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Debdoot Banerjee

Elizabeth Winters

When Sadashiva had to close his food stall business during the pandemic, a digital loan provided relief

Article

Twenty years ago, Sadashiva Das started cooking and selling panipuri, a popular street food made of fried flatbread and flavorful fillings. It took several years for him to build his reputation in the bustling market area of Khurda, located in the Odisha province of eastern India. As his panipuri business took off, Sadashiva was able to feed and provide for his family. The income he earned from his business also allowed him to send his son and daughter to college.

Like other street vendors across India, Sadashiva had to close his panipuri business — the only source of income for his family — when the COVID-19 pandemic began. Because coronavirus is highly contagious, he was unsure when he would be able to restart his business, if at all. Without the income from his food stall, the lack of cash became a major problem for him, and he recalled that he nearly slipped into a depression. He didn’t have enough savings to last for another few months, so he picked up a job as a daily wage worker to make ends meet.

After six very challenging months, Sadashiva learned that he could apply online for a loan to give his business some relief during this crisis. Although the online registration process is fairly easy, Sadashiva struggled because he doesn’t have much experience using technology. As a client of <a href="https://annapurnafinance.in/" target="_blank" rel="noopener noreferrer">Annapurna Finance Ltd.</a>, a microfinance institution and Accion partner in India, he received support through the loan process and Annapurna’s staff walked him through the online registration process.

Annapurna recognizes that technology can help their team to reach more clients, provide better customer support, improve the efficiency of their operations, and launch digital products that help microentrepreneurs stay in business. The pandemic has accelerated their focus on digitization. But many of their clients — especially those living in rural areas — need extra support to learn how to use digital tools. To build digital products that work for Annapurna’s clients, we surveyed Annapurna’s small business owner customers to understand <a href="https://www.accion.org/critical-lessons-from-a-survey-of-small-businesses-in-india" target="_blank" rel="noopener noreferrer">their experience and confidence using technology, how gender gaps affect digital access, the role of misinformation, and more</a>. Through <a href="https://www.accion.org/mastercard-and-accions-partnership-to-unlock-millions-of-underserved-microbusinesses" target="_blank" rel="noopener noreferrer">Mastercard and Accion’s partnership</a>, we're working with Annapurna to develop new digital loan products for the micro, small, and medium enterprises they serve.

One month after he applied for the street vendor loan, Sadashiva received the disbursement he needed to restart his business. He reopened his panipuri stall while following the government’s pandemic safety measures, and his sales slowly returned. But while vaccines have rolled out and infections have dropped in countries like the United States, India is still facing devastating COVID-19 outbreaks. Skyrocketing cases have overloaded India’s health system and new lockdowns have left small business owners out of work again. Digital financial tools can help small business owners to weather this crisis, find a way to reopen their businesses safely, and help us to <a href="https://www.accion.org/growing-disparities-threaten-an-inclusive-recovery" target="_blank" rel="noopener noreferrer">create a more inclusive recovery for all</a>.

A digital loan helps a street vendor get back on his feet

Watch Accion CEO Michael Schlein in a video from Mastercard and Harvard Business Review Analytic Services’s 2021 Become Index

Video

<span style="font-weight: 400;">The pandemic is far from over in developing countries, and families and small businesses are struggling to recover. Tech can connect people to insurance, credit, loans, mobile banking, and other financial services so they can weather this crisis and recover. Accion CEO Michael Schlein shares how tech can help people  stay resilient in Mastercard and Harvard Business Review Analytic Services’s Become 2021 </span><a href="https://www.becomeindex.com/en#/" target="_blank" rel="noopener noreferrer"><span style="font-weight: 400;">Business Innovators Index</span></a><span style="font-weight: 400;">.</span>

[embed]https://vimeo.com/555363037[/embed]

