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

Climate change affects the poorest households most.

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Michael Schlein

Joe Blatchford's pioneering work built the foundation for Accion.

Article

I write to share the sad news that Accion has lost a very dear member of our family. Accion’s founder, Joseph H. Blatchford, passed away yesterday at the age of 86. Joe was a courageous and charismatic leader who overcame cultural and economic differences to help disadvantaged people around the world. His pioneering work built the foundation for Accion, and my colleagues and I continue to find inspiration in his legacy.

Over the last decade, I had the chance to share several meals with Joe and his wife, Winnie, who was also among the founding generation of Accionistas. We often talked about how Accion has changed over the years, but, perhaps more importantly, we spoke about how Accion remained the same. Joe spoke with passion about his vision to give those less fortunate the tools they need to help themselves. Those tools keep changing, but that mission remains the core of our work. I remember asking him how he recruited that first generation. He said he looked for “people with the audacity to think they can make a difference.” I smiled and said, “I like to think we’re still attracting people with that very same audacity.”

Joe founded Accion in 1961 as a recent graduate of Berkeley Law School. He was fresh off a goodwill tennis and jazz tour of 30 Latin American cities, during which he saw firsthand political turmoil and enormous poverty. He was deeply moved. He wondered how young Americans might help in a meaningful and enduring way. At the same time, they would gain a deeper understanding of the challenges around the world.

With the help of fellow Berkeley Law students Jerry Brady and Gary Glenn, Joe recruited Accion’s first class of thirty American volunteers who would work on projects in Venezuela. Accion didn’t try to impose answers; they listened carefully and heard what the community felt it needed. In the early days, for example, they helped build schools and drainage channels. Accion’s volunteers provided technical support and assistance to enable local residents to launch their own projects. They believed that lasting change was built on giving the communities the tools they needed to help themselves.

Joe wrote, “We believe that the collective initiative of hundreds of such communities can bring progress without bloodshed, and champion the most revolutionary idea of all—the dignity of the individual human being.”

Joe expanded Accion in the late 1960s with chapters in Brazil, Peru, and New York. Joe speculated that President Kennedy may have drawn inspiration from Accion when he founded the Peace Corps in 1961. In fact, Joe was appointed Director of the Peace Corps in 1969 by President Nixon. Under Joe’s leadership, the Peace Corps expanded its applicant pool by boosting recruitment efforts in minority communities and allowing couples with children to apply. In 1971, Joe became the first director of the ACTION agency, which centralized all domestic and international volunteer agencies, and which later became the Corporation for National and Community Service. His commitment to service was lifelong.

Joe’s vision for Accion and the foundation he built positioned Accion to become a global leader in expanding financial inclusion to benefit underserved populations around the world.

After Accion issued its first loans to small, informal enterprises in Brazil in 1973, Accion’s clients soon shattered the myth that the poor were bad credit risks. Given access to affordable capital, they could and would improve their lives. From that point on, Accion expanded a network of microfinance programs and partners across Latin America and into the United States, sub-Saharan Africa, India, and beyond. We’ve found, funded, and grown fintech companies leveraging new technologies to reach the underserved. And we’ve converted our decades of expertise into influence, challenging the industry to serve and protect low-income clients everywhere.

None of this would have been possible without Joe. Please join me in sending our deepest thanks and condolences to Winnie and the entire Blatchford family.

Remembering Accion’s founder Joe Blatchford, 1934-2020

The selected fintechs provide innovative solutions – such as working capital for micro-merchants and personal accident insurance for domestic workers – to populations particularly hard-hit by the pandemic.

Press Release

<em>WASHINGTON, October 20, 2020</em> - Inclusive Fintech 50 announced the <a href="http://www.inclusivefintech50.com/2020-cohort" target="_blank" rel="noopener noreferrer">2020 cohort of startups</a> driving inclusion and resilience for the 3 billion financially underserved people globally. An <a href="https://www.inclusivefintech50.com/2020-judging-panel" target="_blank" rel="noopener noreferrer">independent panel of 35 experts</a> from venture capital, technology, and financial services firms identified the most promising startups providing credit, insurance, savings, and other critical products to low-income households and businesses that are particularly vulnerable to financial shocks like the COVID-19 economic crisis.

The 50 fintechs were selected from a pool of 403 eligible applicants operating in 111 countries based on four criteria: inclusiveness, innovation, scale potential, and traction. The cohort will benefit from connections to leading investors including the <a href="https://www.inclusivefintech50.com/if50-investors-circle" target="_blank" rel="noopener noreferrer">IF50 Investors Circle</a>, as well as their peers from the <a href="https://www.inclusivefintech50.com/winners" target="_blank" rel="noopener noreferrer">2019 cohort</a>. Inclusive Fintech 50 was founded by MetLife Foundation and Visa, with support from Accion and IFC, and additional funding from BlackRock and Jersey Overseas Aid &amp; Comic Relief.

Together, these high-potential startups demonstrate the power of financial technology to improve the accessibility, affordability, and convenience of financial services in advanced and emerging markets.

“Innovation in financial services can provide much needed stability to vulnerable populations by leveraging technology to fill gaps and meet their unique needs,” said Mark Pickens, Senior Director, Social Impact at Visa, Inc. “Visa is proud to support fintech innovators helping low-income communities weather the current storm and, importantly, build resilience for the future.”

Brad Jones, CEO of Wave Money and one of the expert judges said, “The final 50 were selected based on strong product-market fit, the experience of their leadership teams, and their potential to scale and reach underserved populations.” The judges also selected two fintechs to receive “Financial Resiliency” prizes of USD 25,000 based on their contribution to strengthening the ability of low-income households and businesses to withstand and recover from the pandemic. Those two companies are:
<ul>
 	<li><strong>reach52</strong>, which provides micro-insurance to families in Southeast Asia who live more than an hour away from healthcare facilities and have limited incomes.</li>
 	<li><strong>PesaKit</strong>, which helps mobile money agents in Kenya and Tanzania manage shifts in liquidity so they can better serve their customers who have limited access to basic financial services.</li>
</ul>
“The health and economic challenges created by COVID-19 placed households and businesses on shaky financial footing — especially those who were economically vulnerable before the pandemic,” said Evelyn Stark, who leads Financial Health at MetLife Foundation. “Amid the uncertainty, these fintechs demonstrate how new models can improve financial resilience.”

Launched in 2019, Inclusive Fintech 50 identifies and elevates high-potential, early-stage, and innovative fintech startups driving financial inclusion and resilience. The initiative is implemented by MIX, the global data resource for investors focused on inclusive finance.

