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Digital solution Tienda Pago provides working capital for Cecilia and other small merchants in Latin America 

Article

Cecilia Polanco Tueros is a picture of resilience.

Even before the pandemic, she was no stranger to overcoming adversity. After a bad robbery, her family lost everything and went bankrupt. Her husband had to seek out a new job where he could bring in more income, and Cecilia took over the corner store that had previously been run by her mother-in-law.

Running her store keeps her busy every day, but she’s always working to balance the needs of her business and her family. While her three sons are now in their teens and twenties, Cecilia still makes time to be in their lives as much as she can — stepping away from the store to make breakfast for everyone and reconvening the family for lunch each day. She takes particular care to be there for her oldest son, who has Autism Spectrum Disorder. Before the pandemic, she arranged for him to get the therapy and support he needed over the years, and she is proud of the independent young man that he’s growing into. Being able to work close to home and tend to her family’s needs is important for Cecilia since she has to work such long hours, from before sunrise until late into the evening.

Cecilia and her family quickly felt the effects of the pandemic when it reached them in Lima, Peru. “COVID-19 was and still is very hard on us, as a family and as a business. Thank God neither me, nor my immediate family got infected. Sales are down, people are not coming as much, and they do not have money to spend,” she says. Though her store sells food and everyday essentials, many people in her community are struggling and buying less.

One thing that’s helping her manage while her sales have dropped is working with Tienda Pago. Accion partner Tienda Pago provides working capital for small merchants in Peru and Mexico so they can manage their inventory needs without being at the mercy of cash flows. This allows them to buy what they need and take advantage of busy times to sell more merchandise and grow.

“Tienda Pago is a solution,” says Cecilia, a smile breaking over her face. “It’s like a salvation, you might say!” She wasn’t so sure about trying it at first — “I hate taking a bank loan. I never do it,” she explains. But with Tienda Pago, the credit is so short-term she repays within a week and doesn’t lose a sense of control over her finances. Even though the loans are small, she’s still able to come out ahead.

Cecilia hasn’t been able to stock as many items in her store in the past year because of her decreased sales. The support she receives from Tienda Pago has helped her to stay afloat. “Tienda Pago helped a lot and keeps helping us. Tienda Pago did not charge me interest or late fees for the period we were in quarantine and not buying products.” Their team is staying in touch with Cecilia through phone calls and their digital app while they’re unable to visit in-person during the pandemic. <a href="https://www.accion.org/what-it-takes-for-one-family-business-to-stay-open" target="_blank" rel="noopener noreferrer">Tienda Pago is focused on helping small shop owners</a> like Cecilia through this crisis so they can stay in business long-term.

While Cecilia is still fighting to get through the challenge of COVID-19, she’s holding onto her dreams for the future. Access to working capital opens opportunities for small business owners to endure challenges and grow when sales rebound. Since she began using Tienda Pago’s services, Cecilia has found she can stay afloat during difficult times, and when things are good, she can order more merchandise for the shop and have money to spend on the things her sons need. Her oldest son has taken workshops to help him gain more skills and independence, her middle son has begun working as a dental technician, and her youngest is doing well in high school. “I want to grow, I want to expand,” she says, looking ahead to the future. Her dreams are growing bigger, too, as she envisions college degrees and professional careers for her sons, and hopes they’ll be able to support and take care of each other. Cecilia’s store is more than a job; it’s a pathway to a better future for her entire family.

A family business offers renewed hope and resilience

Michael Schlein

Financial service providers must stay focused on customers as they quickly embrace digital tools.

The pandemic has severely affected the world’s low-income populations. But by accelerating the pace of digitization, it has opened doors to financial services and the security and opportunities they provide. Digital financial services—and the tools needed to use them—are now vital for low-income families and small businesses to make it through this crisis and build resilience to future challenges.

Digitization is integrating financial services into nearly every aspect of life. <a href="https://www.accion.org/what-does-embedded-inclusive-fintech-look-like">Financial services can be embedded</a> into anything from utility payments to crop fertilizer subscriptions, which can help more people access credit, save money, and build credit histories that are essential for growth.

But digitization also risks worsening inequality, invading clients’ privacy, and taking advantage of people with less digital experience or poor access to the right tools, like mobile phones. Underserved people need new skills and expertise to successfully navigate the digital economy, and they need products that protect their privacy and personal information.

Accion has been working to ensure that innovations driving digital transformation and migration are inclusive, safe, and effective. Based on our experiences, here are three ways to ensure customers aren’t left behind amid accelerating digitization.
<h2>1. Expand digital access, fluency, and trust</h2>
Building customers’ trust in digital financial services, as well as their digital fluency, will be foundational an effective customer experience. It matters less where clients live, while it’s more important that providers can reach and stay in contact with them. Financial services providers need to rethink the purposes of physical interactions versus digital interactions so that the former occur less often and the latter become more frequent and more personal.

EdTech (education technology) can help underserved clients gain digital familiarity and learn how to accomplish a range of tasks, like setting up an online wallet or listing a product for sale. Accion has <a href="https://www.accion.org/how-the-pandemic-is-spurring-microentrepreneurs-to-go-digital">developed and deployed an interactive EdTech platform</a> called Ovante to help underserved entrepreneurs gain the management, financial, and digital expertise they need to succeed in our increasingly digital world. Ovante can help clients expand on their existing knowledge of social media to open new digital channels to selling their products and services.

Digital channels are a key conduit for financial service providers to improve their customer experience, and sometimes this means totally rethinking the customer experience. For example, many of Accion’s partners use group lending models to serve clients without any credit history by allowing people in the same communities to guarantee each other. Eighty percent of group lending participants are women, and 65 percent live in rural areas with few or no banks. Group lending has historically relied on frequent in-person interactions. But as social distancing became a necessity, our partners leveraged digital platforms to <a href="https://www.accion.org/can-group-lending-work-in-a-socially-distant-world">reimagine the group lending process</a> for the digital age.
<h2>2. Answer clients’ needs</h2>
As lockdowns end, low-income families will find their savings exhausted, their businesses stalled or bankrupt, and their future incomes uncertain. People will need new income streams and financial services to build resilience, restart their businesses, and establish new ventures.

Digitization means that more clients will use digital tools to rebuild their livelihoods, but providers must answer their needs by <a href="https://www.accion.org/to-succeed-innovative-financial-products-must-be-desirable-feasible-and-viable">crafting truly meaningful, customer-centric value propositions</a> that help them build resilience today and for the future.

