The working poor may get paid just once a year.

Low-income farmers are vulnerable to extreme weather conditions.

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

Climate change affects the poorest households most.

We focus on global challenges

How we work

Priya Punatar

Yanina Seltzer

<div style="width: 391px" class="wp-caption alignright"><img src="http://accion-staging.flywheelsites.com/wp-content/uploads/2019/05/IMG_0825.jpg" alt="" width="381" height="508" />Azucena, a stay at home mom and former bank teller in Mexico</div>
Although Mexico and Chile are different markets, underserved consumers face similar problems improving their financial health. People and businesses rely on informal means to manage money, including storing cash in lockboxes and borrowing from family and friends. These methods are familiar and convenient, but they don’t provide the guidance, tools, and information people need to better manage their income and expenses, build reserves, and plan for the future.
In Chile, <a href="https://news.gallup.com/reports/233399/gallup-global-financial-health-study-2018.aspx">nearly half of the population</a> feels unsure about how they would cover their basic needs for more than a month if they lost their income. Following several financial crises, consumers are hesitant to trust<a href="https://www.accion.org/five-reasons-small-merchants-arent-using-financial-services-in-chile/"> financial institutions</a>, and many see working with banks as a last resort. One business owner in Santiago expressed a sentiment that we heard from many Chileans: “I would prefer to be indebted to my family than to a bank.”
We’ve seen similar patterns in Mexico, where, over the last three years, the percentage of adults who save at financial institutions declined from 15 percent to 10 percent. In an interview, Azucena, a stay-at-home mom who previously worked as a bank teller, told us that she and her husband prefer to <a href="https://www.accion.org/people-saving-money-mexico">save cash </a>in lockboxes in order to have money at home for unexpected emergencies. When it comes to credit, many people told us that they often hear negative stories about defaults, rather than positive stories about people using credit to improve their lives.
These behaviors indicate that FSPs could do more to better understand their clients’ needs and goals, build greater trust, and deliver more valuable products and services.

<div style="width: 4938px" class="wp-caption alignleft"><img src="http://accion-staging.flywheelsites.com/wp-content/uploads/2019/05/DSC_0388.jpg" alt="" width="4928" height="3264" />FSP employees participate in a <a href="https://www.accion.org/building-and-deploying-user-centric-products">human-centered design exercise</a> in Chile</div>
For decades, Accion has worked around the world to help FSPs deliver the products that underserved clients need to access, use, and benefit from the formal financial sector. Our hybrid approach combines human-centered design, insights into emerging technologies, and effective business models to create financial services that accelerate social and economic progress.
Over the next 18 months, Accion, <a href="https://www.accion.org/accion-and-metlife-foundation-announce-expanded-partnership-to-advance-financial-inclusion/">in partnership with MetLife Foundation</a>, will apply this approach with five FSPs in Mexico and Chile. We’ll work alongside these institutions to develop viable products and services that reach underserved clients and improve their financial health. This process will include building the business case for customer-centric products; managing organizational change; and designing, testing, and implementing product innovations.
We’ll begin by using human-centered design, which links product and service design to customers’ needs and lives. By first understanding the challenges that low-income clients face and the goals they want to achieve, FSPs can create products and experiences that are available at the right moments, provide visibility into users’ finances, and take into account customers’ aspirations. Such products can lead to improved financial health, better decision-making, and more informed financial management.
While considering our clients’ needs and their goals, we’ll integrate behavioral science to create products and experiences that support healthy financial behaviors and habits. For example, behavioral scientists know that people tend to prioritize the present over the future and put off tasks that feel stressful, like budgeting, saving, and long-term planning. By taking this tendency into account and creating products that balance the management of day-to-day finances with future planning, we can promote clients’ financial health.
Ultimately, our understanding of low-income clients’ needs, the application of behavioral insights, and our focus on business considerations will inform the creation and deployment of new products that improve underserved clients’ financial health and that are sustainable in the market.

To qualify for the program, FSPs developed product proposals that addressed low-income client needs using a customer-centric lens; each of their proposed solutions is tailored to improve clients’ financial health and advance the organization’s strategic business objectives. Our partners will adapt their proposals through several rounds of user research and ongoing support from Accion.
Below is a list of our five partners, their product concepts, and goals for improving the financial health of their customers.

We’ll work alongside our partners to refine their initial concepts into customer-centric, market-ready products and services that help underserved families and small businesses improve their financial health.
Over the next 18 months, Accion and our partners will be working closely with customers, and with the FSP teams responsible for interface, application, operations, marketing and customer engagement to deliver an excellent customer experience. While we will focus on client behavior change, Accion and our partners understand that institutional change management is the real starting point.
For these solutions to promote clients’ financial health over the long-term, we will work with our partners to consider the business case for each product and the organizational changes needed to implement them. It’s only by combining our unique insights into client needs and our understanding of inclusive business models that our partners will be successful. It’s critical to look at longer-term profitability and customer lifetime value to ensure that our partners’ new products advance their long-term strategic goals; we’ll test customers’ willingness to pay for new services throughout their development and adjust product design to increase value to the customer.
These products represent significant new investments that will demand structural support, so we’ll also work to ensure that our partners have the right people, processes, and systems in place to launch and sustain the new products, helping with upskilling or capacity building as needed.
To create a financially inclusive world – to provide entrepreneurs with the means of hiring more employees, parents with the ability to save for the future, and communities everywhere with the tools they need to accelerate social and economic progress – we must develop financial products that clients trust, use, and benefit from. We’ll work alongside our Mexican and Chilean partners to create new solutions and services that help underserved families and businesses improve their financial health, and that realize the vision of a financially inclusive world. Follow us here as we keep you updated on our progress and process with our partners.
<img class="alignnone" src="http://accion-staging.flywheelsites.com/wp-content/uploads/2018/08/MetLife-Foundation.png" width="247" height="115" />This brief is a part of our <a href="https://www.accion.org/accion-and-metlife-foundation-announce-expanded-partnership-to-advance-financial-inclusion/">Building Financial Capabilities and Strengthening Institutions through Customer-Centered Innovations project</a>, supported by MetLife Foundation.