The winners are listed below by main operating region. Full profiles can be viewed at <a href="http://www.inclusivefintech50.com/2020-cohort" target="_blank" rel="noopener noreferrer">www.inclusivefintech50.com/2020-cohort</a>.
<h3><strong>East Asia &amp; the Pacific</strong></h3>
<ul>
 	<li><strong>Fairbanc </strong>(Credit)</li>
 	<li><strong>First Circle</strong> (Credit)</li>
 	<li><strong>Helicap</strong> (Credit)</li>
 	<li><strong>Kiu Global Ltd</strong> (Infrastructure)</li>
 	<li><strong>Modal Rakyat</strong> (Credit)</li>
 	<li><strong>Neat Commerce</strong> (Payments &amp; Remittances)</li>
 	<li><strong>Oriente</strong> (Credit)</li>
 	<li><strong>reach52</strong> (Insurance)</li>
 	<li><strong>UangMe</strong> (Credit)</li>
 	<li><strong>ZigWay</strong> (Infrastructure)</li>
</ul>
<h3><strong>Europe &amp; Central Asia</strong></h3>
<ul>
 	<li><strong>EthicHub</strong> (Credit)</li>
 	<li><strong>Eversend</strong> (Payments &amp; Remittances)</li>
 	<li><strong>Papara</strong> (Payments &amp; Remittances)</li>
 	<li><strong>SteadyPay</strong> (Credit)</li>
 	<li><strong>TagPay</strong> (Payments &amp; Remittances)</li>
</ul>
<h3><strong>Latin America &amp; the Caribbean</strong></h3>
<ul>
 	<li><strong>Aflore SAS</strong> (Credit)</li>
 	<li><strong>Akiba</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>Alfi</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>Bamba</strong> (Insurance)</li>
 	<li><strong>Coink</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>Grupo R5</strong> (Insurance)</li>
 	<li><strong>Siembro</strong> (Credit)</li>
 	<li><strong>TiendaPago</strong> (Credit)</li>
</ul>
<h3><strong>North America</strong></h3>
<ul>
 	<li><strong>Climb Credit</strong> (Payments &amp; Remittances)</li>
 	<li><strong>Esusu</strong> (Credit)</li>
 	<li><strong>Fonbnk</strong> (Payments &amp; Remittances)</li>
 	<li><strong>Propel</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>SoLo Funds</strong> (Credit)</li>
 	<li><strong>Trust Stamp</strong> (Infrastructure)</li>
</ul>
<h3><strong>South Asia</strong></h3>
<ul>
 	<li><strong>Davinta</strong> <strong>Financial Services</strong> (Credit)</li>
 	<li><strong>Dvara SmartGold</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>ftcash</strong> (Credit)</li>
 	<li><strong>Fundfina</strong> (Credit)</li>
 	<li><strong>Kaleidofin</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>Naya Jeevan</strong> (Insurance)</li>
 	<li><strong>Nagad</strong> (Payments &amp; Remittances)</li>
 	<li><strong>SureClaim</strong> (Insurance)</li>
 	<li><strong>Verismart</strong> (Infrastructure)</li>
</ul>
<h3><strong>Sub-Saharan Africa</strong></h3>
<ul>
 	<li><strong>Asaak</strong> (Credit)</li>
 	<li><strong>Bankly</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>DreamStart Labs</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>Extrafin Advisory Technologies</strong> (Savings &amp; Personal Financial Management)</li>
 	<li><strong>Hydrologistics Africa Ltd</strong> (Payments &amp; Remittances)</li>
 	<li><strong>Lulalend</strong> (Credit)</li>
 	<li><strong>Moon</strong> (Infrastructure)</li>
 	<li><strong>OKO Finance Ltd</strong> (Insurance)</li>
 	<li><strong>Paycode</strong> (Payments &amp; Remittances)</li>
 	<li><strong>PayGo Energy</strong> (Infrastructure)</li>
 	<li><strong>PesaKit</strong> (Infrastructure)</li>
 	<li><strong>Turaco</strong> (Insurance)</li>
</ul>
<p style="text-align: center"><strong>###</strong></p>
&nbsp;

Please direct media inquiries to:
<strong>Nikhil Gehani, MIX</strong>
<a href="mailto:ngehani@themix.org">ngehani@themix.org</a>
+1 248 388 1630
<h3><strong>About Inclusive Fintech 50</strong></h3>
Inclusive Fintech 50 elevates promising early-stage fintechs driving financial inclusion and resilience around the globe through a competitive process led by an independent panel of judges from venture capital, technology, and financial services. Applicants are assessed on the degree to which their target market includes underserved people or businesses, and whether their innovation offers a new value proposition, shows early-stage traction, and can have a noticeable impact on the more than 3 billion financially undeserved people globally. Inclusive Fintech 50 was founded by MetLife Foundation and Visa, with support from Accion and IFC, and additional funding from BlackRock and Jersey Overseas Aid &amp; Comic Relief. The initiative is implemented by MIX, the global data resource for investors focused on inclusive finance. Learn more at <a href="http://www.inclusivefintech50.com/">www.inclusivefintech50.com</a>.
<h3><strong>About MetLife Foundation </strong></h3>
At MetLife Foundation, we are committed to expanding opportunities for low- and moderate-income people around the world. We partner with nonprofit organizations and social enterprises to create financial health solutions and build stronger communities, while engaging MetLife employee volunteers to help drive impact. MetLife Foundation was established in 1976 to continue MetLife’s long tradition of corporate contributions and community involvement. From its founding through the end of 2019, MetLife Foundation provided more than $860 million in grants and $85 million in program-related investments to make a positive impact in the communities where MetLife operates. Our financial health work has reached more than 13.4 million low- and moderate-income individuals in 42 countries. To learn more about MetLife Foundation, visit metlife.org.
<h3><strong>About Visa Inc. </strong></h3>
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information visit <a href="http://usa.visa.com/visa-everywhere/blog.html">About Visa</a> and <a href="https://twitter.com/visanews">@VisaNews</a>.
<h3><strong>About BlackRock </strong></h3>
BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, our clients turn to us for the solutions they need when planning for their most important goals. As of September 30, 2020, the firm managed approximately $7.81 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, please visit <a href="http://www.blackrock.com/corporate">www.blackrock.com/corporate</a>
<h3><strong>About Jersey Overseas Aid &amp; Comic Relief’s <em>Branching Out: Financial Inclusion at the Margins</em> program</strong></h3>
In 2018, Comic Relief and Jersey Overseas Aid announced a four-year £8 million partnership called ‘Branching Out: Financial Inclusion at the Margins’ to improve access to affordable financial services for those at the margins of society in in Sierra Leone, Rwanda and Zambia. Comic Relief and Jersey Overseas Aid  believe that  one of the best ways to do this is by transferring knowledge to build responsible and inclusive financial systems, incubating FinTech, and focusing on service delivery to increase bottom-of-the-pyramid access to financial services including  bank  accounts,  savings,  insurance  and  credit, providing low-income households with the means to plan for the future as well as unexpected events. The partnership grants support a diverse set of organisations, made up of international and local NGOs, with each grantee delivering programmes designed to meet different community and national needs in addressing financial inclusion.
<h3><strong>About Accion </strong></h3>
Accion’s seed-stage investment initiative Accion Venture Lab provides capital and extensive support to innovative fintech startups that improve the reach, quality, and affordability of financial services for the underserved and have the potential to scale. Backed by commercial and impact investors since the launch of its third-party fund in 2019, Venture Lab has invested in more than 40 early-stage startups that operate in 30 countries worldwide. Venture Lab is a part of Accion, a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. Accion catalyzes financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of – or poorly served by – the financial sector. For nearly 60 years, Accion has helped tens of millions of people through our work with more than 160 partners in 55 countries. For further information, visit https://www.accion.org/venturelab.
<h3><strong>About IFC </strong></h3>
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit <a href="http://www.ifc.org/">www.ifc.org </a>
<h3><strong>About MIX </strong></h3>
MIX is the leading global data resource for socially responsible investors and businesses focused on inclusive finance. As a unit within the Center for Financial Inclusion, MIX’s data initiatives encourage the growth of inclusive markets and support informed thinking on the future of financial services. MIX convenes stakeholders to build common data standards that create transparency and develops strategic insight from complex data to help sectors flourish. Founded in 2002, MIX has served as a trusted data partner for socially responsible investors who move USD 10 billion annually. Learn more at <a href="http://www.themix.org/">www.themix.org</a>.