To do that successfully during the pandemic, Accion has helped providers conduct interviews and surveys remotely to ensure that they capture the insights they need. Using client insights, we help institutions develop products and services that are desirable to clients and solve their specific problems. These offerings must also be feasible for the institution, given their capacity and operating models, and viable for the long term. Here, digital channels and platforms make a huge difference, and adopting them has become an urgent priority.

It’s so important to help people build financial resilience, and the customer experience needs to reflect that. If vulnerable clients’ unique needs aren’t sought out, understood, and addressed, their entire livelihoods could collapse and the economic recovery will be more difficult. Financial service providers must <a href="https://www.accion.org/win-from-within-how-fintech-startups-can-grow-by-building-value-for-existing-users">grow along with their clients</a> by understanding their needs, crafting products that meet those needs, and keeping them engaged throughout their journey as customers.
<h2>3. Ensure clients’ data and privacy stay protected</h2>
Digitized data can unlock more personalized and effective financial products that can help low-income people improve their lives and achieve their goals. Yet many emerging markets have weak effective consumer data protection regimes. When rules do exist, people with low levels of digital and financial sophistication may, in their eagerness to receive financial services, sign away their rights without even fully understanding them.

Protecting the privacy and security of customer data includes cultural and technical aspects, and vulnerabilities often lie at the intersection of the two. A provider can install best-in-class privacy and security software, but they must also build in privacy through a culture of protecting customer data. For example, providers can ‘right size’ their data collection methods to focus only on what is needed, implement strong and ethical data governance policies, and have dedicated staff responsible for their consistent application and use.

Accion is also focused on increasing transparency in providers’ data practices. We are analyzing how financial service providers use algorithms, which can be biased against underserved populations, in automated decision-making. We are monitoring emerging frameworks around the world to see what does and doesn’t work to advance financial inclusion while safeguarding data privacy, portability, and other consumer rights.

Cyber threats have also become a growing concern in emerging markets. Digital innovations, new products, and new processes are moving ahead at breakneck speed, but they’re leaving cyber security considerations in the dust, bringing new risks to financial inclusion-focused providers and to low-income and newly-banked customers. This makes it harder for people to trust digital financial services. We are working with our partners to <a href="https://www.accion.org/reimagining-cyber-risk-for-financial-inclusion-in-an-increasingly-digital-world">put in place cyber risk mitigation strategies</a> to ensure that the most underserved are protected.

Accion is engaging the industry to ensure that innovation doesn’t simply expand access to financial services—but also creates financial services that are safe, high quality, and designed to meet customers’ needs. These efforts are essential to ensure that the world’s three billion financially underserved people can build resilience to today’s challenges and threats arising in the future.

Three ways to ensure people aren’t left behind in the rush to go digital

Speakers

<h2>Español</h2>
Las mujeres han sufrido desproporcionadamente las consecuencias económicas de la pandemia, por lo que es vital garantizar que las innovaciones en productos y servicios financieros las apoyen y no las dejen aún más abandonadas. ¿Cuál es el papel de los datos para que esto ocurra? ¿Cómo pueden los proveedores de servicios financieros aprovechar el poder de los datos para eliminar los prejuicios y diseñar y ofrecer productos y servicios que aborden específicamente las necesidades de las mujeres? Escuche a los líderes de tres proveedores de servicios financieros y fintechs sobre los éxitos y retos que han enfrentado al recopilar y analizar datos para nutrir el diseño, el marketing y la entrega de productos de manera que aborden específicamente las necesidades en evolución de las mujeres durante la pandemia de COVID-19. Esta sesión estará disponible en español e inglés.

In this webinar, hear from leaders of three financial service providers and fintechs about the successes and challenges they’ve faced leveraging data to address the evolving needs of women during the COVID-19 pandemic.

Webinar

Women have shouldered a disproportionate share of the pandemic’s economic fallout, making it vital to ensure that innovations in financial products and services support them and don’t leave them further behind. What is the role of data in making this happen? How can financial service providers leverage the power of data to tune out bias and design and deliver products and services that specifically address women’s needs? <a href="https://accion.zoom.us/webinar/register/6216134949381/WN_Q52hFZ1WQPWPoR4R55eWOA" target="_blank" rel="noopener noreferrer">Register now to hear from leaders</a> of three financial service providers and fintechs about the successes and challenges they’ve faced gathering and analyzing data to inform product design, marketing, and delivery in ways that specifically address the evolving needs of women during the COVID-19 pandemic.

<img class="alignnone size-full wp-image-23418" src="https://content.accion.org/wp-content/uploads/2021/02/Webinar_IWD_021721-3.png" alt="International Women's Day 2021 webinar" width="2292" height="1200" />

How can data open opportunity for women during and after COVID-19?

Partnering for a better view of Accion’s impact

English

Global nonprofit Accion issued the following statements today on the passing of our friend and colleague Kurt Koenigsfest.  
A close personal and professional friend to many of Accion’s team members, Kurt filled many roles in his life as a father and family member, friend, community leader, and financial inclusion pioneer.  
At the time of his passing, Kurt served as CEO of BancoSol, Bolivia’s largest microcredit bank and longtime partner of Accion. A champion for financial inclusion, Kurt led BancoSol since 2000. Under his leadership, BancoSol has provided more than 1.5 million low-income consumers and small businesses with the high-quality financial services they need to grow and thrive. Throughout the COVID-19 pandemic, Kurt oversaw the rollout of digital financial products that allowed customers to continue to access essential financial services during lockdowns. 
Michael Schlein, President and CEO of Accion, said, “Kurt’s passing is a devastating loss, and our thoughts today are with his family and loved ones. Kurt was not only a leader, friend, and collaborator respected by many—his work pioneered the commercial model of microfinance that today is used across the world to help millions of low-income people access the basic financial tools they need to build better lives. He helped grow and transform BancoSol into a leading institution helping more than a million low-income Bolivians recover from the severe effects of the pandemic. His professional legacy lives on in the families, small businesses, and communities he helped support, and it will continue to inspire our work.” 
Esteban Altschul, COO of Accion and chairman of BancoSol’s Board of Directors, said, “Our hearts go out to Kurt’s family, friends, and colleagues as they cope with this profound loss. I have had the privilege to work closely with Kurt over the last decade, and he became one of my closest friends. His courageous efforts and dedication in the field of microfinance have made a measurable impact on the lives of Bolivians and underserved people around the world. The global financial inclusion community has lost one of its most inspiring leaders much too soon.” 
Accion first backed BancoSol in the 1980s as a charity, then supported its transition to a commercial bank dedicated solely to microfinance in 1992 as a significant minority shareholder and partner. Since then, Accion has continued to partner with BancoSol in the development and rollout of digital financial services for Bolivia’s underserved populations.