“Financial health is achieved when an individual’s daily systems help build the financial resilience to weather shocks, and the ability to pursue financial goals.” Financial Health Network

Brief

<h2>The path to financial health</h2>
People around the world are continually aiming to improve their financial lives – they do so with whatever tools are available, whether formal or informal, and with whatever knowledge they have gathered. Every day, people work hard to grow their businesses, send their children to school, save, make ends meet, and troubleshoot during tough moments. Ultimately, they aspire for greater financial health and a better life for themselves and their families.
<img class="aligncenter" src="http://accion-staging.flywheelsites.com/wp-content/uploads/2019/02/CFSI-1.png" /><a href="https://cfsinnovation.org/">The Financial Health Network</a>, the  <a href="https://www.centerforfinancialinclusion.org/">Center for Financial Inclusion at Accion</a> and <a href="http://www.dalbergdesign.com/">Dalberg's Design Impact Group</a> developed a <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2017/03/FinHealthGlobal-FINAL.2017.04.11.pdf">framework of six indicators</a> for financial health in the developing world.
In order to help consumers improve their financial health, financial service providers (FSPs) can design products, tools and services that empower consumers to better understand and manage their finances and encourage them to improve financial habits. Focusing on financial health also has the potential to impact the FSP’s bottom-line: Gallup found that when customers feel that their bank <a href="https://news.gallup.com/opinion/gallup/176534/looking-customers-financial-table-stakes-banks.aspx">looks out for their financial well-being</a>, they are much more likely to be fully engaged with the bank.

However, in order for FSPs to successfully promote financial health, they first need to understand customers’ opportunities and obstacles to improving it.

Achieving financial health in Mexico and Chile

Featured brief

Amee Parbhoo

Startups focused on fintech for inclusion will need to adapt to succeed in a customer-centric future

Article

At Accion Venture Lab, we want to know we’re always investing in the most promising seed-stage fintech companies — startups with the power to transform communities and reach the underserved. That means we stay on top of <a href="https://medium.com/accion/7-fintech-trends-to-watch-in-2018-3fa96310732f">the trends in our dynamic industry and the markets we work in</a>, whether it’s the growth of neobanks in emerging markets, innovative models in insurtech, or renewed focus on financial health.

As we continue to track the forces shaping fintech for inclusion, we’ve seen that beneath innovations in products and services, the very tectonic plates of our industry are moving. As the world shifts, the landscape of fintech for inclusion will be affected — from the ecosystem startups work in, to the business models companies set up, to the customers they target. We’ve identified six fundamental factors driving these changes. As investors, these trends affect how we evaluate early-stage companies, but even as startups build and scale their businesses, they will need to adapt to succeed.
<ol>
 	<li>Tech platforms take over. While traditional financial institutions continue to position themselves as digitally innovative, we’re seeing only incremental progress across the globe. Many banks in emerging markets haven’t figured out how to partner with fintech startups yet and have shown a limited ability to go at it alone. But outside of traditional finance, we’ve seen companies offering financial services in many of our markets — in particular, <a href="https://www.cgap.org/blog/series/platform-economy-what-it-means-financial-inclusion">large tech platforms</a> like Facebook, Google, Amazon, and Ant Financial. These companies will continue to expand into Africa, Asia, and Latin America. As they do, we expect that small business and consumer lenders, as well as digital payments companies, will have to explore ways to remain relevant in their markets. The threat of big tech is heightened as newer and more local platforms in sectors like ride-hailing or food delivery also get into financial services, which is already happening in <a href="https://www.forbes.com/sites/eladnatanson/2019/07/01/from-food-delivery-to-fintech-the-new-app-convergence-in-brazil/#7a2fdc9057cc">Brazil</a> and <a href="https://www.forbes.com/sites/eladnatanson/2019/05/14/indonesia-the-new-tiger-of-southeast-asia/#3996254876ce">Indonesia</a>. But fintech startups shouldn’t just look at tech platforms as a competitive risk. They also may offer an opportunity. As tech platforms enter new markets, existing fintech startups offer <a href="https://techcrunch.com/2019/01/18/gojek-coins-ph-philippines/">out of the box and locally relevant acquisition targets</a> for expanding platforms.</li>
 	<li>Protecting customers matters more than ever. With more underserved individuals and businesses accessing fintech products, there’s a growing awareness of the need for <a href="https://www.accion.org/how-startups-can-both-empower-customers-and-protect-their-data">stronger consumer protection</a> — preventing overindebtedness, ensuring data privacy and security, communicating transparency in pricing, and much more. The introduction of GDPR has shifted data privacy laws in the EU, and while data protection remains <a href="https://qz.com/africa/1271756/africa-isnt-ready-to-protect-its-citizens-personal-data-even-as-eu-champions-digital-privacy/">a largely unregulated space</a> in many emerging markets, that <a href="https://www.standardmedia.co.ke/business/article/2001332615/no-crb-listing-for-loan-defaulters-before-6-months?__s=sebuus7a8bmixxhrbcir">is changing</a>. We will see consumers, investors, and regulators take a closer look at the issues, and fintech companies should be proactive in evaluating their consumer protection measures. The Center for Financial Inclusion at Accion’s Smart Campaign recently drafted <a href="https://www.smartcampaign.org/about/smart-microfinance-and-the-client-protection-principles/digital-credit-standards">Client Protection Standards for digital credit</a>. Expectations for startups to protect customers will continue to grow, but we’ve already been working with our companies to build out responsible practices, particularly around data protection (see <a href="https://www.accion.org/data-protection">our resource for fintech startups here</a>).</li>
 	<li>Customers have more fintech options. Fintech for inclusion startups are operating in an increasingly crowded space. Gone are the days when customers had limited options. As a result, it’s getting more <a href="https://liftoff.io/resources/report/mobile-finance-apps-2019/?__hstc=241307293.228d43615f0d5539896fac05c1a5f6ac.1561572502255.1561572502255.1561572502255.1&amp;__hssc=241307293.1.1561572502256&amp;submissionGuid=43ac8e38-041d-4a47-8ddf-1ad939e60778">expensive to acquire customers online</a> and getting more important for companies to focus on the right acquisition channels. This will involve finding win-win solutions with channel partners who have direct relationships with customers and are looking for their own ways to build a stronger value proposition. We’re scrutinizing the success of startups <a href="https://cfsinnovation.org/research/employee-financial-health/">working through the employer channel</a>. We’re also learning from what our own portfolio companies are doing working with retailers (like <a href="https://toffeeinsurance.com/">Toffee</a>, which sells ‘bite-sized’ insurance through retail partners in India), manufacturers (such as <a href="https://www.pula-advisors.com/">Pula</a>, which sells insurance to smallholder farmers through seed and fertilizer providers in Africa), and supply chain players (like <a href="https://www.tiendapago.com/">Tienda Pago</a>, which provides inventory finance for MSMEs through FMCG distributors).</li>
 	<li>New customers aren’t enough. If there’s one metric that’s often overlooked in the pitch decks we see for early-stage fintech companies, it’s customer lifetime value. Companies are often more focused on new customer growth metrics. However, with an increasingly competitive landscape in many markets and the cost of new customer acquisition increasing, the focus is shifting to how well a company can retain customers. There are many strategies startups can take to improve retention — such as introducing better terms or new products — but a major part of it will be improving the customer experience for underserved customers.</li>
 	<li>Fintech needs to do more. While the vision of fintech was an unbundled world where customers could pick and choose what they needed from an a la carte menu of apps and websites, <a href="https://www.pymnts.com/news/banking/2018/unbundled-banking/">many people</a> still have an appetite for an all-in-one solution. So, fintech companies are making moves to expand their offerings beyond their initial use cases — providing insurance on top of credit, business management tools along with payment solutions, etc. This rebundling creates challenges for fintech companies as they consider new strategic directions — when should they offer these new lines? How do they build the internal capabilities to offer these services? To whom do they offer them? But ultimately offering more comprehensive services may help solve the retention challenge fintechs face. We expect to continue to see new digital banks emerge, offering customers better services across all of their financial needs.</li>
 	<li>All-digital isn’t always the answer. Customers are changing as technology becomes cheaper, faster, and more readily available and as customer attitudes to this technology and financial services in general shifts. These changes present tremendous opportunities for fintech for inclusion startups to reach more of the underserved, but it will require startups to take a more nuanced look of their specific customers’ needs and preferences. While customers are becoming more comfortable with using technology, things are still slow to change. Nearly <a href="https://www.gsma.com/r/mobileeconomy/">2 billion of the 5 billion mobile subscribers remain offline</a>. Even where they have access to affordable handsets, reliable data connectivity, and stable power, many people find accessing digital financial services challenging. After all, these customers may not be familiar or comfortable with technology or financial products, and they may not have reason to trust financial service providers. The result is that fintech companies will need to continue <a href="https://www.accion.org/the-tech-touch-balance">balancing new digital technologies with appropriate human interactions</a> to engage, educate, and support their customers.</li>
</ol>
<a href="https://www.accion.org/bio/vikas-raj">Vikas Raj</a> also contributed to this piece.