Tech gives people tools for a resilient future

En español

<ul>
<li>La falta de oportunidades económicas es una de las causas fundamentales de la migración masiva desde el Triángulo Norte.</li>
<li>Accion responde a este llamado de la Casa Blanca con un compromiso renovado para ayudar a hacer crecer las micro y pequeñas empresas en la región del Triángulo Norte durante los próximos tres años, lo que en definitiva beneficiará a más de 400.000 personas.</li>
<li>Acción es un líder mundial en microfinanzas e inversiones de impacto en tecnologías financieras, con 60 años de experiencia en la promoción del desarrollo económico en todo el mundo.</li>
<li>Este apoyo es fundamental para que los empresarios y sus familias sobrepasen a la pandemia, comiencen la reconstrucción y desarrollen su resiliencia financiera para el futuro.</li>
</ul>
<p><em>Washington, DC, 27 de mayo de 2021</em> — Accion anunció hoy un nuevo compromiso para apoyar a las familias y las pequeñas empresas en los países del Triángulo Norte (Guatemala, Honduras y El Salvador) y ayudar a abordar las causas fundamentales de la migración. Durante los próximos tres años, Accion, líder mundial en microfinanzas e inversiones fintech de impacto, brindará servicios de asesoramiento, orientación y consultoría a las instituciones financieras que están ayudando a los propietarios de micro y pequeñas empresas en la región, lo que finalmente redundará en beneficio de más de 400.000 personas. Accion asume este compromiso como socio fundador del reciente llamado de acción de la vicepresidenta Kamala Harris para apoyar el desarrollo económico en la región.</p>
<p>La inclusión digital y financiera es un área medular del enfoque de la Casa Blanca para abordar la migración masiva, impulsada por una serie de factores que incluyen la falta de oportunidades económicas, la pobreza, la violencia y el cambio climático, todos agravados por la pandemia de COVID-19 &#8211; en el Triángulo del Norte. Casi la mitad de todos los residentes de la región ganan menos de 5,50 dólares al día y más de 300.000 puestos de trabajo han desaparecido debido a la pandemia. El compromiso de Accion creará oportunidades económicas en la región al proporcionar a las poblaciones vulnerables que tienen más probabilidades de emigrar, las herramientas financieras digitales que necesitan para expandir sus granjas, hacer crecer sus negocios, aumentar sus ingresos y construir mejores vidas en sus países de origen.</p>
<p>“El Llamado a la Acción es reunir a estos líderes y a otros para que podamos hacer lo que creo que podemos hacer mejor, que es comprometernos a hacer algo y luego llevarlo a cabo, entendiendo que dar esperanza no se trata solo de tener un sueño de dar esperanza, se trata de una acción que resulte en un beneficio tangible que le dé a la gente una idea de lo que es posible para ellos mismos y para sus familias,” dijo la vicepresidenta Kamala Harris en un evento en la Casa Blanca el jueves.</p>
<p>Accion trabajará con instituciones financieras de la región que prestan servicios a micro y pequeñas empresas de bajos ingresos para ayudarlas a digitalizar sus servicios y a mejorar su capacidad de satisfacer las necesidades de sus clientes. El trabajo de Accion se centrará en ampliar la participación de los grupos vulnerables en la economía digital; facilitar el acceso a las tecnologías financieras y al capital para las pequeñas empresas, en particular aquellas que son propiedad de mujeres e indígenas; y garantizar que las personas más vulnerables y con más probabilidades de migrar tengan acceso a educación y servicios financieros.</p>
<p>Michael Schlein, presidente y director ejecutivo de Accion, dijo: “América Latina es una de las regiones más afectadas por la pandemia, lo que ha contribuido a agravar una serie de factores como la pobreza y la violencia que están impulsando la migración masiva del Triángulo Norte hacia los Estados Unidos. Con el apoyo adecuado y las nuevas tecnologías, las instituciones financieras que ya atienden a las personas con más probabilidades de emigrar pueden digitalizar sus operaciones para así llegar a clientes financieramente marginados, comprender sus necesidades y crear nuevas herramientas que permitan a las personas la construcción de una vida mejor y, de esta manera, abordar las causas económicas de la migración &#8220;.</p>
<p>Durante los próximos tres años, Accion trabajará a través de sus asociaciones existentes en la región para:</p>
<ul>
<li>Conectar a los propietarios de pequeñas y microempresas con nuevos mercados y hacer crecer sus negocios mejorando sus capacidades financieras, digitales y de gestión;</li>
<li>Trabajar para reducir las barreras que han impedido a las mujeres el acceso a oportunidades económicas;</li>
<li>Mejorar la seguridad física de las pequeñas empresas apoyando su transición de pagos en efectivo a pagos digitales;</li>
<li>Brindar a las personas un mayor acceso a los servicios financieros en los lugares donde viven, a través de la expansión de la banca sin sucursales;</li>
<li>Impulsar la productividad de los pequeños agricultores proporcionándoles nuevos productos y servicios;</li>
<li>Facilitar que los prestamistas que ya atienden a los pobres hagan un mayor uso de la tecnología para llegar a más clientes y brindarles apoyo de manera más eficaz y con mayor seguridad.</li>
</ul>
<p>A lo largo de su historia, Accion ha trabajado con más de 45 instituciones de microfinanzas, fintechs y otros proveedores de servicios financieros en América Latina para ayudarlos a desarrollar y brindar servicios financieros asequibles y de alta calidad a poblaciones desatendidas.</p>
<p>Los socios de Accion en la región incluyen a Fundación Génesis Empresarial y a Compartamos SA (Compartamos Guatemala), ambas organizaciones microfinancieras que atienden a pequeñas empresas en Guatemala; Banco Popular SA y Financiera Solidaria SA (Finsol), ambas instituciones comerciales de microfinanzas en Honduras; y SAC Integral SA, una institución microfinanciera que ofrece a las pequeñas empresas de El Salvador productos y servicios financieros innovadores.</p>
<p style="text-align: center;"># # #</p>
<h2><strong>Acerca de Acción</strong></h2>
<p>Acción es una organización mundial sin fines de lucro comprometida con la creación de un mundo financieramente inclusivo, con un legado pionero en microfinanzas e inversiones de tecnología financiera con impacto social. Impulsamos a proveedores de servicios financieros para que ofrezcan soluciones asequibles y de alta calidad a escala de los 3.000 millones de personas excluidas o desatendidas por el sector financiero. Durante 60 años, Acción ha ayudado a decenas de millones de personas mediante su trabajo con más de 160 socios en 55 países. Más información en <a href="http://www.accion.org" target="_blank" rel="noopener">http://www.accion.org</a>.</p>
<p>&nbsp;</p>