Español

<h2>Accion emite una declaración sobre el fallecimiento de Kurt Koenigsfest</h2>
Accion, una organización mundial sin fines de lucro, emitió las siguientes declaraciones el día de hoy sobre el fallecimiento de nuestro amigo y colega Kurt Koenigsfest.
Se trata de un amigo personal y profesional, cercano a muchos de los miembros del equipo de Accion: Kurt desempeñó muchos papeles en su vida como padre y familiar, amigo, líder comunitario y pionero de la inclusión financiera.
Al momento de su fallecimiento, Kurt ejercía como presidente ejecutivo de BancoSol, el banco de microcréditos más grande de Bolivia, socio de Accion desde hace mucho tiempo. Kurt, un defensor de la inclusión financiera, dirigió BancoSol desde el año 2000. Bajo su liderazgo, BancoSol ha proporcionado a más de 1 millones de consumidores de bajos ingresos y pequeñas empresas, los servicios financieros de alta calidad que necesitan para crecer y prosperar. A lo largo de la pandemia de COVID-19, Kurt supervisó el despliegue de productos financieros digitales que permitieron a los clientes seguir accediendo a servicios financieros esenciales durante los confinamientos.
Michael Schlein, presidente y CEO de Accion, comentó: &#8220;El fallecimiento de Kurt es una pérdida devastadora, y nuestros pensamientos hoy están con su familia y sus seres queridos. Kurt no sólo fue un líder, amigo y colaborador respetado por muchos: su trabajo fue pionero en el modelo comercial de microfinanzas que hoy se utiliza en todo el mundo para ayudar a millones de personas de bajos ingresos a acceder a las herramientas financieras básicas que necesitan para mejorar sus vidas. Ayudó a crecer y transformar a BancoSol en una institución líder que ayudó a más de un millón de bolivianos de bajos ingresos a recuperarse de los graves efectos de la pandemia. Su legado profesional sigue vivo en las familias, las pequeñas empresas y las comunidades a las que ayudó con su apoyo, y continuará inspirando nuestro trabajo&#8221;.
Esteban Altschul, COO de Accion y presidente de la Junta Directiva de BancoSol, dijo: &#8220;Nuestros corazones están con la familia, los amigos y colegas de Kurt cuando se enfrentan a esta irreparable pérdida. He tenido el privilegio de trabajar en estrecha colaboración con Kurt durante la última década, hasta convirtirse en uno de mis amigos más cercanos. Sus denodados esfuerzos y su dedicación al campo de las microfinanzas, han tenido un impacto medible en la vida de bolivianos y personas mal atendidas de todo el mundo. La comunidad mundial de la inclusión financiera ha perdido demasiado pronto a uno de sus líderes más inspiradores&#8221;.
Accion respaldó por primera vez a BancoSol en la década de 1980, cuando era aún una organización benéfica; luego apoyó su transición a banco comercial dedicado exclusivamente a las microfinanzas en 1992, como accionista minoritario y aliado. Desde entonces, Accion ha seguido colaborando con BancoSol en el desarrollo y despliegue de servicios financieros digitales para las poblaciones desatendidas de Bolivia.

Announcement

Accion issues statements on the passing of Kurt Koenigsfest

Esteban Altschul

After many months of difficult lessons and adaptations during the pandemic, three of our microfinance partners look ahead to the next chapter

When I reflect on 2020, I’m struck by the resiliency we’ve seen at every turn — from our employees, our partners, and especially, from the end clients that they serve. The obstacles have often felt insurmountable: there are predictions that anywhere between 20 and 30 percent of micro, small, and medium enterprises (MSMEs) in emerging markets will permanently close. Yet so many of these entrepreneurs are working hard to recover or to reinvent themselves.

While there is still a long road ahead in economic recovery from the COVID-19 pandemic, we have reasons to be optimistic about the coming year and the ability of our partners in financial inclusion to adapt and support their clients. A few of our partners — Kshama Fernandes, Managing Director and CEO of <a href="https://www.northernarc.com/" target="_blank" rel="noopener noreferrer">Northern Arc</a> in India, Taiwo Joda, Managing Director of <a href="https://www.accionmfb.com/" target="_blank" rel="noopener noreferrer">Accion Microfinance Bank</a> in Nigeria, and Kurt Koenigsfest, CEO of <a href="https://www.bancosol.com.bo/" target="_blank" rel="noopener noreferrer">BancoSol</a> in Bolivia — <a href="/leadership-in-the-time-of-covid-19-navigating-the-next-chapter" target="_blank" rel="noopener noreferrer">recently gathered</a> to reflect on the past nine months. They discussed how they have continued to adapt since the beginning of the pandemic, the difficult lessons they’ve learned <a href="/how-do-we-drive-an-inclusive-recovery-from-covid-19" target="_blank" rel="noopener noreferrer">since we first convened this group for a webinar in June</a>, and how they plan to meet the needs of their low-income clients in 2021.
<h2>How Accion Microfinance Bank, BancoSol, and Northern Arc are meeting the needs of small businesses</h2>
Small businesses have always played a crucial role in economies around the world, and supporting them has never been more urgent for our microfinance partners. BancoSol and Accion Microfinance Bank (Accion MfB) have many years of experience providing high-quality microfinance services to their clients through various challenges, but the COVID-19 pandemic has forced these banks to be flexible in new ways.

In addition to offering <a href="/how-do-we-drive-an-inclusive-recovery-from-covid-19" target="_blank" rel="noopener noreferrer">extra support with banking services</a>, BancoSol provided food staples, such as rice and sugar, to all clients who made voluntary repayments during the country’s 180-day moratorium. In Nigeria, Accion MfB also provided food to those whose likelihoods were affected. Additionally, to help clients pivot and succeed, Accion MfB started a special training program with experts on small businesses to engage their clients on how to restart or reinvent their businesses and partnered with online, commercial stores, and digital merchant platforms to enable about 4,000 of their customers to sell their products and services online.

Our partner Northern Arc is a financial inclusion platform that offers credit to the underbanked by supporting more than 150 financial institutions that serve millions of low-income borrowers all over India. They’ve provided loan repayment moratoria to support many of their clients. When financial institutions can take some pressure off of small business owners who are struggling with liquidity issues, these entrepreneurs can focus on meeting the needs of their community. Northern Arc shared that they’ve even seen interest in entrepreneurship increase during the pandemic as people seek new opportunities to replace the livelihoods they’ve lost.
<h2>Lessons learned since the start of COVID-19</h2>
While all three of these partners have been working on <a href="/data-is-crucial-for-driving-inclusive-growth" target="_blank" rel="noopener noreferrer">digital strategies</a> for several years, the pandemic pushed them to evolve at a faster pace to meet increasing client needs in an environment with new challenges, including lockdowns, moratoria, and public health concerns. As Taiwo noted, “The pandemic created a high level of urgency for us to continue on our <a href="/accion-microfinance-bank-adopts-risk-management-systems-in-nigeria" target="_blank" rel="noopener noreferrer">digital journey</a>.”