Six vital trends changing the future of fintech

Apollo Agriculture supports smallholder farmers in Kenya

<a href="https://apolloagriculture.com/">Apollo Agriculture</a>, based in Kenya, delivers customized packages of seed, fertilizer, and insurance on credit for smallholder farmers. The farmer customers also receive valuable guidance in farming techniques and information on weather conditions that may affect results. Accion Venture Lab was an early investor in the company and continues to work with Apollo in an advisory capacity.

Technology is at the center of Apollo’s model. Its founders, Eli Pollak and Earl St. Sauver, built on their experience at The Climate Corporation using data to help farmers make better-informed decisions. Apollo’s systems rely on remote sensing technology, data science, mobile money, and voice-based trainings to make them cost-effective and scalable.

<img class="alignleft wp-image-17740" src="https://content.accion.org/wp-content/uploads/2019/02/Kenya_Nakuru_0034-1-1-1024x684.jpg" alt="Apollo agents using mobile phone in Nakuru, Kenya" width="500" height="334" />At the same time, Apollo’s results-driven, customer-focused approach means it must stay in close contact with farmers and gather feedback on what works and what doesn’t. Some of its staff’s work is almost entirely out in the field. For example, Rebecca, a field associate, works with both farmers and with the Apollo agents that visit their farms and set them up with their accounts. She finds the opportunity to speak directly with customers very rewarding. She says, “I’m most satisfied when the farmers come to me and tell me how the quality of their harvest has gotten better. When you help that farmer come from nowhere, to know something, and he appreciates you, it gets you excited that you got to help. This inspires me to keep doing this.”

Other Apollo staffers focus more on the technical systems, like Nairobi-based operations designer Javin, who collaborates with the tech team to identify and address issues in various processes. Even so, keeping up with customers is a central part of his work, as he explains, “ We have a call center team that gets feedback from the field. I also deal with farmer communication, making sure that we are in touch with our farmers as often as we can, reminding them to check payments.” He also goes out into the field himself to see how processes are working and solve problems as they arise.

Says Javin, “The small farmers grow food that the country depends on, both for the community and their own family. I like work that impacts communities. It feels great.”

Out in the field with the farmers

MSME funding from Socremo is enabling Palomisa to grow her business

Palomisa, who lives in Mozambique, produces and sells maheu, a traditional beverage made from grain that’s cooked in huge cauldrons over an open fire. “My mother used to make it, and when I drank it, I liked it. Not a lot of people make it, so I decided to make it as a business,” she explains. She first launched her business in 2002, and since then she has found a thirsty clientele. She’s even heard that people are trying to copy her, putting their own product into her bottles. 