Inclusive Fintech 50 announces 2020 cohort of fintech startups driving financial inclusion and resilience

Ashley Lewis

Field Intelligence’s data-driven software is helping pharmacies in Nigeria and Kenya provide medicine and essential health care to their communities

As hospitals reduce routine appointments and patients avoid visiting clinics, more and more people are relying on their neighborhood pharmacy for essential medications and basic health services during the COVID-19 pandemic. “[Pharmacies] are the front line of the health system in their communities,” says Michael Moreland, co-founder and CEO of <a href="https://field.inc/" target="_blank" rel="noopener noreferrer">Field Intelligence</a>, <a href="/community-pharmacies-use-new-tech-platform-to-keep-shelves-stocked" target="_blank" rel="noopener noreferrer">a tech-focused pharmaceutical supply chain company operating in Nigeria and Kenya</a>. “In these markets where there is such a tremendous shortage of doctors and formal health care services, these local community pharmacies provide an enormous amount of basic primary and essential care to their communities.”
<h2>Relieving a pain point for pharmacies at a critical time</h2>
[caption id="attachment_22503" align="alignright" width="448"]<img class="wp-image-22503 " src="https://content.accion.org/wp-content/uploads/2020/10/Glosevic-Pharmacy-Abuja.png" alt="Olusegun Osofundiya of Glosevic Pharmacy in Abuja" width="448" height="240" /> <em>“It can actually help you stabilize a business and it expand it like it’s done for me.” — Olusegun Osofundiya, Glosevic Pharmacy in Abuja</em>[/caption]

On top of the challenges of running a small business, pharmacies are struggling with the complexity of managing a pharmaceutical supply chain that has been upended during the pandemic. Field Intelligence, an Accion Venture Lab portfolio company, helps pharmacies to manage their inventory using their Shelf Life subscription service. Pharmacists order the medicine and products they need through the platform, and Shelf Life delivers it directly to them. “They save us costs — big ones — because we don’t have to go and pay transport fees to come procure the goods. They bring them right here to the shop,” says Udodirim Agwu, pharmacist and owner of Euness Pharmacy in Abuja.

For Olusegun Osofundiya, pharmacist and owner of Glosevic Pharmacy in Abuja, Shelf Life’s pay-as-you-sell model has relieved many pressures on his business. “Stocking a pharmacy is very expensive really — when you talk about investment opportunity of shelves and everything and when you talk about the drugs themselves. Someone gives you lines of credit, it gives you more options to do other things and relax,” he says.
<h2>Using data to increase efficiency and keep prices low</h2>
Field Intelligence collects data on the pricing and availability of essential drugs across Africa to secure lower prices for their customers. After data showed that malaria drug prices increase during a particular quarter each year, they were able to anticipate and hedge that price spike for their customers. When the COVID-19 pandemic unfolded, supply chains were quickly turned upside down, and prices for routine medicines — especially vitamin C and acetaminophen — went through the roof. Using their data capabilities, Field Intelligence has been able to stabilize prices for their pharmacy customers and continue supplying them with the medicine and products that they wouldn’t be able to procure on their own during this period of unprecedented demand.

Since the pandemic began, Michael notes that pharmaceutical prices in East and West Africa have “increase[d] at a rate that is really unprecedented since we’ve been measuring for the last three or four years. Some of the most essential products that we sell have jumped some four standard deviations in the last quarter, the average increase between 5 and 11 percent — and for drugs that patients with chronic conditions count on. That kind of volatility — that kind of sudden shock — is never a good thing. But it’s come at a time when household income has collapsed.” When possible, Field Intelligence recommends more affordable and widely available product substitutions so that their clients can stock alternative medications for their patients.

Many small, privately-owned pharmacies already struggled to stock their shelves properly, and the pandemic has added significant challenges. Shelf Life relieves the burden of managing the complicated pharmaceutical supply chain so they can focus on providing health services in their communities. Hear more about how Field Intelligence’s response to the pandemic on <a href="/the-pandemic-provides-lots-of-new-problems-for-entrepreneurs-to-solve-fields-michael-moreland">Michael Moreland’s episode of VentureKast: Rebuild</a>.

How tech is helping to meet health care needs during the pandemic

Emma Morse

Vishal  Ajmera

Key insights from MSMEs about the gender gap in digital access, the role of misinformation, and more

Small businesses are the backbone of India’s growing economy. There are 50 to 60 million micro, small, and medium enterprises (MSMEs) operating in the country, employing 110 million individuals and contributing nearly a third of the GDP. Despite a diverse lending landscape, access to formal credit remains a challenge for most; prior to COVID-19, it is estimated that 60 to 70 percent of all MSMEs’ credit requirements were unmet, a figure that is likely to increase given the current operational challenges institutions face. In addition, <a href="https://omidyar.com/wp-content/uploads/2020/09/18-11-29_Report_Credit_Disrupted_Digital_FINAL.pdf" target="_blank" rel="noopener noreferrer">up to 40 percent of lending is informal</a>, often with prohibitive interest rates.