To make it easier for clients to access funding remotely during the pandemic, Accion MfB initiated an agent banking initiative, began using additional digital channels, and creating digital loan products where clients, especially those located in remote areas, can apply for loans. BancoSol also expanded the rollout of their virtual lending app so that more people could access banking services from their phones rather than rely on branches during Bolivia’s lockdown Between September 2019 and September 2020, transactions on BancoSol’s app increased by 141 percent.

As digital financial tools become more essential, all of our partners emphasized the need to combine tech and touch to reach customers where they are. As Kurt put it, “I think technology is going to help. It’s a powerful tool, but microfinance is a high-touch model.” Both Kurt and Taiwo stressed the importance of having staff guide their clients through the process of setting up digital accounts so they have the skills and confidence to use them effectively. Companies that find ways to continue to improve on efficiencies that can be gained from today’s digital world while still cultivating a personal relationship with their clients will ultimately have the best chance of succeeding in the long term.
<h2>Looking ahead to the next chapter of recovery</h2>
<blockquote class="pullquote--right">“Very quickly we saw that life must move on, and we just sort of kept at it…this was the momentum that kept us going, one foot after another”</blockquote>
As we’ve walked through this crisis with our partners, we’ve witnessed their resiliency and optimism. Because institutions like BancoSol, Accion MfB, and Northern Arc were prepared and flexible prior to the pandemic, they were able to quickly pivot and adapt as they were faced with challenges they had never encountered before. “The beginning of the pandemic, it seemed a little bit like doomsday. Very quickly, we saw that life must move on, and we just sort of kept at it, whether it was at the institutional level, the investor level, the client level, the employee level, and I think this was the momentum that kept us going, one foot after another,” said Kshama.

Though financial service providers have already made significant changes to adapt during the pandemic, much work lies ahead. COVID-19 continues to fuel uncertainty around the globe and has an outsized impact on vulnerable populations, but our partners are up to the challenge of helping people and small businesses most in need of support. Accion is working with our partners to provide the best solutions for these entrepreneurs to stay financially resilient and take their next steps to recover. We believe our partners, especially those that leverage data and technology effectively, will emerge with a better understanding of how to best meet their clients’ needs.

<a href="/leadership-in-the-time-of-covid-19-navigating-the-next-chapter" target="_blank" rel="noopener noreferrer">Hear more from Kshama, Taiwo, and Kurt here</a>, and learn about challenges and success stories from our partners around the world <a href="/covid19" target="_blank" rel="noopener noreferrer">here</a>.

Moving beyond “doomsday”: Inclusive finance in the time of COVID-19

Debdoot Banerjee

Elizabeth Winters

Small business owners in India reopen their businesses and rediscover hope for the future with customer-focused loan products and support from Annapurna Finance Ltd.

Twenty-six-year-old Rosina Das runs a small grocery shop in her village near Balakati, Odisha, in eastern India. She and her husband own a small lot of land, but their crops don’t bring in enough money for them to provide for their two children and meet their household needs. Because her family hasn’t been able to afford to install pump irrigation, they must rely on rain for their crops and can only grow during India’s kharif, or monsoon, season. Rosina needed another way to support her family, so she converted a small room in her house into a grocery store and became a small business owner.

When Rosina first started her business, she used her savings to buy grocery items to sell in her shop. Her business quickly took off since there weren’t many other stores in her village. Once Rosina opened her doors, she gave families in her community the ability to purchase fresh food and other essentials that weren’t able to buy before. Rosina availed of her first loan with <a href="https://annapurnafinance.in/" target="_blank" rel="noopener noreferrer">Annapurna Finance Ltd.</a>, a microfinance institution and Accion partner in India, two years ago as a group lending client to grow her small business even further. As her household income increased, her family was able to break their pattern of dependence on seasonal agriculture.

Like millions of other micro, small, and medium enterprises (MSMEs) operating in India, Rosina’s business has struggled greatly during the coronavirus pandemic. Not only did her sales plummet, but she also had a hard time getting new inventory to sell in her store as her suppliers were limited by transport restrictions during India’s strict lockdown. Without her regular customer volume or sufficient stock to sell, Rosina suddenly found herself without a stable income and unable to repay her small business loan installments. She learned about India’s loan moratorium from the other borrowers in her lending group and worked with Annapurna to reschedule her repayment dates and extend her loan tenure for two more months — a huge relief for her stalled business and her family.

[caption id="attachment_23303" align="alignright" width="393"]<img class="wp-image-23303" src="https://content.accion.org/wp-content/uploads/2021/02/papina-das-annapurna-finance-214x300.jpg" alt="Papina Das, an entrepreneur in eastern India" width="393" height="550" /> Papina Das owns a small dairy business near Balakati in eastern India.[/caption]

Rosina also learned about Annapurna’s midterm loan offering, a type of emergency loan that could help her restart her business. She received an emergency loan of 15,000 INR (205 USD) within seven days of application and purchased what she needed for her store. As demand has rebounded in her village, Rosina has provided the groceries that her community needs. Just a few months ago, she lost hope and couldn’t imagine her livelihood returning to normal. Now she is grateful to Annapurna for providing the support she needed to reopen her business.

Papina Das, 34, lives in the same village as Rosina, where she runs a small dairy business selling milk in her community and to nearby villages. She employs one other person from the village to help her feed and milk her cows. She started her business two years ago with a group loan from Annapurna. The other members of her lending group are also self-employed and own dairy businesses. Before COVID-19, Papina made a profit of more than 10,000 INR (137 USD) per month from her milk sales.

Papina’s sales dropped dramatically when the pandemic started. Residents of her village and the surrounding villages suffered greatly from the lockdown’s financial impact and many people lost their livelihoods. Even Papina’s regular customers stopped buying their usual volume of milk. Although milk is an essential commodity, her profits plummeted as economic instability decreased demand and people feared infection at markets.

Within one month of lockdown, Papina’s profits were cut in half. She was forced to lay off her employee and unable to pay her loan installments on time. After an Annapurna employee <a href="/how-three-financial-service-leaders-are-adapting-to-covid-19#annapurna" target="_blank" rel="noopener noreferrer">proactively contacted her by phone</a> and informed her about the loan moratorium during the lockdown, Papina opted to take a three-month moratorium on her payments. Like Rosina, Papina decided to take advantage of Annapurna’s midterm loan. Within three days of applying, she received a 20,000 INR (274 USD) loan. With this assistance from Annapurna, she’s rehired her assistant and restarted her dairy business. She’s also purchased another cow to speed up her business’s recovery, and her milk sales have nearly recovered to pre-pandemic levels.