<img class="wp-image-19502 alignleft" src="https://content.accion.org/wp-content/uploads/2019/08/Socremo_Clients_0025-1-1024x683.jpg" alt="Small business owner Palomisa bottling her home-brewed maheu" width="500" height="334" />

To help modernize her business, protect her product, and bring it into new markets, Palomisa plans to get a bigger loan from her bank, Accion portfolio company Socremo. “The business must grow and move to other areas. I would like to seal the bottles with a machine,” she says. “People from outside the country want maheu, but I can’t get it to them,” she adds.

So far, Palomisa feels Socremo has been a valuable supporter of her growing business. “I used to be scared to get a loan with a bank, but since I started with Socremo, I never regretted it. They are like a family. They’re like a mother and father, they help you. Everything I have, the house, the business, is because of Socremo,” she says.

Beverage maker shares her secret ingredient for success

The number of freelancers and self-employed people has boomed in the past decade, and there are now more than <a href="https://www.forbes.com/sites/elainepofeldt/2017/10/17/are-we-ready-for-a-workforce-that-is-50-freelance/#31f219cc3f82">57 million freelance</a> workers in the US alone. The segment is growing at 8 percent per year — roughly 3 times faster than the rest of the US workforce. According to a <a href="https://www.upwork.com/i/freelancing-in-america/2018/">survey</a> by Freelancer’s Union, by 2027, more than half of the American workforce is expected to freelance in some capacity as economic, demographic, and technological changes continue to shift society toward an uncharted future of work.

The ability to work independently and remotely is becoming universally accessible as technology improves connectivity and efficiency. With such rapid progress in the movement away from typical employment, the freelancing population must confront a host of unique financial challenges. From managing irregular incomes to filling the void of employer benefits, freelancers face an uphill battle. It doesn’t help that most banking and business management tools are too expensive for them and not specifically designed for their needs. It’s time for these financial tools fully catch up to this new era of working habits.

<a href="https://joust.com/">Joust</a>, Accion Venture Lab’s latest investment, aims to solve this problem by offering freelancers targeted financial products that help manage and smooth their unconventional cash flows. Specifically tailored to this underserved segment, Joust’s products and relevant financial tools are bundled into one, all-digital solution. By giving freelancers the means to deal with uneven cashflows and meet monthly expenses without dipping into personal savings, relying on credit cards, or selling assets, Joust hopes to lend Americans a hand as they tackle the ever-changing workplace environment.

At Venture Lab, we’re excited about a few core differentiators that position Joust to improve financial health for freelancers across the United States:
<ul>
 	<li>One-of-a-kind invoice discounting product, PayArmour: Late or non-payment is a serious issue almost <a href="https://blog.freelancersunion.org/2015/12/10/costs-nonpayment/">half of all freelancers</a> experience each year. Not only does this disrupt expected cash flows, it also requires time and resources to resolve. While some providers offer revolving credit and term loans to consumers and small and medium businesses, we have yet to see a company that provides an invoice-discounting product like PayArmour. PayArmour uniquely addresses this key market pain point by allowing users to opt-in to payment protection, creating assurance in receiving payment on time. This gives freelancers peace-of-mind and significantly improves their ability to take control of their personal financial management. Customers typically view PayArmour as more of an insurance product than a loan, putting the product in a different category than comparable offerings on the market.</li>
</ul>
<ul>
 	<li>Innovative neobank offering a convenient, easily expandable bundle of products: According to Joust, small business owners typically use more than ten separate financial products to run their day-to-day businesses. Recognizing the need for ease and convenience, Joust has structured its technology to allow for seamless and quick integration with various third-party tools and providers. It can onboard partners, integrate additional financial and business management tools, and launch products with minimal turnaround time. In the future, Joust will be able to quickly and seamlessly build out its product suite, leading to an improved customer experience, higher customer retention, and increased opportunities for revenue generation.</li>
</ul>
<ul>
 	<li>Ability to identify and execute partnerships for acquisition: Joust has already seen success onboarding a range of partners for customer acquisition and brand awareness. Joust hopes to leverage these partners to reach a broader, more diverse customer base and build win-win value propositions. Indeed, many companies that are successful in this disparate, disorganized segment are leveraging platforms that connect customers with tools and products.</li>
</ul>
We’re excited to partner with the Joust team to bring freelancers the financial services they need. As jobs continue to shift away from traditional, full-time employment to a gig economy, the number of individuals who need help with uneven cash flows, business management, and inexpensive insurance will only continue to grow. We believe Joust’s sophisticated and affordable product suite is up to the challenge, and we’re proud to support Joust on its journey to tackle one of the United States’ most pressing financial inclusion challenges.

Land of the Freelance? Helping US workers navigate the future of work

Pula employees share how insurtech is empowering smallholder farmers

“Change is the only permanent thing. We see a lot happening, like climate change, and for us to solve the issues of the smallholder farmers — we can’t use the normal way to solve issues,” says Jacobeth Barno, who works for Accion Venture Lab portfolio company Pula. In Kenya, where Jacobeth works, the past decade of change has led to a booming digital economy with <a href="https://globalfindex.worldbank.org/">91 percent of the population</a> using mobile money. 

But smallholder farmers haven’t always gotten to enjoy the fruits of the digital revolution, particularly when it comes to insurance. “Insurance has not been available to them,” says Jacobeth. “The reason is not that insurance companies don’t like them, but because the approach does not suit the smallholder farmers — it’s too expensive for them. I realized there is an opportunity to be able to reach these people with innovations to help improve their years and change their lives.”

Fintech innovation is crucial for Pula as it seeks to serve rural communities. “Technology has helped us reach most people. Through technology, we have been able to advise farmers on methods to use that can improve production and their farming. We use our phones for farmers to pay with and to do research,” says Pula employee Cleopas Busienei. 

But technology is only part of the story for Pula’s business model. Team members regularly visit communities to talk and share advice with smallholder farmers. Data-driven insights inform farmers about when and how to plant their crops to produce higher yields. Jacobeth sums up the company’s vision with, “I see a great future for Pula because we put out clients first and deliver on what we promise. We always come up with solutions. I want to see Pula help those who are in a struggle to scale up due to low-income, and I want us to help them.” 