Press Release

<ul>
 	<li>Lack of economic opportunity is among the root causes of mass migration from the Northern Triangle.</li>
 	<li>Accion is responding to a White House call to action with a new commitment to help grow micro and small businesses in the Northern Triangle region over the next three years, ultimately benefitting more than 400,000 people.</li>
 	<li>Accion is a global leader in microfinance and fintech impact investing with 60 years of experience advancing economic development around the world.</li>
 	<li>This support is critical for entrepreneurs and their families to survive the pandemic, begin to rebuild, and establish their financial resilience for the future.</li>
</ul>
<em>Washington, DC, May 27, 2021</em> – Accion announced today a new commitment to support families and small businesses in the Northern Triangle countries – Guatemala, Honduras, and El Salvador – and help address the root causes of migration. Over the next three years, Accion, a global leader in microfinance and fintech impact investing, will provide advice, guidance and consulting services to the financial institutions that are helping micro and small business owners in the region – ultimately benefitting more than 400,000 people. In making this commitment, Accion is a founding partner in Vice President Kamala Harris’ recent call to action to support economic development in the region.

Digital and financial inclusion is a key focus area in the White House’s approach to addressing the mass migration that is being driven by a series of factors including lack of economic opportunity, poverty, violence, and climate change – all compounded by the COVID-19 pandemic – in the Northern Triangle. Nearly half of all residents in the region earn less than US $5.50 per day, and more than 300,000 jobs have been lost due to the pandemic. Accion’s commitment will create economic opportunity in the region by providing vulnerable populations who are most likely to emigrate with the digital financial tools they need to expand their farms, grow their businesses, increase their incomes, and build better lives in their home countries.

“The Call to Action is to bring these leaders and others together so that we can do what I think we can do best, which is make a commitment to get something done and then see it through, understanding that giving hope is not about just having a dream of giving hope, it is about action that results in tangible benefit that gives people a sense of what is possible for themselves and for their families,” said Vice President Kamala Harris at a White House event on Thursday.

Accion will work with financial institutions in the region who serve low-income micro and small businesses to support them in digitizing their services and improving their ability to address their clients’ needs. Accion’s work will focus on expanding vulnerable groups’ participation in the digital economy; facilitating access to financial technologies and capital for small businesses, particularly women- and indigenous-owned businesses; and ensuring that the most vulnerable and the most likely to migrate have access to financial services and education.

Michael Schlein, President and CEO of Accion, said: “Latin America is one of the regions hardest hit by the pandemic, contributing to a series of factors including poverty and violence that is driving mass migration from the Northern Triangle to the United States. With the right support and new technology, financial institutions already reaching the people most likely to emigrate can digitize their operations to reach even more financially underserved clients, understand their needs, and create new tools that allow people to build better lives – ultimately addressing the root economic causes of migration.”