In July, <a href="/msme-digital-maturity-assessment" target="_blank" rel="noopener noreferrer">Accion conducted our Digital Maturity Assessment</a> with Annapurna Finance Ltd., a non-bank financial institution based in the Odisha province of India. Through <a href="/mastercard-and-accions-partnership-to-unlock-millions-of-underserved-microbusinesses" target="_blank" rel="noopener noreferrer">Mastercard and Accion’s partnership</a>, Accion is working with Annapurna Finance to develop two new digital products: a low-ticket emergency loan (“just in time finance”) for group lending customers and an end-to-end digital loan for formalized MSMEs. Given the ongoing challenge and restrictions of physical loan disbursements and in-person collections due to COVID-19, these products will bring convenience and safety to both customers and staff.

Before we started this work, Annapurna Finance segmented their 14,000 MSME customers by the financial products they use. In addition to providing a more customer-centric segmentation, our research uncovered key insights, which we’ve outlined below.
<h3>There’s a gender gap in digital access and usage</h3>
Our survey results demonstrated that women haven’t been able to embrace digital tools as much Annapurna’s male customers. We saw the largest differences when evaluating:
<ul>
 	<li><strong>Trust in digital tools:</strong> Women made up over half of the “nascent” segment, a segment with low comfort and trust in digital tools, but only 4 percent of the “enabled” segment: the group that is digitally savvy and willing to try more advanced digital tools.</li>
 	<li><strong>Device ownership:</strong> Looking at device ownership, we found notable differences in gender: only 28 percent of women surveyed owned a smartphone for their own personal use compared to 55 percent of men in the sample.</li>
 	<li><strong>Digital transactions:</strong> In terms of comfort in completing transactions digitally, 78 percent of women stated that interacting with a person is important to them when completing transactions compared to 49 percent of men across all maturity levels.</li>
 	<li><strong>Household dynamics:</strong> Anecdotally, female customers were also more likely to hand the phone to another member of the household — usually a husband or a male family member — when contacted by the enumerator for this study.</li>
</ul>
To bridge the gender gap and promote greater digital usage among women, trainings and confidence-building activities can build the financial capability of female clients, as well as their trust in the products themselves.

<img class="wp-image-22586 alignnone" src="https://content.accion.org/wp-content/uploads/2020/10/digital-maturity-assessment-gender.png" alt="Segment breakdown by gender" width="551" height="663" />
<h3>Habits lead to confidence and self-efficacy</h3>
Our findings showed a notable difference in digital confidence levels in respondents who often use digital technology versus those who use it less frequently. Of the respondents who stated that they use digital technology more than once a day, 94 percent said that they agree with the statement, “I am confident in using digital technology to do the things I need to do online.” For respondents that use digital technology only once a week, only 29 percent felt confident. Given this finding, we determined that products that are intentional about increasing digital engagement, with features like nudges or gamification, would likely have a positive impact on users’ digital confidence. With more digital confidence, clients are better suited to transition to new products and channels, giving FSPs an opportunity to introduce them to additional products.

<img class="alignnone wp-image-22588 " src="https://content.accion.org/wp-content/uploads/2020/10/digital-maturity-assessment-confidence-1.png" alt="confidence in digital tools" width="689" height="359" />
<h3>Widespread misinformation online creates adoption challenges</h3>
Even among digitally mature customers, distrust in information found online is nearly universal. Among respondents that use digital tools several times a day, 80 percent disagreed with the statement, “I feel confident that the information I find online is correct.” FSPs should consider ways to build trust in digital channels through secure messaging and authentication procedures and provide resources to help customers discern which information is truthful.

<img class="alignnone wp-image-22587 " src="https://content.accion.org/wp-content/uploads/2020/10/digital-maturity-assessment-confidence-2.png" alt="confidence in digital tools" width="693" height="332" />
<h3>Digital marketing and business management is uncommon</h3>
We learned that only 3 percent of respondents on average, and only and 6 percent of digitally mature customers, use digital technology for business management purposes. The use of digital tools like WhatsApp and Facebook Marketplace for marketing and promotion was slightly more common, but we still found only a small proportion — 6 percent overall and 11 percent among digitally mature customers — were using digital tools for this purpose. Based on this finding, initiatives that digitize processes that customers are already familiar with, like loan repayment, may lead to greater short-term adoption compared to business management tools.

<img class="alignnone wp-image-22589 " src="https://content.accion.org/wp-content/uploads/2020/10/digital-maturity-assessment.png" alt="Use of digital technology" width="598" height="549" />
<h2>How can providers help MSMES progress in their digital journey?</h2>
<img class="alignnone wp-image-22585" src="https://content.accion.org/wp-content/uploads/2020/10/digital-design-principles.png" alt="Digital Design Principles" width="889" height="503" />

Small merchants like Annapurna’s customers in India continue to face enomous challenges during the pandemic. Having access to digital tools that suit their needs can help. As trusted partners, FSPs can play a significant role in helping MSME customers progress in their digital maturity journey. However, without a clear understanding of where their customers fall on the spectrum, providers risk developing products that don’t resonate with their end users’ specific needs. Given the complexity and time commitment of gathering customer insights, especially at a time when face-to-face conversations aren’t feasible, we designed the <a href="/msme-digital-maturity-assessment" target="_blank" rel="noopener noreferrer">MSME Digital Maturity Assessment</a> to be a simple tool that leverages existing institutional resources to gather insights on customers’ attitudes, beliefs, and practices regarding digital financial services, which would be challenging to glean from transactional data alone.

<a href="/the-first-step-to-help-small-businesses-go-digital-during-covid-19" target="_blank" rel="noopener noreferrer">Learn more about our framework for assessing the digital maturity</a> of MSMEs and <a href="mailto:GLASSupport@accion.org">reach out to our team</a> if you’re interested in conducting an assessment of your own customers.

Critical lessons from a survey of small businesses in India

Introducing a framework for assessing the digital maturity of MSMEs

From buying and selling online to managing bank accounts to communicating digitally, access to digital tools has never been as essential for economic resilience as it is right now. <a href="https://cdn.ymaws.com/ande.site-ym.com/resource/resmgr/publications/covid_and_sgbs_issues_brief-.pdf" target="_blank" rel="noopener noreferrer">An estimated 42 percent</a> of the world’s micro, small, and medium enterprises (MSMEs) are at risk of failure in the next six months due to the global pandemic. However, businesses that have transitioned their sales, delivery, and operations online are less likely to experience economic hardships and are better able to weather the economic and financial strains of the crisis. Despite potential gains, many businesses are not digitizing.