With 1.5 billion smallholder farmers worldwide, who are largely uninsured, Pula has a massive opportunity to help people.  With its formula of mixing cutting-edge insurtech products with a personal connection with clients, Pula is making strides in empowering a vital, yet underserved, segment of the population with knowledge and confidence.

Driving resilience for farmers through tech and human interaction

In 2018, Accion continued building a world with economic opportunity for all, where everyone can access, use, and benefit from the high-quality, affordable financial services they need to build better lives.
Accion works tirelessly to empower people, small businesses, and communities. We find, fund, and grow companies creating new ways to meet the financial needs of the underserved. We protect clients and make sure the industry does too. And we work with dedicated partners who believe in the importance of creating a financially inclusive world.

From the CEO and Board Chair

Dear Friends,
Thank you. Your belief in financial inclusion and your support for Accion sustain our work to create a more inclusive world. Three billion people are left out of, or poorly served, by the global financial system. They have little to no access to the basic financial tools that could help them manage their daily lives, deal with emergencies, or seize opportunities. Their lives are so much harder than they need to be. We can and we must change this.
That’s our vision. Our work helps people access, use, and benefit from these basic financial services.  For the first time in history, new digital technologies may allow us to reach those who have been left out. We can provide them with the tools they need to help themselves. By harnessing these technologies, and with your continued support, we will create a financially inclusive world.
By advising, investing, and influencing, Accion has helped families and small businesses around the world realize their economic potential – and it’s your support that makes our work possible. In 2018, we:
<ul>
<li>Significantly increased our support for innovation. Through Accion Venture Lab and the Accion Frontier Inclusion Fund, managed by Quona Capital, we made impact investments in new financial technologies that allow us to offer better, faster, and more affordable services to the underserved. In the next few years, we will grow these efforts considerably.</li>
<li>Launched a global program with the Mastercard Center for Inclusive Growth to help small businesses successfully operate in and benefit from the digital economy by leveraging digital transformation. We aim to reach up to 10 million clients, including four million merchants, leading to greater financial inclusion, economic growth, and job creation.</li>
<li>Began a new partnership with MetLife Foundation to advance financial inclusion for underserved individuals around the world. The project aims to enhance financial customer engagement by building their financial capabilities.</li>
<li>Celebrated the Center for Financial Inclusion at Accion’s first decade of serving, protecting, and empowering clients, and began to plan how it will continue doing this important work for many years to come.</li>
</ul>
There’s so much work still to be done. The World Bank released new data showing that we’ve made important progress expanding access to formal financial services. But, at the same time, savings has declined, the use of formal credit is flat, and resiliency failed to improve in developing countries since 2014.
That’s why this work is so meaningful and urgent – and why your support means so much to so many. Thank you for helping us create a financially inclusive world.
Best,
<img src="http://accion-staging.flywheelsites.com/wp-content/uploads/2018/10/MES.png" /> <img src="http://accion-staging.flywheelsites.com/wp-content/uploads/2018/10/Diana.png" />
<img class="alignnone wp-image-19083 size-medium" src="https://content.accion.org/wp-content/uploads/2019/07/1_objectsBoard@2x-e1562793604796-300x215.png" alt="" width="300" height="215" srcset="https://content.accion.org/wp-content/uploads/2019/07/1_objectsBoard@2x-e1562793604796-300x215.png 300w, https://content.accion.org/wp-content/uploads/2019/07/1_objectsBoard@2x-e1562793604796.png 621w" sizes="(max-width: 300px) 100vw, 300px" />

Global impact

Client stories

<div style="width: 709px" class="wp-caption alignnone"><img class="" src="https://content.accion.org/wp-content/uploads/2019/04/Accion_Clients_0010-1.jpg" alt="" width="699" height="466" />Dr. David Akinpelu | Lagos, Nigeria | Accion Microfinance Bank client</div>
Accion Microfinance Bank (Accion MfB)’s support helped Dr. David Akinpelu purchase an X-Ray machine and make other improvements to his hospital that allowed him to provide better care to more patients.
In 2018, Accion MfB helped more than 250,000 savers and 45,000 borrowers like Dr. Akinpelu. Accion began helping the bank digitize and create new distribution channels, automated business processes, and an agent banking network to help more clients across Nigeria.
By helping Accion MfB integrate new technologies, more entrepreneurs like Dr. Akinpelu grew their businesses and shared their success.

<div style="width: 709px" class="wp-caption alignnone"><img class="" src="https://content.accion.org/wp-content/uploads/2019/06/2018_Accion_Ovante_0074.jpg" alt="" width="699" height="466" />Margarita Viviescas | Bucaramanga, Colombia | Ovante user</div>
Margarita Viviescas begins preparing floral arrangements for weddings, first communions, birthdays, and photo shoots as early as 3 o’clock in the morning.
Like many small business owners, Margarita wanted to better organize her work to ultimately find more clients and grow her income. So, at night, she began logging on to Ovante, a new platform Accion launched in 2018 with the support of FedEx that helped more than 5,000 small business owners better understand cash management, budgeting, and financial planning and adopt behaviors based on this new understanding.
By digitizing Accion’s award-winning client education program, Ovante’s engaging, interactive lessons helped entrepreneurs like Margarita develop the core business skills they need to flourish – no matter where they lived or when they worked.