Over the next three years, Accion will work through its existing partnerships in the region to:
<ul>
 	<li>Connect small and micro business owners to new markets and grow their businesses by improving their management, financial, and digital capabilities;</li>
 	<li>Work to reduce barriers that have prevented women from accessing economic opportunities;</li>
 	<li>Improve physical security for small businesses by supporting their transition from cash to digital payments;</li>
 	<li>Give people greater access to financial services where they live through the expansion of branchless banking;</li>
 	<li>Boost the productivity of small-holder farmers by providing them with new products and services;</li>
 	<li>Enable lenders that already serve the poor to make greater use of technology to reach more clients and support them more effectively and with greater security.</li>
</ul>
Over its history, Accion has worked with more than 45 microfinance institutions, fintechs, and other financial service providers in Latin America to help them develop and deliver affordable, high-quality financial services to underserved populations.

Accion’s partners in the region include Fundación Génesis Empresarial and Compartamos S.A. (Compartamos Guatemala), both microfinance organizations serving small businesses in Guatemala; Banco Popular S.A. and Financiera Solidaria S.A. (Finsol), both commercial microfinance institutions in Honduras; and SAC Integral S.A., a microfinance institution which provides small businesses in El Salvador with innovative financial products and services.
<p style="text-align: center;"><strong># # #</strong></p>

<h2><strong>About Accion</strong></h2>
Accion is a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. We catalyze financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of — or poorly served by — the financial sector. For 60 years, Accion has helped tens of millions of people through our work with more than 160 partners in 55 countries. More at <a href="http://www.accion.org" target="_blank" rel="noopener noreferrer">http://www.accion.org</a>.

Accion Joins White House Call to Action to Support Economic Opportunity in the Northern Triangle

Priya Punatar

Combatting the digital divide on multiple fronts is crucial to scaling financial inclusion

<em>This article is the first of a six-part series on scaling financial inclusion to accompany our <a href="/the-digital-transformation-guide-six-strategies-to-scale-financial-inclusion">digital transformation guide</a>.</em>

During India’s first strict COVID-19 lockdown, <a href="/women-entrepreneurs-get-back-to-business-in-india">Papina Das, a dairy business owner in Odisha</a>, faced plummeting sales and an unstable income when people in her village avoided visiting the local market and stopped buying her cows’ milk. In the face of unpredictable challenges, digital financial tools can help micro, small, and medium enterprises (MSMEs) owners like Papina build resilience by giving them access to credit, payments, insurance, and business management advice. However, low-income individuals and small business owners don’t always have the digital skills, attitudes, and behaviors they need to use such tools. While some people are comfortable using technology in their daily lives, many lack access to smartphones or stable internet connections, and others simply do not trust or feel comfortable using unfamiliar digital financial services. With customers spanning many different levels of digital awareness, how do financial service providers effectively bridge the <a href="https://stats.oecd.org/glossary/detail.asp?ID=4719" target="_blank" rel="noopener noreferrer">digital divide</a> to support their clients and reach the most vulnerable?

<a href="/institutional_partnerships/mastercard-center-for-inclusive-growth" target="_blank" rel="noopener noreferrer">In partnership with the Mastercard Center for Inclusive Growth</a>, Accion recently published a guide to help financial providers (FSPs) navigate the complexities of <a href="https://www.accion.org/the-digital-transformation-guide-six-strategies-to-scale-financial-inclusion">digital transformation</a>. We uncovered three key strategies to combat the digital divide that prevents FSPs from reaching clients in need of financial services.
<h3>1. Communicate how digital products help customers improve their businesses</h3>
<blockquote class="pullquote--right">“Our digital transformation goes hand-in-hand with our clients’ digital transformation.” - Verónica Gavilanes, General Manager, Microfinance, Banco Pichincha in Ecuador</blockquote>
For small business customers accustomed to using cash, the value proposition of switching to digital payments can be difficult to understand — particularly when customers perceive cash to be free and more secure. Communicating the benefits of digital products by using clear messages that resonate with small merchants can help them overcome their initial hesitation.

<a href="/helping-small-businesses-build-resilience-in-ecuador" target="_blank" rel="noopener noreferrer">Banco Pichincha</a> is the largest financial institution in Ecuador. As the bank undergoes a complete, large-scale digital transformation, they recently launched <a href="https://www.pichincha.com/portal/canales-de-atencion/deuna" target="_blank" rel="noopener noreferrer">Billetera deUna!</a>, a mobile wallet that supports secure, real-time payments for their customers. While the application has been downloaded more than 118,000 times, this is concentrated among high-income segments, with much lower uptake at the base of the pyramid.