A flexible loan can be the reason that a grocery store stays open in a village with few options for fresh food, or a dairy business continues providing milk to families in a rural community. 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 a new digital emergency loan product for group lending customers like Rosina and Papina. To build products that help entrepreneurs stay in business, we surveyed Annapurna’s small business clients to understand <a href="/critical-lessons-from-a-survey-of-small-businesses-in-india" target="_blank" rel="noopener noreferrer">their experience and confidence using digital tools, how gender gaps affect digital access, the role of misinformation, and more</a>. When financial services providers like Annapurna consider the unique challenges that their clients face, they can play a critical role in helping India’s <a href="/digital-tools-open-opportunities-for-women-to-thrive" target="_blank" rel="noopener noreferrer">women entrepreneurs use well-designed digital tools</a> to overcome the pandemic’s challenges and help rebuild their local economies.

Women entrepreneurs get back to business in India

Amy Stewart

People in Chile and Mexico are building their financial health using a personalized platform that meets them where they are

Karen is a single mom who lives in Santiago, Chile, with her young daughter. She went to school to study business administration but had to drop out to care for her daughter. Today, she works at a retail shop where she makes just enough to get by. Karen worries all the time — about paying the bills each month, about providing for her daughter, and about her growing credit card debt. She knows she needs to make a change, but she doesn’t know where to start. She tried to put together a plan to pay off her debt, but couldn’t figure out the total amount she owed, or identify the right person to call. Thinking about money makes her feel stressed, overwhelmed, and alone.

Accion’s partner <a href="https://www.destacame.cl/" target="_blank" rel="noopener noreferrer">Destacame</a>, a Chile-based personal financial management platform, sees many people like Karen, who come to their website looking for a way to get out of debt, access their credit report, and get answers they’ve been unable to find in the formal financial sector. The pandemic has only exacerbated feelings of financial insecurity in Chile. Destacame found that, due to COVID-19, 54 percent of their users are facing reduced or no income, 30 percent are unable to pay bills and almost all noted uncertainty and stress about their financial situation. Only 12 percent said they felt prepared for a shock like COVID-19.

Destacame knew that their users need more than just access to financial products – they need help to navigate their financial lives. This includes clearly understanding their current situation, weighing the pros and cons of the solutions available, planning to achieve goals, and receiving support and guidance along the way. As one user said, “I want to save and change my spending, but I don’t have any idea where to begin! I need an advisor — like Jiminy Cricket — who provides me with guidance and helps me to plan.”
<h2>An advisor and companion on the path to financial health </h2>
[caption id="attachment_23231" align="alignleft" width="300"]<img class="wp-image-23231" src="https://content.accion.org/wp-content/uploads/2021/01/Bienestar-financiero_.jpg" alt="New Destacame site design diagnostic feature" width="300" height="754" /> The diagnostic asks several questions to gauge users’ needs, including budgeting, preparing for unforeseen circumstances, and planning for the future. [/caption]

To truly support users like Karen, Accion and Destacame came up with an ambitious solution: completely redesign the Destacame experience and value proposition around financial health by adding simple diagnostics, customized user journeys, and digestible tips, tools, and product recommendations that match the user’s current reality. Beyond simply adding new products and features, the ‘Experencia Destacame’ (Destacame Experience) project involved changing the core of the platform: how it was structured, how the user interacted, and what value it sought to provide.

The new site design starts by clearly communicating Destacame’s customized offering to potential users and highlighting common challenges for the target user, such as, “Are you up to your neck in debt?” and “Are you stressed by your finances?” Once registered, users arrive at a personalized dashboard that assesses their financial health in three main categories: budget management, shock resilience, and long-term planning. This three-part diagnostic serves as the heart of the site redesign: based on their responses, users are directed to discrete experiences that offer the most relevant support for where they are today, including tips and recommendations, access to tools, and suggestions for financial products. The diagnostic also allows Destacame to isolate a recommended next step, encouraging users to take one first action rather than overwhelming them with a flurry of recommendations and products.

The team also developed two digital tools to support users in their journey towards financial health: a budgeting tool and an expense reduction tool. These pieces are foundational for all platform users: before saving for shocks or planning for the future, individuals must first get their budget in order and make sure their expenses don’t exceed their income. Both tools are easily accessible on mobile devices, require little time to complete, and quickly demonstrate and reward progress towards better financial habits.

The budgeting tool walks users through a series of screens to add income and expenses and calculate their savings. It helps users to consider and understand all possible expense categories and prompts users to return and update after a few months.

<img class="alignright wp-image-23233" src="https://content.accion.org/wp-content/uploads/2021/01/Bienestar-Finanicero-Presupuesto.jpg" alt="Destacame budgeting tool" width="310" height="589" />The expense reduction tool helps users to better manage their monthly cash flow by setting goals to reduce expenses in key categories, and entering spending once a week to assess progress. The tool is designed to be flexible enough to meet user needs (for example, selecting the day to receive reminders) but structured enough to encourage action, using positive language, and offering support.

Destacame recommends customers complete the tools based on their unique situation. For example, if a user is unsure that they can cover their monthly expenses, the platform will direct her to complete a budget first to gain a better understanding of her cashflow. After completing the budget, she may see that she is spending more than she’s bringing in each month and be prompted to work on reducing expenses via the expense reduction tool. After reducing expenses, she may be encouraged to start saving, and provided with recommendations for relevant savings products. Core to our hypothesis is the belief that providing users with the right tool or product at the right time is critical for uptake, usage, and impact.

<img class="alignright wp-image-23234" src="https://content.accion.org/wp-content/uploads/2021/01/Selección-de-gastos-BG-e1611591473407.jpg" alt="Destacame expense reduction tool" width="310" height="482" />
<h2>Impact to date</h2>
Since launching in early 2020, almost 700,000 users in Chile and Mexico have visited the redesigned site. Almost 35,000 people have completed the diagnostic, 60,000 have accessed the budgeting tool, and 10,000 have accessed the expense reduction tool. These conversion rates are consistent with broader usage of Destacame products and impressive for self-driven tools. But perhaps more impressive is that the team is already seeing users’ financial behaviors change: since July, 35 percent of the users that completed the budget tool created a budget for the first time, 20 percent of those that accessed the expense reduction toolset a savings goal, and 17 percent of those using the expense reduction tool actually decreased their expenses.