<div id="attachment_19125" style="width: 709px" class="wp-caption alignnone"><img aria-describedby="caption-attachment-19125" class="wp-image-19125 size-medium" src="https://content.accion.org/wp-content/uploads/2019/07/810_4733-1-300x200.jpg" alt="" width="699" height="466" srcset="https://content.accion.org/wp-content/uploads/2019/07/810_4733-1-300x200.jpg 300w, https://content.accion.org/wp-content/uploads/2019/07/810_4733-1-768x513.jpg 768w, https://content.accion.org/wp-content/uploads/2019/07/810_4733-1-1024x683.jpg 1024w" sizes="(max-width: 699px) 100vw, 699px" />Vina Castillo | New York City | Accion in the U.S. client</div>
Vina was always an avid reader, but it wasn’t until she became a supervisor at a now-closed bookseller that she realized her passion for the work. “Nothing brought me more joy than putting a book into a customer’s hands and then having that customer come back and share how much they loved [it].”
After seeing all but one of the bookstores in her borough close, Vina began working with two former coworkers, Holly and Natalie, to open a bookstore of their own. The three women began taking the first steps toward opening Kew and Willow Books.
The key to any successful small business is to start with the community, and that’s just where Kew and Willow Books began. “It was great to see the interest and support from the very start,” Vina said. A crowdfunding campaign helped Vina and her partners secure a location and begin renovations, but they needed more capital to open. Too new to qualify for a loan from a commercial bank, they turned to Accion in the U.S. Its support provided Kew and Willow Books with the financing it needed to purchase its initial inventory and make other essential purchases. “The loan process was very thorough and helped us organize aspects of our business we hadn’t previously thought of. We feel very lucky,” Vina said. Without help from Accion in the U.S., Vina and her partners never would have opened their doors.
Vina now works at the bookstore full-time and finds inventive ways to keep the community at the heart of the store. Kew and Willow Books hosts open-mic nights, children’s events, and even showcases local talent. Vina, Holly, and Natalie celebrated their one-year anniversary in October 2018. In the next five years, they hope to build on their success and open a second location in Jackson Heights.

Our impact

In 2018, Accion continued giving people and businesses the financial tools they need to improve their lives:
<ul>
<li>Advise:Our teams provided targeted, strategic guidance and technical assistance for financial service providers and fintechs, as well as world-class oversight through board governance.</li>
<li>Invest: Our support helped companies create new ways to meet the financial needs of the underserved.</li>
<li>Influence: Our research and insights pushed the industry to better serve, protect, and empower clients.</li>
</ul>
By combining these elements, Accion helped underserved families and businesses — as well as the inclusive financial service providers that work with them — thrive. Accion’s Global Advisory Solutions team helped its partners use new technologies to increase the quality and lower the costs of providing financial services at scale, ensuring that more people could benefit from the formal financial sector. Accion Global Investments’ support developed inclusive, well-managed, scalable, and successful organizations. Accion Venture Lab continued investing in and supporting innovative fintech startups that improve access, quality, and affordability of financial services for the underserved at scale. Accion is also the anchor investor, general partner, and sponsor of the Accion Frontier Inclusion Fund, a global fintech fund for the underserved, managed by Quona Capital. The Fund continued to invest in companies that innovate to expand access to financial services to underserved consumers and businesses in emerging markets.
Each Accion team continued pursuing opportunities with the greatest potential to create a financially inclusive world:

Accion built strong partnerships to continue expanding our impact around the world. For instance, in 2018, Mastercard and Accion announced a first-of-its-kind partnership to transform millions of underserved micro and small businesses around the world. Through insights, innovations, and investments, we will power microbusinesses to successfully operate in and benefit from the digital economy. We aim to reach up to 10  million clients, including four million merchants, leading to greater financial inclusion, economic growth, and job creation.
Accion’s new partnership with MetLife Foundation began advancing financial inclusion for underserved individuals around the world. The project — Building Financial Capabilities and Strengthening Institutions through Customer-Centered Innovations — aims to enhance financial customer engagement by building their financial capabilities. Accion’s advisory team and CFI began supporting a select group of financial service providers in Chile, Mexico, Myanmar, Poland, and Serbia by designing digital tools and services informed by human-centered design; incorporating behavioral principles that spur usage and empower clients; and enabling financial service providers to effectively leverage and utilize data.
These partnerships allowed us to share global insights and best practices with the broader industry. For example, with the support of the Citi Foundation, Accion’s advisory team detailed how innovations in digital lending can enable financial service providers to offer better products to more underserved clients.
With support from the Mastercard Foundation, Venture Lab examined how eight of its portfolio partners calibrate their use of technology and human touch to improve customer acquisition, customer engagement, collections, and more in The Tech Touch Balance.
To share Accion’s insights directly with entrepreneurs, Venture Lab and the Mastercard Foundation began recruiting experienced business executives with entrepreneurial aspirations to create a successful inclusive fintech startup from scratch in Nigeria through the Company Builder initiative in 2018.
In 2018, Accion Venture Lab made its first investments in insurtech companies: new organizations that use emerging technologies to help protect some of the world’s most vulnerable people.
<ul>
<li>Lumkani uses an internet-connected heat detector to give South Africans living in informal settlements insurance that protects against the loss of life, shelter, and assets in the case of a fire.</li>
<li>Pula uses satellite data to assess how a client’s farm is performing and provides them with agricultural advice via text messages that helps protect against crop loss.</li>
<li>Toffee Insurance works with retailers in India to offer ‘bite-size’ insurance policies that cover what clients need most.</li>
</ul>
Because no single product or service is enough to create a financially inclusive world, Accion continued working holistically to ensure that the entire industry valued its clients, understood their needs, and helped them live financially healthy lives.
The Center for Financial Inclusion
The Center for Financial Inclusion at Accion (CFI) continued to engage and challenge the industry to better serve, protect, and empower clients. In 2018, CFI published new research assessing global progress toward financial inclusion and best practices to develop client protection, good governance, financial health, and responsible investment practices for financial institutions.

Accion in the U.S.

In the United States, Accion continued to help small businesses thrive and build vibrant communities by providing capital, partnering with trusted advisors who support entrepreneurs, and advocating for greater transparency and fairness in the small business lending industry. Accion in the U.S. is grateful to its partners, including the JPMorgan Chase Foundation, the Mastercard Center for Inclusive Growth, MetLife Foundation, the Sam’s Club Giving Program, and the W.K. Kellogg Foundation for their dedication and openness to trying new approaches to better support underserved small businesses.