<a href="https://datatopics.worldbank.org/g20fidata/country/ecuador" target="_blank" rel="noopener noreferrer">Nearly eight in 10 Ecuadorians have mobile phones</a>, but only <a href="https://globalfindex.worldbank.org/sites/globalfindex/files/countrybook/Ecuador.pdf" target="_blank" rel="noopener noreferrer">32 percent of those with phones are currently using them to make digital payments</a>. Cash still accounts for about <a href="https://blogs.worldbank.org/jobs/why-digital-payments-are-key-entrepreneurs-success" target="_blank" rel="noopener noreferrer">40 percent of payments</a>, with cash being particularly prevalent in rural communities. Using insights into their customers’ adoption barriers, Banco Pichincha has redesigned the user experience for underserved microbusinesses with a clear and compelling value proposition. In parallel, the bank is using Accion’s edtech platform, <a href="/clients/ovante" target="_blank" rel="noopener noreferrer">Ovante</a>, to help their microfinance customers gain the digital literacy and skills they need to use the platform.
<h3>2. Design for both sides of the digital divide</h3>
FSPs that serve low-income people and businesses face the challenging reality that some of their customers do not yet have access to digital devices and will continue to depend on high-touch services offered through the traditional microfinance model. At the same time, they have client segments that prefer the accessibility, convenience, and speed that digital financial services can provide.

<img class="aligncenter size-full wp-image-24060" src="https://content.accion.org/wp-content/uploads/2021/04/Accion-MAP-report-graphics-WEB_3-Digital-divide.png" alt="The digital divide" width="2000" height="1000" />

India’s <a href="/expanding-the-benefits-of-a-growing-digital-economy-in-indonesia-and-india" target="_blank" rel="noopener noreferrer">Annapurna Finance Limited</a> serves 1.9 million group lending customers who would otherwise lack access to high-quality, affordable financial services. When pandemic-induced lockdowns effectively ended group meetings, members found themselves without much-needed finance at a time when economic vulnerability skyrocketed.

While only 10 percent of Annapurna’s group lending customers currently own a smartphone, a greater percentage has access to less advanced feature phones. To address the digital divide, Accion worked with Annapurna to create an SMS-based, digitally accessible emergency loan product that incorporates both tech and touch. For example, interested customers can provide details directly to their loan officer for their application and receive an emergency loan limit if qualified. Once deployed, a customer can access the funds at any time without interacting with a person by sending a simple SMS to a dedicated phone number, which then disburses the money to the customer’s loan account.

We designed the solution to easily upgrade to a smartphone version so that customers can grow with the platform as they gain digital skills. For the more digitally savvy segment of Annapurna’s MSME clients, we are supporting the bank in developing an end-to-end digital loan that allows clients to apply without needing to speak directly to a loan officer and make all repayments remotely.
<h3>3. Balance tech and touch strategies</h3>
Human interaction continues to be critical in delivering financial services to the poor as personal interactions <a href="/the-tech-touch-balance" target="_blank" rel="noopener noreferrer">build trust, establish relationships, and engage customers</a>. For customers with low digital maturity, FSPs should think strategically about hybrid models that leverage digital to automate manual processes while still maintaining the human touch that customers value.
<blockquote class="pullquote--right">“Our approach is to first understand our customers, understand the segment that we want to serve, understand how digitally mature they are, and then reach out to them [in a way that is uniquely suited to the circumstances].” - Taiwo Joda, Managing Director and CEO, Accion Microfinance Bank in Nigeria</blockquote>
<a href="https://www.accionmfb.com/" target="_blank" rel="noopener noreferrer">Accion Microfinance Bank</a> (Accion MfB), one of Nigeria’s most successful microfinance institutions, aims to make digital their new norm and encourages digital behaviors in their client base. As part of this goal, they made the end-to-end application process for their new digital loan accessible only through a mobile app or web portal. But Accion MfB knew that not all their customers are ready for a fully digital process, so they designed the product to allow customers to initiate the digital loan application process through several different channels. Using USSD mobile codes, customers can submit a request for digital assistance, which prompts the call center to reach out to the client and understand their characteristics and comfort level with digital applications. The call center agent may then direct applicants to one of the self-service channels to complete an application online or may refer applicants to a branch where a staff member can assist with a loan application.

Finally, after noticing discrepancies between customers who were initially denied online but later approved after visiting a physical branch, Accion MfB also made several changes to the digital loan application to more closely resemble how an account officer would ask questions. They also integrated more customer support, examples, and tips.