When the pandemic hit in March 2020, Destacame saw the potential to help Chileans struggling with unemployment, debt, and uncertainty by offering a way for them to navigate their financial situation and set a plan for recovery. They launched a marketing campaign with the hashtag #CuarentenaFinanciera (financial quarantine) highlighting their new resources and encouraging users to focus on building their preparedness, resilience, and overall financial health. In response to a new law permitting pension savings withdrawal, the Destacame team launched another campaign in July called #ChileSinDeuda (Chile without debt) to encourage Chileans to use this opportunity to pay off outstanding debt, and work with their partner banks to offer discounts. Through this program, they were able to offer 3.5 million Chileans an average discount of 60 percent on their outstanding debt.

To encourage sustainable behavior change, institutions need to design for and encourage healthy financial habits that work within users’ everyday lives. While designed to be as easy-to-use as possible, Destacame’s current tools still rely heavily on user input. Users must be highly self-motivated and take the time to update tools. In 2021, Destacame plans to roll out additional products, including a new mobile application and debit card, that automate assessment and support for financial health and reduce effort for users. For example, syncing budgeting and expense management with card transactions, allowing users to set limits for certain categories and create savings wallets, and supporting future planning by projecting income and expenses.

Little by little, Destacame users are progressing on their path to financial health, supported by a more personalized approach that meets them where they are. Destacame’s focus on serving the low-income segment in Chile has also been a market differentiator and offered opportunities for further expansion and innovation. Today, Karen has finally gotten out of debt and is starting to save up towards buying a house. She’s happy with how far she’s come: “Destacame has motivated me to pay off my credit cards quickly, and I was able to get out of debt because of them.”

<img class="alignleft wp-image-10268 " src="https://content.accion.org/wp-content/uploads/2018/08/MetLife-Foundation.png" alt="MetLife Foundation logo" width="165" height="77" />This product is a part of our <a href="https://www.accion.org/accion-and-metlife-foundation-announce-expanded-partnership-to-advance-financial-inclusion/" target="_blank" rel="noopener noreferrer">Building Financial Capabilities and Strengthening Institutions through Customer-Centered Innovations</a> project, supported by MetLife Foundation.

&nbsp;

Finding a path to financial health in Chile, one step at a time

Victoria White

The digital transformation of financial service providers has the potential to close the financial inclusion gender gap by bringing financial tools to more women

Despite the great strides made to accelerate global financial inclusion in recent years, women are still more excluded and harder to reach with financial services than men in most developing countries. Many women run small businesses from their homes and are more likely to be shut out of the formal economy. Women often have <a href="https://www.poverty-action.org/sites/default/files/publications/Womens-Economic-Empowerment-Through-Financial-Inclusion-Web.pdf" target="_blank" rel="noopener noreferrer">fewer opportunities</a> to gain an education, earn an income outside of their household, own land, inherit assets, and control their own income and financial futures.

In many developing countries, social norms continue to hold women back. From beliefs that women are meant to be caregivers and shouldn’t spend their time running a business to a reluctance to trust women to make financial decisions at all, these norms perpetuate gender gaps. In many Middle Eastern countries, opening an account requires approval from a male guardian. Furthermore, while mobile phone access continues to grow rapidly across the developing world, women are less likely than men to be digitally and financially literate or to own phones.

When it comes to lifting families out of poverty, fighting hunger, and educating the most vulnerable children, it’s crucial that we find ways to support women microentrepreneurs and small business owners. When women are able to earn a secure income, they are <a href="https://res.torontocentre.org/guidedocs/Barriers%20to%20Womens%20Financial%20Inclusion.pdf" target="_blank" rel="noopener noreferrer">more likely</a> than men to spend it on child welfare, including school tuition and medical care, household utilities, and food. Financial security also tends to empower women, giving them a role in the decision-making process in their households. Beyond empowerment and poverty reduction, supporting female entrepreneurs boosts economic growth, with estimates suggesting that advancing women’s equality can add <a href="https://www.mckinsey.com/featured-insights/employment-and-growth/how-advancing-womens-equality-can-add-12-trillion-to-global-growth#" target="_blank" rel="noopener noreferrer">$12 trillion to the global economy</a>.

Innovative products and services, including new digital financial service offerings, can help us reach more women and close the financial inclusion gender gap. Fintech is already playing a <a href="https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2020/06/29/The-Promise-of-Fintech-Financial-Inclusion-in-the-Post-COVID-19-Era-48623" target="_blank" rel="noopener noreferrer">major role</a> in closing gender gaps in Middle Eastern and African countries. In Côte d’Ivoire, for example, women are <a href="https://deeply.thenewhumanitarian.org/womensadvancement/articles/2018/04/19/gender-gap-in-bank-account-ownership-hasnt-shifted-in-seven-years" target="_blank" rel="noopener noreferrer">just as likely</a> as men to have a mobile money account, while men are twice as likely as women to have a traditional bank account.

However, in many Asian and Latin American countries, traditional financial inclusion services tend to do more to close gender gaps than digital ones. Part of the variation across countries can be explained by obstacles that digital tools cannot directly overcome, such as social and cultural norms. Regulators can play a role in shifting norms by introducing legislation promoting gender equality while taking into account the beliefs and the contextual constraints that shape those norms. For example, they could remove any regulatory barriers that restrict women from having their own bank accounts.

Nevertheless, digital solutions appear particularly well adapted to the other constraints women face. We’re supporting an array of financial service providers that bundle digital financial products with the educational services needed for women to gain the skills and comfort needed to use them properly.

Our partner DAWN Microfinance in Myanmar — where the population has rapidly adopted smartphones in recent years — embraced their own digital transformation and is now implementing digital field applications to help loan officers better serve their clients, most of whom are women. DAWN is also leading training sessions to reach the women-led businesses that lack access to formal financial services. No longer having to undertake much of the loan process manually, loan officers can spend more time finding and supporting clients.

[caption id="attachment_22007" align="alignright" width="356"]<img class="wp-image-22007 " src="https://content.accion.org/wp-content/uploads/2020/08/Daw-Amar-Myint_3-Swenyein-Swenyein-1-300x225.jpeg" alt="" width="356" height="267" /> Daw Amar Myint prepares delivery meals from her restaurant in Yangon, Myanmar.[/caption]

“Finally, I can spend more time with my customers,” DAWN loan officer Aye Aye Myint <a href="/women-entrepreneurs-empowered-by-technology-in-myanmar" target="_blank" rel="noopener noreferrer">tells us</a>. “The women we are helping now are running their own businesses. They are standing on their own two feet … some women can now rent and open big stores when they used to have just small shops.”