Your support is powerful 

Your support provides the funding that allows us to sustain our work developing new products, markets, and policies.
Philanthropy supports everything that we do. With your help, we will build a financially inclusive world for this generation – where every individual has access to high-quality, affordable financial services and economic potential.
We thank you for supporting our work and we ask you to continue helping us <a href="https://give.accion.org/page/contribute/">build a financially inclusive world</a>.
&nbsp;

Board of Directors 

You can view Accion’s Board of Directors <a href="https://www.accion.org/about/our-board-of-directors/">here</a>.

In 2018, Accion continued building a world with economic opportunity for all, where everyone can access, use, and benefit from the high-quality, affordable financial services they need to build better lives.

Report

Accion 2018 Annual Report

Megan Peterson

Fintech platform Destacame partners with traditional financial services providers to support underserved customers in Latin America

Fintech may be disrupting the formal financial sector, but often, it’s a collaborative process. Traditional institutions are increasingly working together with fintechs to disrupt old operations that weren’t working and build a more efficient and inclusive system. Accion partner <a href="https://www.destacame.cl/">Destacame</a>, based in Chile and Mexico, is one of the fintechs that’s forming partnerships to drive financial inclusion. As a full-service digital platform for users to build their financial health, Destacame collaborates with more than 25 financial institutions to offer appropriate financial products to its users.

[caption id="attachment_17180" align="alignleft" width="500"]<img class="wp-image-17180" src="https://content.accion.org/wp-content/uploads/2019/01/2018_Accion_Destacame_Day2__0500-1024x682.jpg" alt="Nicolas Jaramillo sitting at a table in his office" width="500" height="333" /> “Destacame has the potential to become a key player or mediator in between banks and clients,” says Nicolas Jaramillo.[/caption]

Many of these users previously lacked access to financial tools. For too long, financial service providers have disregarded large markets because they were too costly to serve and traditional methods didn’t work to assess their creditworthiness. “Because of their structure and bureaucracy, sometimes they can't offer what people need, but this is changing. Banks are realizing the competition they have with other financial entities, and clients have more information and want to have options on financial products according to their needs,” says Nicolas Jaramillo, who co-founded Banco BCI’s MACH program focused on innovation in payments. He adds that “Destacame has the potential to become a key player or mediator in between banks and clients.” 

“Destacame was one the first companies that started about four years ago and implemented this new way of doing things — approaching a segment of people that I wasn't familiar with, the segment of individuals with no banking or credit history, poor access to credit, and poor relationships with banks,” says Nicolas. MACH partnered with Destacame to generate leads among the unbanked, and it’s been a successful partnership. “The clients that we received from them are good quality clients,” says Nicolas. In addition to sending good customers to MACH, Nicolas appreciates that Destacame helps customers manage their payments better. “Destacame can also be a mediator with clients to make sure they promptly pay their debts to the banks,” he says.

[caption id="attachment_17170" align="alignright" width="500"]<img class="wp-image-17170" src="https://content.accion.org/wp-content/uploads/2019/01/2018_Accion_Destacame_Day2__0035-1024x683.jpg" alt="Fernando Rocchi outside in front of the Fashions Park sign" width="500" height="333" /> Fernando Rocchi of Fashion’s Park discusses how Destacame helps users with debt management.[/caption]

Fernando Rocchi who supervises credit risk and collections for Fashion’s Park, also emphasizes Destacame’s effectiveness at helping manage debt. Instead of traditional debt collection strategies, Fashion’s Park worked with Destacame to give borrowers a special offer to incentivize repayment. “Customers have taken this new approach really well as we are not disturbing them with calls and putting pressure on them to generate the payments, but it’s completely the opposite — we are offering them an opportunity — that I would say is an excellent opportunity — to get your record clear of debt at a discount.” It’s an approach that’s been good for Fashion’s Park and its customers. “The results have been very positive on our side. We have recovered a significant amount of capital that was essentially lost.”

Destacame’s model of working with other players in the financial system is catalyzing needed change. As Virginia Chacón, Destacame’s head of operations, puts it, “we are pushing [traditional institutions] to be more innovative and better than before. We are pushing the banks to be more humane with people and improve their service.” Destacame’s partners echo this sentiment. “This last year, I have seen how useful Destacame is as a client in the way that they are changing the financial industry in Chile,” says Nicolas from MACH. Fernando at Fashion’s Park agrees that working with Destacame will lead to a bright future. “We at Fashions Park are focusing in a market with very low banking rates and the alliance with Destacame is going to be very beneficial as it will teach customers how to maintain a healthy credit history and the benefits that will come to them from getting a positive credit record.”

How Destacame is driving disruption through partnerships

Small business owners, their families, and their communities benefit from MSME finance in Nigeria

Running a business is hard work, which makes the fruits of the labor all the sweeter. Most entrepreneurs do what they do not only for the challenge of it, or because they enjoy what they do, but also because they want to be able to support their families, boost their own standard of living, and perhaps even give back to the community around them. Accion partner Accion Microfinance Bank (Accion MfB) is one of the leading providers of financial services to micro, small, and medium enterprises (MSMEs) in Nigeria, with nearly 40,000 borrowers in 2017.

[caption id="attachment_19290" align="alignnone" width="700"]<img class="wp-image-19290" src="https://content.accion.org/wp-content/uploads/2019/07/Accion_Clients_0006-1-1024x683.jpg" alt="Emmanual with stacks of tires to sale" width="700" height="467" /> Accion Microfinance Bank client Emmanual, a tire salesman, has seen his overall quality of life improve since he began working with the bank.[/caption]

Accion MfB client Emmanual, a tire salesman, has seen his overall quality of life improve since he began working with the bank. As he puts it, “When I started with Accion, I was living in a room. But today, I live in a two-bedroom flat. When I started with Accion I was single, but now I’m getting married.” He’s also been able to help support members of his family with the money he’s earned. He says, “From this business, I finance my brother’s schooling, and sponsor my other brother. I also take care of my aged parents, who are proud of me. I’ve done a lot through this business.”