To bring useful financial tools to underserved MSMEs in a way that promotes trust and comfort, financial providers need to tailor their digital approach to their customers’ varying levels of digital skill and access. FSPs should be deliberate and thoughtful about how they reach clients on both sides of the digital divide: leaning into digital channels, while continuing to leverage physical networks like branches, loan officers, and groups. Meeting clients where they are will promote greater digital adoption and <a href="/the-digital-transformation-guide-six-strategies-to-scale-financial-inclusion" target="_blank" rel="noopener noreferrer">ultimately fuels the digital transformation of low-income individuals and small businesses.</a>

<em>Malavika Krishnan contributed to this article. </em>

Three ways to bridge disparities and close digital gaps for MSMEs

Laura Glenny

How to get started building the culture of innovation needed for digital transformation success

In 1889, George Eastman wanted to make photography accessible to everyone, which inspired him to invent rolled film and the first user-friendly camera called Kodak. He started the Eastman Kodak Company and created a culture that mirrored his own drive for creativity and innovation. In the early years, this emphasis on innovation led to risky ventures like investing in color film. Decades later, in 1977, an engineer came to the Kodak leadership team with another innovative idea — the digital camera. But the Kodak leadership team could not imagine a future where consumers preferred the immediate gratification of seeing a photo on a screen over having photos developed on paper and decided not to invest in the technology. As we now know, that was a mistake and digital cameras eventually took over the photography industry. While Kodak tried to reverse course by <a href="https://hbr.org/2002/05/disruptive-change-when-trying-harder-is-part-of-the-problem" target="_blank" rel="noopener noreferrer">spending billions in technology</a>, it never recovered its culture of innovation. As a result, Kodak filed for bankruptcy in 2012 and became a cautionary tale: it is not technology that makes an organization successful; <em>it is the ability of the organization to continuously transform itself</em>.

For over six decades, Accion has supported numerous financial service providers as they’ve transformed their organizations so that they can better meet the needs of the financially vulnerable people and businesses they serve. For organizations focused on improving the lives of low-income populations, adopting technology to digitally transform their business and services can feel risky. These digital transformations are complex and require investments in resources and time, a vision for the future, and behavior change.

To help organizations pinpoint the key areas of focus for driving successful and continuous transformation, Accion created an <a href="https://dtsurvey.accion.org/people-culture" target="_blank" rel="noopener noreferrer">assessment tool for financial service providers to evaluate their people and culture capabilities</a>. The diagnostic determines how prepared institutions are to undertake a digital transformation. It also offers practical steps for creating the work environment needed to succeed in a digital-first business landscape. The assessment focuses on the four areas that are crucial for any transformation:
<ul>
 	<li><strong>Values and culture.</strong> When there is a culture of trust, employees work collaboratively, keep each other accountable, focus on the customer, and take ownership of their work — all essential ingredients for a successful digital transformation. In this diagnostic, we evaluate the behaviors that support continuous learning, the value of openness, and experiential learning. We assess how employees’ actions align with their organization’s values and how the current environment supports innovation.</li>
 	<li><strong>Organizational design.</strong> An institution’s organization can determine its business model’s flexibility and if there is space to learn and grow. This diagnostic will assess how decisions are made within the organization and whether existing structures and teams are creating roadblocks or positioning the organization to pivot quickly.</li>
 	<li><strong>Talent.</strong> An organization’s workforce must have the right skill sets, behaviors, and mindsets to drive its evolution to the desired state. This diagnostic assesses how your organization is currently utilizing talent, cultivating an agile mindset, and providing opportunities for continuous learning and experimentation.</li>
 	<li><strong>Leadership.</strong> Leaders create the vision and set the tone for digital transformation within an organization. Good leadership should analyze data and take calculated risks, reward creativity in the face of an ever-changing market, and most importantly, obsess over the customer experience. In this diagnostic, we offer key recommendations for how your leadership can ensure the organization thrives through its digital transformation.</li>
</ul>
As Kodak’s leadership team learned, technology is solely an enabler for an adaptable business. The real keys to building a culture of innovation that will sustain disruption and constant change are an organization’s <em>people and culture</em>. To digitally transform, an organization must codify innovation into its DNA. For mission-driven organizations, a focused approach to creating an innovative culture is particularly crucial not only to create a sustainable business model, but also to ensure the businesses and people served are able to evolve and thrive through this digital era.