Daw Amar Myint, a client of DAWN, owns a small restaurant serving up traditional Myanmar cuisine in Yangon, Myanmar. When the pandemic hit, she was forced to close her doors and <a href="/digital-tools-open-opportunities-for-struggling-business-owners" target="_blank" rel="noopener noreferrer">turned to social media to sell delivery meals online instead</a>. Because she’s able to sell online, she’s better positioned to withstand the pandemic. DAWN is giving their small business clients like Daw Amar increased support and flexible payment options so they can overcome this crisis and thrive into the future.

Ovante, our <a href="https://www.worldsummitawards.org/2019/12/10/meet-the-40-winners-of-2019/" target="_blank" rel="noopener noreferrer">award-winning</a> digital business education platform has made a major impact on the lives of women entrepreneurs across Latin America. Using interactive tools, including videos and techniques like gamification, Ovante helps users become more financially and digitally savvy. 92 percent of its users say it is their first time using a digital platform.

Margarita, one of over 12,700 woman entrepreneurs Ovante has supported, significantly <a href="/margarita-prepares-her-business-for-the-digital-age" target="_blank" rel="noopener noreferrer">improved her florist business</a> using the financial and digital concepts she learned from the platform. Ovante is providing her with exposure to digital technology as she learns how to organize her finances, reach new customers, and use social media marketing and branding. Entrepreneurs can complete Ovante’s online modules at home at a time that best suits their schedule. In discussing why flexibility matters to her, Margarita exclaimed, “I think it is very helpful that Ovante is digital because you can use it anywhere! It also solves the problem of limited availability of time because there is no set time to use this platform, which makes it more convenient.”

<img class="aligncenter wp-image-17329 size-large" src="https://content.accion.org/wp-content/uploads/2019/01/2018_Accion_Ovante_0083-1024x683.jpg" alt="" width="1024" height="683" />

Karen Yesenia Torres Villamizar and her family own a bakery in Bucaramanga, Colombia. Because her business had always been cash-based, and Karen only sold to her customers in-person at her physical store, she had to adapt quickly during the pandemic. Because she gained the knowledge and confidence to use digital tools from Ovante, <a href="https://www.accion.org/how-the-pandemic-is-spurring-microentrepreneurs-to-go-digital" target="_blank" rel="noopener noreferrer">Karen found a way to keep her business open</a> for delivery by promoting and selling her sweets online.

Innovative financial products and services can help women entrepreneurs like Daw Amar, Margarita, and Karen overcome the digital and financial literacy barrier that many women face. When financial service providers can develop digital tools that can be used entirely from home, without the need for face-to-face interactions that might otherwise prevent women from accessing them, more doors open for women entrepreneurs. However, providers must consider how they can develop products to reach women who don’t have reliable access to smartphones and digital tools, otherwise, they risk worsening the digital gender divide. As women become financially empowered by new opportunities, they can break through arbitrary barriers they have faced because of their gender. While financial providers may not be able to address cultural and social norms head-on, they can play a critical role in helping women overcome them.

Digital tools open opportunities for women to thrive

Raliat Sunmonu

Federico  Gomez Romero

Small businesses create half the world’s jobs, but they need useful digital financial services to survive and thrive

Small businesses play a vital role in communities around the globe, not only by providing goods and services, but by creating jobs. In fact, <a href="https://www.worldbank.org/en/topic/smefinance" target="_blank" rel="noopener noreferrer">half of the world’s jobs</a> come from micro, small, and medium enterprises (MSMEs). Small businesses alone account for <a href="https://www.worldbank.org/en/topic/smefinance" target="_blank" rel="noopener noreferrer">half of the global GDP</a>. For many of these businesses, accessing finance is a struggle. We’re constantly working to find and invest in financial service providers that empower the world’s MSMEs, especially in the poorest regions. As access to mobile phones and the internet grows, digital financial services have the power to bring much-needed support to the most vulnerable communities and ultimately open opportunities for new jobs.

Digital financial tools that are accessible via mobile phone have been a game-changer for financial inclusion. In sub-Saharan Africa, the percentage of adults with bank accounts increased from <a href="https://globalfindex.worldbank.org/sites/globalfindex/files/referpdf/IFC088%20-%20FINDEX%20Note%201_DRAFT%202.pdf" target="_blank" rel="noopener noreferrer">34 percent to 43 percent between 2014 and 2017</a>, and the majority of these gains can be attributed to mobile money accounts.

<a href="https://www.gsma.com/newsroom/press-release/gsma-5g-moves-from-hype-to-reality-but-4g-still-king/" target="_blank" rel="noopener noreferrer">GSMA estimates</a> that, by 2025, over 70 percent of the world’s population will have mobile phones. This growth will be driven by developing countries with the most underbanked populations, creating vast potential to bolster MSMEs and ultimately boost job creation.
<h2>Helping microentrepreneurs embrace digital tools</h2>
Still, barriers stand in the way of some MSMEs’ ability to embrace technology. Young microentrepreneurs tend to be tech-savvy but older ones tend to be less confident transitioning to new, unfamiliar tools. We’re investing in financial service providers (FSPs) with innovative strategies to train microentrepreneurs to confidently use digital tools that will help their business survive and grow.

Helping microentrepreneurs is especially urgent as COVID-19 has wreaked havoc on traditional, in-person businesses. MSMEs that have at least partially digitized their business and can accept digital payments have proven to be more resilient. Our FSP partners are on the frontline of the pandemic supporting the most underserved essential businesses — including mom-and-pop shops that sell food and medicine. , These institutions are accelerating their own digital transformations and helping their customers to embrace digitalization as well. They are rapidly designing new digital products and training clients to use digital tools so that these vital businesses can stay open and keep providing jobs in their community.

In Nigeria, our partner <a href="https://www.accionmfb.com/" target="_blank" rel="noopener noreferrer">Accion Microfinance Bank</a> has helped ensure that MSMEs can continue to sustain local economies and create jobs. Their digital products and services include a mobile app that allows customers to access financial services remotely, which has seen broader use after a recent marketing boost. Interbank transfers and mobile airtime purchases made through the app have increased far beyond pre-pandemic levels. Accion Microfinance Bank sends agents to support customers who can’t access digital channels or safely visit a branch, and hosted a series of well-attended free webinars to support their customers. They're now working to expand their agent network even further to bring financial services to customers in hard-to-reach locations.
<h2>Leaning on fintech innovation to close credit gaps</h2>
As established financial institutions are driving financial inclusion by creating useful digital financial tools, fintech startups are also helping to close gaps in underserved communities through innovative products and services. In Mexico, there are over 5 million MSMEs, but commercial banks often refuse to serve them because they are small, informal, and not seen as profitable, or because their owners lack credit history. Informal lenders exist but often charge exorbitant interest fees. Our fintech partners in the region, however, have developed innovative digital lending services that can close the credit gap.