[caption id="attachment_16288" align="alignnone" width="700"]<img class="wp-image-16288" src="https://content.accion.org/wp-content/uploads/2018/11/Nigeria_Accion_Clients_0013-1024x683.jpg" alt="An Accion Microfinance Bank agent uses a tablet to support client Chief Akintunde" width="700" height="467" /> Restaurateur Chief Akintunde talking with an employee of Accion Microfinance Bank.[/caption]

Chief Akintunde, another client who’s a restaurateur, has begun to see a third-generation benefit from his business. “All of my children have settled down and now live in their own homes. I thank the Lord because now I have grandchildren who are attending private school,” he says. He’s also tried to help children in his community whose parents can’t afford tuition, explaining, “On one or two occasions, when I’ve seen a child roaming around instead of at school, I will pay for them to go to school, buy their uniform, bag, and books.”

[caption id="attachment_18234" align="alignnone" width="700"]<img class="wp-image-18234" src="https://content.accion.org/wp-content/uploads/2019/04/Accion_Clients_0010-1-1024x683.jpg" alt="Dr. Akinpelu smiles in the halls of his clinic" width="700" height="467" /> Accion Microfinance Bank client Dr. Akinpelu gives back to his community.[/caption]

Dr. Akinpelu, who operates a private hospital, describes himself as “a community man.” He says that sometimes he will provide free services to those who can’t pay. He’s thankful to Accion MfB for helping to make it all possible. As he says, “When Accion helps me improve my business, they improve my life.”

Three entrepreneurs on growing their businesses and helping others

Lidya helps small business owners in Nigeria with efficient business funding

With eight children, Mr. Ononyia already has his hands full at home. He needs his small mattress-selling business to run smoothly to provide the time and money to support his family.

<img class="alignleft wp-image-18059" src="https://content.accion.org/wp-content/uploads/2019/03/Nigeria_Lidya_16-683x1024.jpg" alt="Mr. Ononyia with a mattress" width="400" height="600" />Since Mr. Ononyia started his mattress business in Lagos, Nigeria, in 2000, he’s seen how technology has changed the game. “Now instead of cash, customers transfer money [digitally]. You don’t have to go to the banks anymore,” he says. Like his customers, Mr. Ononyia increasingly relies on digital financial services. He looks to Accion Venture Lab’s portfolio company Lidya for the efficient financing he needs to run his business. Lidya’s proprietary fintech platform provides an easy online application process for small and medium enterprises to apply for funding. The technology uses alternative data sources to make intelligent loan decisions and disperse credit within 24 hours. “It’s very hard to get a loan in this country these days; I’m thankful to Lidya,” says Mr. Ononyia.

Lidya’s loans have helped Mr. Ononyia obtain funds quickly, allowing him to swiftly grow his business so he can support his family: “It affects my family positively — the profits are increased, which helps me put my kids in school.”

As Mr. Ononyia’s business grows and his children grow up, he sees how the success of his endeavor contributes to the future success of his family. He has used his own enterprise to teach his children about business and spark their interest in entrepreneurship. “My son is studying business and is my chairman,” he says with pride in his voice. Leading by example, he hopes to give his children the opportunities and skills to build bright futures for themselves. “I want them to have a better standard of life and see them better our country,” he says.

Nigerian fintech company enables this entrepreneur to run a business and support his family

Coryell Stout

A holistic approach to data protection is necessary to give users control over their information and keep it secure

At Accion Venture Lab, we work with fintech startups, most of them in emerging markets. The majority of their customers haven’t worked with any kind of financial service provider before, and so our portfolio companies are the first (and probably sole) holder of these individuals’ financial information. What’s more, many fintech startups have developed innovative ways to use alternative sources of data for determining customers’ creditworthiness, so in addition to records on assets, business revenues, and payment history, the company may also have mobile phone records, housing information, and so on.

In the rush of launching a new fintech, protecting client data may not be top of mind. But this data is both valuable and sensitive — and any fintech firm is only one data breach away from losing customer confidence. We advise our portfolio companies to take steps to safeguard their customers’ data sooner rather than later — and certainly before a crisis occurs. For inclusive fintechs, protecting customers is even more important because of the vulnerable populations they serve. For a smallholder farmer, microentrepreneur, or any other low-income individual, a data breach that drains a savings account, damages a credit score, or exposes confidential information is not just an annoyance — it can be an insurmountable setback.

So, where to begin? To help answer that question, we’ve developed a <a href="https://www.accion.org/data-protection">Data Protection resource</a> that will guide you through the process of assessing your company’s risks, understanding the various policies, protocols, and practices you can adopt to address those risks, and taking steps to implement a plan that fits your company’s needs.

We use the term “data protection,” as it encompasses both data privacy and data security. Data privacy focuses on which parties have authorized access to user data, and for what purpose. The data’s owner should always have control over what information is available and understand how it is to be used. On the other hand, data security relates to the systems in place to keep unauthorized entities from accessing and exploiting the data. So a complete data protection plan will cover everything from user transparency to technical solutions to regulatory compliance.

Our Data Protection resource contains not only a thorough explanation of how and why to put a data protection plan into place, but also an assessment to identify your company’s most urgent needs, a template to use in developing a data policy, options for taking this on in-house or hiring specialists to help, and much more. You’ll learn how often to update your plan, how to foster a staff-wide culture that supports data protection, ways to ensure your partners don’t expose you to vulnerability, and more.

And, if you do experience a data breach, the resource offers a response plan to help you identify the source of the problem, limit the damage, prevent it from happening again, and repair customer confidence.

If you’d like some extra help getting started with your data protection plan, join us for a <a href="https://register.gotowebinar.com/register/2335246549346892299">free webinar on July 30 from 9:30–10:30 am EDT</a>. We’ll walk through the resource and invite some of our portfolio company CTOs to share their experiences, discuss what they’ve learned about best practices, and answer your questions.

How startups can both empower customers and protect their data

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