Support from trusted financial providers can help these vulnerable businesses seize digital opportunities so they can stay operational through the pandemic. As financial service providers (FSPs) consider adding new digital offerings for their clients, they must consider <a href="https://www.smartcampaign.org/storage/documents/Digital_Credit_Standards_June_2019.pdf" target="_blank" rel="noopener noreferrer">how to ensure that clients will use them effectively</a>. Leveraging Accion’s global experience and understanding of what influences small business owners to adopt digital products, we developed the <a href="/msme-digital-maturity-assessment" target="_blank" rel="noopener noreferrer">Micro, Small, and Medium Enterprise (MSME) Digital Maturity Assessment</a>.

Institutions can use this diagnostic tool to survey their customers about their ownership of digital tools and comfort using them for their businesses and use that data to segment their customers. Customer-centric segmentation has several benefits beyond ensuring that products meet a customer’s needs:
<ul>
 	<li><strong>Building a business case:</strong> There is a clear advantage to segmentation, as gaining a deeper understanding of customers’ digital maturity can help institutions better estimate the market for a new digital product or service. Once launched, segmentation data can guide direct marketing and sales resources towards the right customers for a product or service.</li>
 	<li><strong>Product innovation and optimization:</strong> With a deeper understanding of customer segmentation, FSPs can better support their customers’ journeys towards new channels like mobile and internet banking. By understanding the differences between their customer segments, institutions can also identify key design principles that will work best for customers based on their digital maturity.</li>
 	<li><strong>Customer experience and impact measurement:</strong> Understanding digital maturity can lead FSPs to improve the overall customer experience by identifying friction points in the customer journey. Institutions and funders can measure improvements in customers’ digital maturity over time to determine the impact of their efforts. A customer-centric approach to segmentation — based on capabilities, beliefs, and behaviors — helps institutions stay focused on their customers instead of products.</li>
</ul>
We hope institutions will consider <a href="/msme-digital-maturity-assessment" target="_blank" rel="noopener noreferrer">embedding this assessment</a> within their own product development process to ensure that resources invested in new products are focused on what is most appropriate for customers so we can support more struggling MSMEs during a difficult time.

If you’re interested in understanding your customers’ digital maturity, <a href="mailto:GLASSupport@accion.org">contact us to learn more</a>.

<em><a href="/critical-lessons-from-a-survey-of-small-businesses-in-india">See how we used the assessment to gain valuable insights for customer segmentation in India</a>.</em>

The first step to help small businesses go digital during COVID-19

Toolkits and Guides

The Micro, Small, and Medium Enterprise (MSME) Digital Maturity Assessment is a segmentation tool for financial service providers to guide digital product design based on the needs and digital experience of their MSME customers. It leverages Accion’s global experience and understanding of what influences small business owners to adopt digital products, breaking digital maturity down into key behavioral drivers and enablers. In addition to informing product design and go-to-market strategies, this assessment can show how products can build the digital maturity of customers over time.

<a href="https://content.accion.org/wp-content/uploads/2020/10/MSME-Digital-Maturity-Assessment.pdf">Download our Digital Maturity Assessment here</a>.

The Micro, Small, and Medium Enterprise (MSME) Digital Maturity Assessment

How investors and startup founders can conduct a successful due diligence process remotely

When the COVID-19 pandemic struck, founders and investors alike wondered what effects it would have on the startup market. How would companies adapt? What effects would the crisis have on operations? And would investors continue to evaluate potential opportunities? We've been working to find answers to these questions —and many more — over the past few months.

Now that some time has passed, we're seeing that the startup ecosystem has adapted in stride — and as an encouraging sign, investors are still investing. Just as we found in our own experience and in conversations with other investors, the approach to the due diligence process has changed – and some of these changes may transcend the current pandemic. We've constructed this guide to help fintech startups, venture capital firms, and other investors understand it better.

In our Remote Due Diligence Mini-Guide, we'll share:
<ul>
 	<li>Which steps in the due diligence process have changed, and how;</li>
 	<li>How investors are using technology, in-market relationships, and other tools to approach due diligence in a remote fashion;</li>
 	<li>And, some words of advice from our own investment team at Accion Venture Lab for our fellow investors, as well as startups seeking funding.</li>
</ul>

Guide to remote due diligence

Tannaz  Daruwalla

With a foundation of new skills from edtech training, a family-owned Colombian confectionery goes digital to stay open during the pandemic

Karen Yesenia Torres Villamizar grew up surrounded by sweets. For her entire life, her mother, Ofelmina, has made specialty wafers and sweets in their family-owned confectionery business in Piedecuesta, Bucaramanga, in Colombia. Ofelmina taught her daughters how to make her special recipes, and now 21-year-old Karen runs the business' storefront, called La Torre Dulceria. Karen and her sister have taken on a leading role in the business, but their mother is still their guide. “My mother is the engine, she takes care of everything,” says Karen.

Karen decided to open La Torre Dulceria’s retail store to expand her family’s wholesale business and sell directly to local customers. But the COVID-19 pandemic threatened to shut down their business permanently as customers could no longer visit her store and providers were hard to reach. Karen found a way to keep her business open for delivery by promoting and selling their sweets online — with help from Accion’s interactive edtech platform, <a href="https://www.ovante.org/" target="_blank" rel="noopener noreferrer">Ovante</a>.
<h2>Selling traditional wafers in a modern way</h2>
<img class="alignright wp-image-22465 " src="https://content.accion.org/wp-content/uploads/2020/09/obleas-strawberry-FB-e1601396879412-300x207.jpg" alt="" width="319" height="220" />Karen’s confectionary business makes obleas, a popular Colombian dessert made of wafers with a sweet filling. She and her family make their handmade, preservative-free obleas with both traditional and unconventional sweet fillings like strawberries, passion fruit, chocolate, caramel, and M&amp;M's. Like countless small businesses around the world, La Torre Dulceria took a big hit in March when the COVID-19 spread to Colombia and customers couldn't visit the store. “At first it was hard,” said Karen. “Sales were obviously lower because of chaos and fear. We even thought about closing for good, but after a week or so we realized that everything could be adapted and everything could be delivered, and — you know — it is all about adapting.”

