">kit de herramientas de recuperación de COVID-19</a> para reconstruir su resiliencia frente a esta crisis y otros retos futuros, así como los programas de educación financiera en India, entre otros. Gracias a mediciones y encuestas de participación de usuarios, podemos mejorar progresivamente nuestra comprensión de las necesidades de educación gerencial, financiera, comercial y digital de las MiPyME, y determinar cómo reforzar estas capacidades de manera más efectiva.</p>
<p>Estos aprendizajes en base a una investigación con usuarios junto con <a href="https://www.accion.org/5-ways-to-help-women-entrepreneurs-adapt-during-covid-19" target="_blank" rel="noopener">investigaciones previas sobre los desafíos que enfrentaron las empresas propiedad de mujeres durante la pandemia</a>, nos ayudaron a identificar la importancia de interactuar con mujeres, donde se encuentran, de reconocer sus responsabilidades y factores de estrés cotidianos, y de tomar en cuenta el papel de las habilidades digitales en el desarrollo de la resiliencia. Algunas de las mujeres con las que hablamos antes de crear LolaDigital nos contaron cómo tienden a confiar en el apoyo de otras mujeres, cómo a veces dudan de sí mismas al tomar sus propias decisiones comerciales, lo difícil que es disponer del tiempo necesario para aprender cómo expandir sus negocios en línea y llegar a nuevos clientes, y cómo sienten una necesidad apremiante de apoyo humano. A través de estas entrevistas con mujeres, de conversaciones con proveedores de servicios financieros en cuatro países y de una revisión de la documentación relevante, identificamos las siguientes limitaciones en el desarrollo de destrezas:</p>
<ul>
<li>Para muchas mujeres jóvenes en los mercados emergentes, el continuar los estudios después de la secundaria, o incluso de la primaria, resulta imposible por diferentes razones. El espíritu empresarial puede abrirles nuevos caminos para generar sus propios ingresos y lograr independencia financiera. Sin embargo, la falta de habilidades para manejar negocios en el mundo digital puede frenarlas y profundizar la brecha económica para ellas.</li>
<li>Las emprendedoras necesitan apoyo adicional al iniciar un negocio o hacer la transición a un nuevo modelo de negocio. Sin ese apoyo adicional, este segmento se siente aislado y sin seguridad sobre su futuro y el de sus empresas.</li>
<li>El hacer malabarismos con las responsabilidades familiares limita el tiempo que las empresarias pueden dedicar a sus negocios, particularmente la posibilidad de salir de casa para comercializar y vender sus productos a clientes potenciales.</li>
</ul>
<p>Gracias a estos conocimientos y utilizando sesiones de ideación con socios seleccionados, diseñamos el programa LolaDigital. Los talleres en línea y los módulos digitales de aprendizaje desarrollarán las habilidades técnicas y blandas de las mujeres, incluyendo el marketing digital, las ventas en línea, la autoconfianza, la toma de decisiones y la resolución de problemas. LolaDigital también ofrecerá un componente de mentoría que reúne a pequeños grupos con voluntarios, creando así espacios para que las empresarias practiquen sus habilidades blandas mientras trabajan en actividades relacionadas con los negocios. El programa tiene una duración de cinco meses, lo que proporciona a las participantes suficiente tiempo para practicar y aprender de la aplicación de estas destrezas a sus propias empresas; por ejemplo, creando planes de marketing digital o identificando proveedores de pagos en línea.</p>
<p>Nos entusiasma desarrollar las capacidades de miles de jóvenes empresarias en todo el mundo, e igualmente explorar servicios sostenibles y modelos operativos que podrían llegar a muchas más de ellas. ¿Le interesa ayudarnos a lograr este objetivo? Los invitamos a unirse a este iniciativa y nos ayudan a implementar este programa y a conectarnos con jóvenes empresarias de todo el mundo que podrían beneficiarse de un programa en línea gratuito y de alta calidad. Los cursos están disponibles en <a href="http://www.loladigital.org" target="_blank" rel="noopener">www.loladigital.org</a> en español, inglés y hindi. Si desea hablar sobre cómo nos pueden ayudar a distribuir el contenido, se puede poner en contacto con <a href="mailto:mgarrett@accion.org">María Belén Garrett</a>.</p>


Accion introduces LolaDigital, a skills-building program for young women entrepreneurs in Mexico, Ecuador, Colombia, India, Nigeria, and around the world 

It is a well-established fact that women face more barriers than men in accessing and using formal financial services. After bearing the brunt of the COVID-19 crisis, women continue to face uncertainty and constantly evolving challenges, as the socio-economic repercussions continue to have a lasting effect. While the roots of these issues are often systemic, we have an opportunity to empower women with skills, knowledge, and tools that will help them thrive.