Take our <a href="https://dtsurvey.accion.org/people-culture" target="_blank" rel="noopener noreferrer">people and culture assessment</a>, also <a href="https://dtsurvey.accion.org/gente-cultura" target="_blank" rel="noopener noreferrer">available in Spanish</a>, to see where your organization is on its journey toward a culture of innovation.

<em>This assessment was developed as part of an <a href="https://www.accion.org/mastercard-and-accion-partnering-for-inclusive-growth" target="_blank" rel="noopener noreferrer">ambitious program with the Mastercard Center for Inclusive Growth</a> to help millions of underserved microbusinesses successfully operate in — and benefit from — the digital economy.</em>

Create the culture of innovation needed for digital transformation

Federico  Gomez Romero

Companies in Brazil are facing a tech hiring crunch as competition and demand for talent rises

Among the many different impacts of the COVID-19 crisis, there has been an undeniable spike in the amount of digital transformation occurring across almost every industry as organizations adapt their businesses to a more digital world. In one year, companies of all regions and sizes have accelerated the digitalization of their internal operations and customer interactions to levels they expected to reach in three or four years. The <a href="https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever" target="_blank" rel="noopener noreferrer">share of digitally enabled products offered in their portfolios has also accelerated by up to seven years</a>. The speed with which companies reacted to COVID-19-related changes is even more impressive as many businesses moved to adapt to these changes 20 times more quickly than they had thought possible before the pandemic. The backbone responsible for these astonishing transformations is the same worldwide: the companies’ tech teams.
<h2>Hiring tech talent has never been easy, and it’s about to get harder</h2>
From full-stack developers to data scientists to security specialists, recruiting high-quality tech teams has always been a major challenge for organizations. Qualified candidates can be difficult to find, expensive to hire, and accustomed to working remotely, creating a perfect combination for a competitive hiring environment among employers. And now, the race to recruit tech workers is only get fiercer.

Despite the increase in global unemployment in the last year — <a href="https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/briefingnote/wcms_767028.pdf" target="_blank" rel="noopener noreferrer">nine percent of working hours were lost compared to 2019, equaling more than 250 million jobs</a> — the demand for digital skills continues to grow. The total number of technology-oriented jobs may increase <a href="https://news.microsoft.com/apac/2020/12/15/re-envisioning-the-workforce-skilling-today-to-thrive-tomorrow/" target="_blank" rel="noopener noreferrer">nearly five-fold by 2025, rising from 41 million in 2020 to 190 million in 2025</a>.

Under these circumstances, emerging markets will face an even bigger hiring challenge, as they must compete with tech giants like the US and Europe for scarce talent. Geographical boundaries continue to be torn down as remote work allows big tech companies to hire foreign talent. Unable to match their capacity to pay high salaries, companies in regions like Latin America — especially small and medium-sized companies — will need to find creative ways to source and retain IT workers.
<h2>Brazil is in the middle of a perfect storm</h2>
On top of the acceleration of digital transformation and the global competition for tech talent, Brazil has another problem as the local startup scene gains momentum. Though this is a positive trend, it is a challenge that threatens to make the gap between supply and demand for talent even larger. The local startup ecosystem has been growing at impressive rates in recent years, and the funding from venture capital firms to local tech startups has reached all-time highs. <a href="https://www.forbes.com/sites/angelicamarideoliveira/2021/04/03/brazil-tech-round-up-unicorn-hotmart-closes-new-round-vc-activity-in-brazil-digital-government-online-stalking/?sh=c0f5b113df4c" target="_blank" rel="noopener noreferrer">In Q1 2021 alone, almost $2 billion was invested into the sector</a>, more than half of what was invested during all of 2020. For small startups trying to source IT workers, this means that they must fight their way through international players, large corporations, and well-funded local tech companies.