[caption id="attachment_22466" align="alignleft" width="252"]<img class=" wp-image-22466" src="https://content.accion.org/wp-content/uploads/2020/09/delivery-box-FB-240x300.jpg" alt="La Torre Dulceria delivers their products during the pandemic" width="252" height="315" /> <em>La Torre Dulceria now offers treats like cajita de brevas con arequipe, or figs with caramel, for delivery to their customers.</em>[/caption]

The sudden hardship and need to adapt propelled Karen into action. Her business had always been cash-based, and Karen only sold to her customers in-person at her physical store. She started thinking creatively to find ways of selling wafers without face-to-face interaction. She decided to use social media to connect with her regular customers online and expand her market. Karen was already familiar with social media networks like Facebook and Instagram, but she learned about their potential to strengthen her business from Ovante. “Now everything is on social media,” says Karen of her new online sales. “Our biggest weapon is really that: social media.” Karen was given access to Ovante by Fundación dela Mujer, her mother’s financial provider, to help them strengthen their business.

Karen attributes the rise in sales from new customers to social media, describing it “like a wave, so when people try the product, they like it and they post it on their social media pages, and more and more people see it.” She’s selling on <a href="https://www.instagram.com/latorredulceria18/" target="_blank" rel="noopener noreferrer">Instagram</a>, <a href="https://www.facebook.com/latorredulceria" target="_blank" rel="noopener noreferrer">Facebook</a>, and her city’s digital directory. She hired a delivery person to carefully deliver her online orders to customers’ homes by moped, taking care not to damage the delicate wafers and sweets. Karen also knew from Ovante that she needed to be able to accept payments online. She added digital payment options to accept online payments from multiple vendors.
<h2>Developing business skills through online education</h2>
Before the pandemic began, Karen was one of the 15,000 Colombian microentrepreneurs who received access to Ovante, an interactive digital platform designed by <a href="/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener noreferrer">Accion Global Advisory Solutions</a>, and made possible by <a href="/accion-expands-digital-platform-to-support-low-income-microentrepreneurs-with-help-from-fedex" target="_blank" rel="noopener noreferrer">support from FedEx</a>. Ovante helps entrepreneurs develop digital understanding and business management skills and learn how to use financial products and services through a series of interactive modules. Ovante users build healthy financial behaviors so they can be resilient and plan for a better future. The pandemic was a spark for Karen to accelerate the plans she put together through Ovante to build a digital presence and use the internet to lift her business. “I found [Ovante] to be very practical. It taught me a lot that you don’t take into account, or you aren’t aware of, or maybe you thought weren’t important. I did learn a lot on the platform. I even put several things into practice that have served me well. I’d say the course is very good,” says Karen. Once she gained knowledge and confidence from Ovante, Karen was empowered to leverage digital tools to open opportunity for her business.

[caption id="attachment_22467" align="alignleft" width="287"]<img class="wp-image-22467 " src="https://content.accion.org/wp-content/uploads/2020/09/2018_Accion_Ovante_0116-2-e1601397141588-277x300.jpg" alt="Ovante, an edtech platform from Accion" width="287" height="311" /> <em>Ovante is Accion’s fully digital platform, designed to strengthen the management, financial, and digital capabilities of microentrepreneurs so they can build better livelihoods.</em>[/caption]

The COVID-19 pandemic is taking a devastating toll on low-income populations in Colombia and around the world. In its wake, the digital divide between the under-connected and hyper-connected is deepening. This time of crisis presents an opportunity and an urgent need to close the digital divide. Edtech, or educational technology, can help microentrepreneurs and informal workers acquire new skills and enter the digital economy — a critical move as the pandemic forces businesses online. Edtech platforms like Ovante provide easily accessible resources and information at a low cost. Ovante incorporates insights from Accion’s decades of experience providing financial skills training and education to empower entrepreneurs to improve their businesses in real-time. Ovante was designed using principles of human-centered design to offer practical, easy-to-use tools that incentivize behavioral change and help people overcome mental barriers and build confidence.

Participants can take Ovante’s courses from home on their mobile devices and on a flexible schedule that works for their lifestyle. Karen takes her courses at home with her mother. Access to an edtech tool like Ovante gave her the knowledge and the confidence to implement the changes needed to save her business. “I think that the pandemic is obviously bad, but I feel that it drove me [to keep going]. Thankfully we have done very well, and sales have gone up a little.”

Six months into her new model, Karen isn’t slowing down or losing optimism, saying, “I feel very good, more motivated than ever. The pandemic also made me understand that we must adapt and not stop dreaming. You have to keep moving ahead no matter what.”

<em>Learn how accelerating the adoption of edtech platforms can power financial inclusion during the pandemic in our webinar, <a href="https://www.accion.org/edtech-can-close-the-digital-divide-in-latin-america">Edtech can close the digital divide in Latin America</a>.</em>

<em>To learn more about Ovante, and how the tool may help your customers enter and adapt to the digital economy, please <a href="mailto:GLASsupport@accion.org">reach out to us</a> and let us know how we can support you.</em>

How the pandemic is spurring microentrepreneurs to go digital

Vikas Raj

My fireside chat at the Economic Times Digital Lending Summit on fintech startups and the challenges and innovation resulting from COVID-19

[embed]https://vimeo.com/461400524/4024ba9784[/embed]

India’s inclusive fintech startups have a once-in-a-generation opportunity to use their unique advantages to grow and help underserved individuals and small businesses during COVID-19. I joined The Economic Times Digital Lending Summit to share my views and explain why Venture Lab is continuing to invest during the pandemic.  I discussed:
<ul>
 	<li><strong><em>A dramatic disruption:</em></strong> The COVID-19 pandemic is the most dramatic disruption to business that many fintech startups have ever experienced. Facing average revenue drops of more than 50 percent in the aftermath of initial lockdowns, founders quickly moved their teams to remote work and cut costs significantly. Many made major changes to their companies to ensure runway and leaned on their investors for support, which Accion Venture Lab has provided. Companies are proving their resilience and finding ways to cut down and refocus costs for the long haul.</li>
 	<li><strong><em>A time for innovation:</em></strong> Lenders are facing unique challenges as consumers and micro, small, and medium enterprise (MSME) borrowers continue to struggle and the effects of moratorium wear off. But some lenders also see an opportunity to truly innovate and even thrive. We have seen companies activate their digital capabilities to continue serving their customers. Some are onboarding customers and sourcing loans entirely by WhatsApp, and others have turned to digital marketing to reach customers. Many lenders have shifted from operating as a physical business with tech components to operating as tech businesses with minimal physical components.</li>
 	<li><strong><em>Emphasis on digital:</em></strong> This pandemic has been very difficult for nearly everyone but is particularly so for the financially vulnerable. Still, we believe there is still reason to be optimistic. While the crisis has led to the worst economic downturn of our lifetimes, it has also unveiled a new urgency to accelerate digital solutions, especially digital solutions that help MSMEs move their businesses online. Digital transformation is no longer something that is ‘nice to have.’ It is imperative, and that has massive implications for data and distribution for fintech solutions</li>
 	<li><strong><em>Alternative platforms:</em></strong> The increasing need for digital tools opens opportunities for digital lending startups to engage investors and grow their businesses. At Accion Venture Lab, we are excited about what we call <a href="https://www.forbes.com/sites/vikasraj/2019/11/20/platform-fintechs-are-cominghow-should-startups-respond/#4c768fed2b0f">“platfins”: platform fintechs</a> that solve difficult problems for MSMEs, like delivery and distribution, and add digital financial services to their offering over time. This is particularly true in sectors like agriculture and education. We are on the lookout for startups that can leverage this proprietary data and distribution to serve SMEs, or business that enable non-financial platforms to expand their offering to financial services.</li>
</ul>
As the inequalities in our systems are exposed, it has become abundantly clear that financial inclusion is more important than ever. The innovators in fintech and inclusion — who were already using new data, artificial intelligence, and innovative engagement strategies to reach customers — have quickly become more relevant and more needed than ever.