Digital innovation is unlocking economic opportunity for women across the globe by enabling them to build businesses, increase their incomes, gain more independence, and improve the quality of life for themselves, their families, and their communities. That’s what we’re working to do at Accion: partnering with inclusive financial service providers around the world to equip more women with the digital and financial tools they need to succeed in the modern economy. Women entrepreneurs need more than just tools to succeed – they must also build the confidence and the skills to start and run businesses that secure their incomes. That’s why <a href="https://www.accion.org/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener noreferrer">Accion Global Advisory Solutions</a>, with support from <a href="https://www.spglobal.com/en/foundation" target="_blank" rel="noopener noreferrer">S&amp;P Global Foundation</a>, is piloting a program called LolaDigital to help young women develop entrepreneurial skills and build confidence to grow a successful business. <a href="https://ovante.org/lola-digital/" target="_blank" rel="noopener noreferrer">LolaDigital</a> is designed with a women-centered approach to equip women entrepreneurs with decision-making skills and support them as they expand their businesses online.

We’re using insights from our research into the behaviors and needs of small business owners, our experience developing successful programs like our <a href="https://www.worldsummitawards.org/2019/12/10/meet-the-40-winners-of-2019/" target="_blank" rel="noopener noreferrer">award-winning</a> edtech platform <a href="https://ovante.org/" target="_blank" rel="noopener noreferrer">Ovante</a>, and our behavior change approach to build LolaDigital. Through all our edtech programs, we have helped over 1.3 million entrepreneurs globally to date become more financially and digitally savvy through learning modules with interactive tools and techniques like gamification. This includes <a href="https://www.accion.org/margarita-prepares-her-business-for-the-digital-age" target="_blank" rel="noopener noreferrer">florist Margarita</a>, <a href="https://www.accion.org/how-the-pandemic-is-spurring-microentrepreneurs-to-go-digital" target="_blank" rel="noopener noreferrer">confectioner Karen</a> in Colombia, and the many thousands who have used our <a href="https://www.accion.org/a-guide-to-pandemic-recovery-for-microentrepreneurs" target="_blank" rel="noopener noreferrer">COVID-19 recovery toolkit</a> to rebuild their resilience in the face of this crisis and future challenges and financial literacy programs in India, among others. Through user engagement metrics and surveys, we continuously refine our understanding of MSMEs’ managerial, financial, business, and digital education needs and determine how these capabilities are most effectively strengthened.

These user engagement learnings, along with prior <a href="https://www.accion.org/5-ways-to-help-women-entrepreneurs-adapt-during-covid-19" target="_blank" rel="noopener noreferrer">research on the challenges faced by women-owned businesses during the pandemic</a>, helped us identify the importance of meeting women where they are by recognizing their day-to-day responsibilities and stressors and considering the role of digital skills in building resilience. Some of the women we talked to before creating LolaDigital told us how they tend to rely on the support of other women, doubt themselves when making their own business decisions, struggle to find the time needed to learn how to expand their businesses online and reach new customers, and feel a pressing need for human support. Through these interviews with women, conversations with financial service providers in four countries, and a literature scan, we identified the following constraints on skills-building:
<ul>
 	<li>For many young women in emerging markets, continuing studies after high school or even primary school is impossible for different reasons. Entrepreneurship can open a new pathway to earning their own income and achieving financial independence. However, a lack of skills to run a business in the digital world can hold them back and deepen the economic gap for women.</li>
 	<li>Women entrepreneurs require extra support when starting a business or transitioning to a new business model. Without that extra support, this segment may feel isolated and uncertain about their future and that of their business.</li>
 	<li>Juggling family responsibilities limits the time young women entrepreneurs can devote to their business, particularly their ability to get out of the house to market and sell their products to prospective customers.</li>
</ul>
With these insights and through ideation sessions with selected partners, we designed the program LolaDigital. Online webinars and e-learning modules will develop young women´s technical and soft skills, including digital marketing, online sales, communication, decision-making, and problem-solving. LolaDigital will also offer a mentorship component that brings together small groups with volunteers, creating space for entrepreneurs to practice their soft skills while working on a business-related activity. The program runs for five months, providing participants with plenty of time to practice and learn as they apply these skills to their own businesses – for example, creating a digital marketing plan or identifying an online payments provider.

We are excited to build the capabilities of thousands of young women entrepreneurs globally while also exploring sustainable service and operating models that could reach many more young women. Interested in helping us meet this goal? Join us. We welcome partners to help us implement this program and connect with young female entrepreneurs around the world who could benefit from a high-quality, free program. The online courses are available at <a href="http://www.loladigital.org/" target="_blank" rel="noopener noreferrer">www.loladigital.org</a> in Spanish, English, and Hindi. Please contact <a href="mailto:mgarrett@accion.org">María Belén Garrett</a> to discuss how we can work together.