<a href="https://konfio.mx/" target="_blank" rel="noopener noreferrer">Konfio</a> is an online lending platform that uses innovative credit algorithms and alternative data analysis to help MSMEs in Mexico obtain affordable working capital loans. Along with investing in them, Accion Venture Lab sent a team to help them define priority geographic areas and customer segments so that they could identify where to focus their marketing efforts and expand their product offering. By creating products that respond to customer needs, Konfio has grown from serving a few hundred businesses in 2014 to being the leading online lending platform for small businesses in Mexico and a global model for how inclusive fintech can be successful.

<a href="https://www.tiendapago.com/" target="_blank" rel="noopener noreferrer">Tienda Pago</a> is another fintech partner that currently operates in Peru and Mexico. They use a digital platform to provide digital supply chain finance services to underserved small businesses. They’re supporting mom-and-pop stores to help finance the upfront purchase of the goods they sell. Tienda Pago’s agents work with existing supply chains and provide one-on-one guidance through onboarding before their algorithm analyzes data collected by the agent to produce a credit score and loan amount. While the management of the loan payouts and the payments for consumer goods deliveries is through their digital app, the Tienda Pago staff is only a call or text away if needed.

When small businesses have access to high-quality and fair financial services, they are better able to survive the shocks of crises like the COVID-19 pandemic, keep the employees they’ve hired, and eventually create more jobs. Digital technology, along with proper training and customer support, has proven to be an indispensable facilitator when it comes to supporting underserved microentrepreneurs in the world’s poorest regions. As mobile phone and internet access spreads, we’ll continue working to open opportunities to underserved small businesses so that they can thrive and help their communities prosper.

Opening opportunities for job creation in developing countries

Shannon Dwyer

Using a digital platform, Accion Venture Lab investee Self Financial gives people a pathway to build credit and savings, so they’re better prepared to face life’s challenges 

Millions of Americans struggle to apply for apartments, auto loans, and credit cards because they have a poor credit score and burdensome debt. Others, especially immigrants and those who come from low-income backgrounds, may not have a credit history at all. Without the safety net that credit and savings provide, people can fall further and further behind in times of crisis. Our Accion Venture Lab portfolio company <a href="https://www.self.inc/" target="_blank" rel="noopener noreferrer">Self Financial</a> is in the business of helping people become financially resilient through life’s challenges by offering tools to build a credit history and save.

[caption id="attachment_23088" align="alignleft" width="300"]<img class="size-medium wp-image-23088" src="https://content.accion.org/wp-content/uploads/2021/01/self-financial-mobile-app-300x300.jpg" alt="Self Financial's Credit Builder mobile app" width="300" height="300" /> Self’s user-friendly app allows customers to easily track their progress as they pay off their loan and improve their credit score.[/caption]

“Over 100 million Americans either don’t have a credit score or have a low credit score. The challenge is if you need a credit history in order to get credit, then how do people get started? And so that’s where Self comes in. We’re creating the opportunity for people to help themselves,” says CEO James Garvey. The Self Credit Builder Account offers people an opportunity to build credit history and emergency savings, minus interest and fees — especially pertinent for people who encounter unexpected medical bills or need a financial boost because of the pandemic. Self provides a loan for customers to purchase a certificate of deposit, which they then pay back in installments. Because the purpose of the loan is to build credit history, customers don't get the loan proceeds upfront; instead, the money is held in a bank account while the payments are made. Once their loan is paid off, they receive the principal back, minus interest and fees, and their credit scores may benefit as they pay back their loan responsibly.

<img class="alignright size-medium wp-image-23089" src="https://content.accion.org/wp-content/uploads/2021/01/anton-self-financial-client-300x291.png" alt="Anton J, a client of Self Financial" width="300" height="291" />Anton J. managed to raise his credit score by 121 points since he began using Self’s Credit Builder product in August 2019. He was drawn to “the fact that it was literally my money that I was saving while also building my credit at the same time.” Now that he’s improved his credit score, he can access loans that weren’t available to him before. “It’s helped me improve my credit to the point where I was able to move into my first home, and I’m looking into [getting] a car in the next few months,” says Anton.

Sharita Humphrey experienced a time in her life when she struggled financially and <a href="https://www.self.inc/blog/homeless-to-homeowner-building-credit" target="_blank" rel="noopener noreferrer">experienced periods of homelessness with her two young boys</a>. She learned how to build financial health and used Self’s product to improve her credit, eventually rebuilding it to the point that she was able to access unsecured credit products and a home for her family. “I was able to get myself into a position where I have and maintain excellent credit. I’ve broken the chain of generational debt and generational poverty,” she says. “I’ve become my family’s trailblazer.”
<h2>Finding financial stability during COVID-19</h2>
A significant number of Self’s customers have been negatively impacted by the pandemic. In response to a recent survey in conjunction with Financial Health Network, 48 percent reported being laid off or furloughed due to COVID-19, nearly half have reported a decrease in income, and many have lost their health insurance. In addition to their standard 15-day grace period for late payments, Self is offering further flexibility and support to their customers who are struggling during the pandemic, like giving customers the option to close their accounts early without a penalty fee.

Many customers are still benefiting from Self’s credit product during the pandemic. One customer shared that their income was reduced due to COVID-19, so they’ve had to turn their focus to credit options to get by. They’re using Self as a method to provide structure and a plan to build credit during a time when credit is most needed. Despite the new stressors and financial setbacks, in a recent survey, 60 percent of Self customers reported they are still saving money for emergencies each month, and more than 80 percent of customers reported they are interested in using the money they receive from their Credit Builder Account for savings. With support from Self, their customers are upholding their commitments to themselves and continue to work on their financial health.

A financial tool like Self gives people who have fallen on tough times the ability to overcome their past financial difficulties and invest in their long-term goals. Sharita’s journey to rebuild her credit and educate herself about financial health has even inspired her to devote her career to helping others do the same. She became a Certified Financial Education Instructor and started working with Self so that others can get help rebuilding their credit as she did. “Now, I help people to change their financial trajectory,” she says. <a href="https://www.youtube.com/watch?v=ZyNP4b9y4UU">Watch her inspiring story here</a>.

<a href="https://www.youtube.com/watch?v=ZyNP4b9y4UU" target="_blank" rel="noopener noreferrer"><img class="aligncenter size-full wp-image-23105" src="https://content.accion.org/wp-content/uploads/2021/01/from-homeless-to-financia-educator-with-self.png" alt="From Homeless to Financial Educator With Self" width="568" height="323" /></a>

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