This is the moment for inclusive fintech startups to become the next leaders in financial inclusion.

Now is the time to invest in and build inclusive fintech in India

Federico  Gomez Romero

Despite the challenging circumstances, this may be the best time for your fintech startup to accelerate growth in Brazil

Brazil has been hit especially hard by the COVID-19 pandemic, and the crisis is changing every aspect of society. Now that the most obvious and immediate effects have set in, we are beginning to see what the mid- and long-term consequences will be in the country.

I strongly believe that fintech will be one of the sectors that will emerge from this crisis both reinvigorated and transformed. As a fintech entrepreneur, you have the chance to rebuild a better Brazil.
<h2>Transforming uncertainty into new opportunity</h2>
It’s not a surprise that the macro landscape looks grim right now. The economy is <a href="https://blogs.imf.org/2020/06/26/outlook-for-latin-america-and-the-caribbean-an-intensifying-pandemic/" target="_blank" rel="noopener noreferrer">expected to contract around 9 percent</a> this year, and although analysts predict a positive rebound next year, the main players in the financial sector are still in shock. As a consequence of increased payment deferrals for loans, the current level of non-performing loans is unknown and financial institutions are navigating in the dark. The CEO of Itau referred to their strategy around managing these loans as <a href="https://www.fool.com/earnings/call-transcripts/2020/05/06/itau-unibanco-holding-sa-adr-itub-q1-2020-earnings.aspx" target="_blank" rel="noopener noreferrer">"more an art than science.”</a> I cannot find a better phrase to describe the current situation of the traditional financial sector. Amid all of this uncertainty, it is clear that fintech players will be better positioned to recover from the economic downturn if they can use alternative data sources to access updated financial information.

Those tech companies who already have access to real-time data will have an added advantage due to <a href="https://www.businessinsider.com/brazil-moves-forward-with-open-banking-2020-5#:~:text=The%20Central%20Bank%20of%20Brazil%20has%20released%20open%20banking%20regulation,the%20customer%20agrees%2C%20per%20Finextra." target="_blank" rel="noopener noreferrer">an open banking regulation released by The Central Bank of Brazil</a>, which will be fully implemented next year. In addition to the data they already have, fintechs will benefit from accessing additional information from their clients that allows them to provide a better, more personalized service. At the same time, the opportunities for fintechs to partner with banks will increase as banks seek to connect to third party providers and enrich their businesses.

But negatively hit sectors aren’t the only place where tech startups can find opportunities to offer financial services to the underserved. For example, agriculture is <a href="https://www.world-grain.com/articles/13958-record-soybean-shipments-forecast-for-brazil" target="_blank" rel="noopener noreferrer">posting record results</a>, and some industries within the gig economy, like last-mile delivery, are also growing more than ever before. There is a huge potential to layer digital financial services in these and other thriving sectors.
<h2>Data is king</h2>
Fintech companies are in an advantageous position when they have rich and timely data needed to make the right business decisions. And those data-driven companies that build strong relationships with customers by solving problems that aren’t financial — before embedding fintech solutions — are in an even better position. In the past, <a href="https://www.forbes.com/sites/vikasraj/2019/11/20/platform-fintechs-are-cominghow-should-startups-respond/#742436bb2b0f" target="_blank" rel="noopener noreferrer">we have explored how super-platform tech companies are doing this</a>, and now this approach is expanding across multiple sectors. For example:
<ul>
 	<li><a href="https://terramagna.com.br/" target="_blank" rel="noopener noreferrer">Terra Magna</a> has spent years building a huge database of farming regions and crop performance using high-tech satellite images. With a unique knowledge of the business, it is now starting to provide responsible financing to farmers.</li>
 	<li><a href="https://www.loopa.digital/" target="_blank" rel="noopener noreferrer">Loopa</a> is a startup that provides a free platform to MSMEs for credit card reconciliation, allowing them to have a better understanding of their business and solve cashflow inefficiencies. That type of relationship with customers is the one that provides infinite possibilities to add financial services.</li>
 	<li>Finally, <a href="https://www.smartmei.com.br/" target="_blank" rel="noopener noreferrer">SmartMEI</a>, one of our portfolio companies, is building solutions for the future of work. They understand the needs of a workforce that is changing every day and have built targeted financial products for an evolving workplace. The company started by providing simplified accounting services and has grown to offer a full suite of products.</li>
</ul>
<h2>But who is investing right now?</h2>
At the onset of the pandemic, capital immediately dried up for entrepreneurs. Many investors had to concentrate their efforts on helping their portfolio companies stay afloat, and others were too wary of the situation to keep investing. As Nigel Morris, partner of QED Capital, recently said in an episode of <a href="https://www.accion.org/a-great-company-going-into-covid-is-invariably-a-great-company-coming-out" target="_blank" rel="noopener noreferrer">VentureKast</a>, “We are going to see fewer tourists involved in VC in the fintech space.” The ones that will keep betting on the sector — and that have already restarted actively investing — are the true fintech specialists.