Empowering young women entrepreneurs with skills and confidence to thrive

Fintech for the People: Season 5, Episode 2 featuring Maelis Carraro, Managing Partner at Catalyst Fund

For the venture space to build climate resilience among vulnerable populations, we need to mobilize more capital, talent, and innovative technology to support locally led solutions that address climate change in regions most affected. To explore this, host <a href="https://www.accion.org/bio/amee-parbhoo" target="_blank" rel="noopener noreferrer">Amee Parbhoo</a> talks with Maelis Carraro, Managing Partner at Catalyst Fund, about how we can build climate resilience, prepare for future risks, and build long-term opportunities in a new climate environment.

Catalyst Fund is a pre-seed fund and accelerator focused on inclusive tech solutions in emerging markets. Maelis shares how Catalyst Fund's new Climate Resilience Fund invests in companies that offer climate-smart financial services, climate-resilient agriculture innovations, and sustainable mobility solutions. Amee and Maelis also discuss how startups can address their customers' climate vulnerabilities, strategically map opportunities in the value chain, and explore the carbon finance world.

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/RHlbrqUT" target="_blank" rel="noopener noreferrer">Listen here</a>.

<img class="aligncenter wp-image-27968 size-large" src="https://content.accion.org/wp-content/uploads/2023/03/Accion-Maelis-Quotecard-1024x576.png" alt="Maelis Carraro, Catalyst Fund" width="1024" height="576" />

Revolutionizing Climate Resilience Through Impact Investing

Elizabeth Winters

alex

<p><span data-contrast="auto">Since starting her career in the social impact space, </span><a href="https://www.centerforfinancialinclusion.org/bio/alexandra-alex-rizzi" target="_blank" rel="noopener"><span data-contrast="none">Alex Rizzi</span></a><span data-contrast="auto"> has become an </span><a href="https://www.centerforfinancialinclusion.org/understanding-the-decision-consumer-rights-and-algorithmic-decision-making" target="_blank" rel="noopener"><span data-contrast="none">advocate for consumer protection</span></a><span data-contrast="auto"> and champion of evidence-based inclusive finance practices. In 2012, she joined the </span><a href="https://www.centerforfinancialinclusion.org/" target="_blank" rel="noopener"><span data-contrast="none">Center for Financial Inclusion</span></a><span data-contrast="auto"> (CFI), an independent think tank that uses rigorous research and advocacy to advance inclusive financial systems for low-income people. </span><span data-ccp-props="{}"> </span></p>
<p><span data-contrast="auto">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. </span><span data-ccp-props="{}"> </span></p>
<p><span data-contrast="auto">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. </span><span data-ccp-props="{}"> </span></p>
<div id="attachment_27961" style="width: 1034px" class="wp-caption aligncenter"><img aria-describedby="caption-attachment-27961" class="wp-image-27961 size-large" src="https://content.accion.org/wp-content/uploads/2023/03/cfi-team-h.m.-queen-maxima-1024x780.png" alt="CFI team meets with H.M. Queen Máxima" width="1024" height="780" srcset="https://content.accion.org/wp-content/uploads/2023/03/cfi-team-h.m.-queen-maxima-1024x780.png 1024w, https://content.accion.org/wp-content/uploads/2023/03/cfi-team-h.m.-queen-maxima-300x228.png 300w, https://content.accion.org/wp-content/uploads/2023/03/cfi-team-h.m.-queen-maxima-768x585.png 768w, https://content.accion.org/wp-content/uploads/2023/03/cfi-team-h.m.-queen-maxima.png 1400w" sizes="(max-width: 1024px) 100vw, 1024px" /><p id="caption-attachment-27961" class="wp-caption-text"><em>Alex Rizzi (second from right) and CFI colleagues meet with H.M. Queen Máxima of the Netherlands, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA).</em></p></div>
<p><span data-contrast="auto">“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 </span><a href="https://www.centerforfinancialinclusion.org/the-stories-algorithms-tell-bias-and-financial-inclusion-at-the-data-margins" target="_blank" rel="noopener"><span data-contrast="none">potential risk of algorithmic bias</span></a><span data-contrast="auto"> can </span>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.”</p>
<p>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.”</p>
<p>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.”</p>


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

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" /> <em>Payal leads girls in Nigeria in sports and games that help build their confidence and agency.</em>[/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

<span style="font-weight: 400;">The embedded finance sector is exploding as more and more businesses look to integrate financial services into their core offerings. At a high level, </span><a href="/embedded-finance-more-than-a-trend" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">embedded finance solutions</span></a><span style="font-weight: 400;"> 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. </span>

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. <strong>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.</strong>

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 <strong>have a system in place for evaluating and prioritizing your prospective integration partners</strong>. 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 <strong>increased customer engagement and stickiness</strong>. 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>
<span style="font-weight: 400;">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 </span><i><span style="font-weight: 400;">and</span></i><span style="font-weight: 400;"> end customers view their relationship with that brand.</span>

<span style="font-weight: 400;">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.</span>
<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.

<span style="font-weight: 400;">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 </span>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

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