So, the big question is: who should you pitch your startup to in Brazil? Many great investors come to mind. This complete <a href="https://www.contxto.com/en/brazil/venture-capital-brazil-2020/" target="_blank" rel="noopener noreferrer">cheat sheet recently published in Contxto</a> lists some of the most active equity investors divided by industry and stage.
<h2>Don’t miss the chance to grow your startup, with some caution</h2>
The pandemic, despite all its negative connotations, is creating a temporary blue ocean for many fintechs. Now may be an excellent moment to fundraise and accelerate growth, but you should consider a few things before doing so:
<ol>
 	<li><strong>Don’t be afraid to be selective.</strong> Choose your customers wisely and make good use of your data collection and analysis capabilities.</li>
 	<li><strong>Mind your unit economics.</strong> This is a moment to grow, but definitely not at all costs. Bear in mind that this is a time ruled by uncertainty. The less you burn, the more runway to have to survive through the storm. VCs are certainly looking at this before investing.</li>
 	<li><strong>Valuations are coming down.</strong> Early-stage valuations in Brazil reached astronomical levels in recent years, and now it’s not uncommon to see up to 30 percent cuts. Believe it or not, this could be a good thing for your startup as you can align incentives with your investors and reduce the risk of a down round in later stages.</li>
 	<li><strong>Banks will catch up.</strong> This blue ocean won’t last forever, and open banking will facilitate access to information for all players. Start preparing for what will come after COVID-19, whether or not you work directly with banks.</li>
</ol>
<h2><strong>Accion Venture Lab is here to help the ecosystem grow</strong></h2>
Accion Venture Lab’s mission is to support innovative companies that help the financially underserved. We are always working to grow the fintech ecosystem — even outside our portfolio. This the first in a series of blog posts and webinars we will be hosting in the coming months, made possible by support from FedEx, to help the Brazilian fintech ecosystem thrive through the COVID-19 crisis. We invite you to follow along and <a href="mailto:accionventurelab@accion.org">reach out</a> if there is any way we can support you.

Now is the time for fintechs to accelerate growth in Brazil

Amy Stewart

Understanding customers’ needs, while critical, is only half the battle in the push for financial inclusion

Over the past decade, human-centered design methodologies have made their way from Silicon Valley to the financial inclusion sector. These methodologies, which are based on deep customer understanding, blue sky ideation, and rapid prototyping, have been touted as the silver bullet to address ongoing access and usage problems at the base of the pyramid, particularly with regard to digital financial services. <a href="https://www.cgap.org/sites/default/files/CGAP_Insights_into_Action_final.pdf" target="_blank" rel="noopener noreferrer">Initial results were promising</a>: in collaboration with leading design firms, institutions were able to develop innovative product concepts and prototypes grounded in the realities of customers’ lives.

However, these products haven’t always been as successful as expected. Many products do not ultimately gain traction with customers, and others are discontinued as institutional priorities shift. Some institutions have focused on customer needs but overlooked real operational and business constraints. Others miss the complexities surrounding customer behavior and financial decision making and inadvertently solve the wrong problem.

The need for digital, customized and responsive financial products and services is greater than ever. The economic fallout from COVID-19 has disproportionately affected those without the access, resources, or network to weather the storm. Innovative financial products can help people to recover from the crisis and restart in the new normal.

<img class="wp-image-22353 alignright" src="https://content.accion.org/wp-content/uploads/2020/09/accionGraphics_Aug26_Key-Tenets.png" alt="Key tenets of innovation: feasibility, desirability, and viability" width="461" height="332" />Innovative digital products must balance customers’ needs with organizational capacity and should be built upon a solid business case to ensure that the product is sustainable in the long term. This trifecta of desirability, feasibility, and viability seems intuitive but is not easy to implement — institutions must navigate competing priorities, limited resources, and tradeoffs between each area. <a href="https://www.accion.org/to-succeed-innovative-financial-products-must-be-desirable-feasible-and-viable/" target="_blank" rel="noopener noreferrer">Our latest white paper</a> explores the interplay between desirability, feasibility, and viability, and shares lessons learned from our recent experiences <a href="https://www.accion.org/achieving-financial-health-in-mexico-and-chile" target="_blank" rel="noopener noreferrer">working with five financial services providers and fintechs in Chile and Mexico.</a> With the <a href="https://www.accion.org/accion-and-metlife-foundation-announce-expanded-partnership-to-advance-financial-inclusion" target="_blank" rel="noopener noreferrer">support of MetLife Foundation</a>, we are working with these institutions to design and launch behaviorally informed products that build customers’ financial capabilities and ultimately improve their financial health.

A few key takeaways from the paper:
<ul>
 	<li><strong>There are many ways to learn from your customers</strong>: In-depth field interviews are an important channel for understanding people’ lives, but they can be time-consuming and aren’t always feasible — particularly during a pandemic. Customer data is a rich and often underutilized resource to identify trends and user pain points. We start our customer understanding with data analysis to build hypotheses that we can later test and refine through user research, in-person where possible, or remote.</li>
 	<li><strong>The most valuable feedback will come post</strong><strong>-product</strong> <strong>launch</strong>: No research or data analysis is as valuable as customer engagement with an actual product. Even prototyping has its limits: customers may sit and look at an application for an hour with an interviewer, but in reality, they may only have five minutes to use the product during their daily lives and experience constant interruptions, connectivity challenges, and competing demands for their time. Financial institutions should seek to go to market quickly with a minimum viable product, build in robust feedback loops, and plan for ongoing improvements.</li>
 	<li><strong>Consider innovation you can sustain: </strong>In the quest for innovation, institutions often feel they must ‘go big’ and develop completely new, groundbreaking solutions. But these products often don’t make it past pilot because the gaps required for long term success are too large. Innovative products often require new skills, updated technology, or new partnerships. A more feasible product can still be innovative without requiring a full-blown overhaul of the institution. It is critical to assess operational and technological capabilities from the start, understand the implications of proposed product design, and actively plan to address gaps. Incremental innovation can be just as powerful to drive customer usage and growth.</li>
 	<li><strong>Build a business case from the beginning: </strong>In the product design process, some design efforts prefer to focus on the idea before considering business case implications. While helpful to think out the box, we’ve found this can be dangerous. Without a business case, product ideas may never get the buy-in to move to pilot; or worse, they may lead the institution to invest time and money in products that don’t make business sense. It is not enough to create a product that customers love — it must drive growth, reduce costs, or generate revenue. We always start with a preliminary business case at the concept stage and then flesh out a detailed projection of user growth, revenue, break-even analysis, and assumptions.</li>
</ul>
Innovative ideas will not help customers reach their goals or recover from the pandemic if they cannot be implemented and scaled. In the long run, products that truly drive financial inclusion are those that balance desirability, feasibility, and viability. For customers, this approach translates to more intuitive financial products and services that are aligned with their behaviors and help build their financial health. For financial service providers, this approach leads to innovative products that are sustainable, use internal resources efficiently, and achieve business goals. Learn more about how we created sustainable and innovative products in Mexico and Chile by reading our paper, <a href="https://www.accion.org/to-succeed-innovative-financial-products-must-be-desirable-feasible-and-viable/" target="_blank" rel="noopener noreferrer">To succeed, innovative financial products must be desirable, feasible, and viable.</a>

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