This sudden increase in demand didn’t take long to shake the market. <a href="https://blog.revelo.com.br/salarios-da-area-de-tecnologia/" target="_blank" rel="noopener noreferrer">In 2020, the average salaries for the IT sector went up around 30 percent</a>, with developers being the most sought-after workers, accounting for almost 70 percent of the open positions. With <a href="https://cio.com.br/carreira/qual-e-o-perfil-dos-desenvolvedores-no-brasil-e-quanto-ganham-em-media/" target="_blank" rel="noopener noreferrer">more than 75 percent of companies looking for senior and semi-senior developers</a>, two big questions arise: How does the country attract more Brazilians to become junior developers? How can they quickly enable those workers to become senior developers? The answers won’t come from traditional education models. It is expected that an additional 420,000 IT professionals will be needed by 2024. However, <a href="https://economia.uol.com.br/reportagens-especiais/mercado-de-trabalho-busca-desenvolvedores-ti/#page5" target="_blank" rel="noopener noreferrer">the current education system is only graduating 46,000 students per year</a>.
<h2>Seeking creative solutions for hiring</h2>
Tech companies have different approaches to hiring talent: they leverage head-hunters, rely on in-house scouting teams, reach out to their networks, and partner with entrepreneurship hubs. No matter how many strategies these companies may have to recruit new employees, their efforts will be useless unless more developers are trained every year. With a traditional education sector that has not been able yet to evolve and meet the needs of the market, new models have appeared to try to solve the shortage of tech talent. From online course platforms like Udemy or Codeacademy to coding academies like Digital House to intense coding bootcamps like Brazilian Trybe or <a href="/a-fintech-cultivates-tech-talent-in-latin-america" target="_blank" rel="noopener noreferrer">Accion Venture Lab’s portfolio company Henry</a>, many startups are working towards the same goal: training better developers in a more efficient way.

As employers realize that some of these emerging models are not only providing fast education but also equipping their graduates with the latest tech tools, improving their much-needed soft skills, and putting them to the test under a true work environment, we might see the talent gap start to close while digital transformation continues to move full steam ahead. Ultimately, these solutions will help more people find employment while helping more businesses succeed in a more digital world.
<h2>Join us for our next webinar</h2>
This blog is part of a <a href="/now-is-the-time-for-fintech-entrepreneurs-in-brazil" target="_blank" rel="noopener noreferrer">series of articles</a> and webinars Accion Venture Lab has launched with the support of FedEx to help Brazilian SMEs overcome some of the challenges they are facing during the COVID-19 crisis. In our upcoming webinar on July 14, startups will share how they source and retain the best tech talent in Brazil and discuss with other players in the industry how they are helping to solve the need for developers with innovative education models.

Hiring tech talent is becoming an odyssey in Brazil

Maria Camila Gomez Silva

Español

<p>Paula Coxaj Acabal nació en Momostenango, una población rural en el altiplano occidental de Guatemala donde la mayoría de la gente vive de la agricultura. Se casó y se mudó a La Gomera, una población más cercana a la costa del Pacífico. Cuando el marido de Paula, siendo aún joven, falleció ella se puso a buscar trabajo desesperadamente para mantener a sus hijos. “Yo era una madre soltera, una mujer viuda de 35 años con 7 hijos. Estaba sola, sin saber leer y con un gran compromiso de sacar adelante a mis hijos&#8221;.  Motivada por su familia y con pocas opciones para ganarse la vida, decidió abrir su propio negocio.</p>
<p>“Yo empecé vendiendo verduras, cargaba el producto en un costal, tenía miedo de ir a un banco por falta de confianza, no me atrevía, pero supe de Génesis y fui a pedir mi primer préstamo de mil quetzales. Así empecé a trabajar hace 30 años: me di cuenta de que podía salir adelante con el crédito y crecer en mi negocio y pronto me dieron un segundo crédito de 2 mil quetzales”, nos dice Paula sobre su experiencia como emprendedora.</p>
<p>Gracias a años de arduo trabajo y a la capacitación recibida de la Fundación Génesis Empresarial, que la ayudó a aprender cómo administrar su negocio y su crédito, Paula convirtió su primer negocio informal de productos agrícolas en un pequeño imperio de tiendas en su comunidad. &#8220;Agradezco a Dios porque me permitió tener el apoyo de Génesis para comprar mi primer local”, dice Paula al pensar en los 40.000 quetzales de préstamo que le permitieron adquirir su propia tienda física. <a href="https://www.genesisempresarial.org/" target="_blank" rel="noopener">La Fundación Génesis Empresarial</a>, socia de Acción desde hace mucho tiempo, es una organización microfinanciera que atiende a pequeñas empresas en Guatemala.</p>
<p>Los negocios de Paula le han permitido brindar una vida mejor a sus hijos, enviarlos a la escuela y darles trabajo para que a su vez puedan mantener a sus propios hijos. Treinta años después de ese primer préstamo, ha logrado superar todos los desafíos y seguir haciendo crecer sus negocios, incluso expandiéndose hacia la venta de otros productos como ropa. Ahora es propietaria de nueve locales, que dan trabajo a decenas de personas en su comunidad, incluyendo a sus hijos. Hasta el presente continúa trabajando con el apoyo de la Fundación Génesis Empresarial y considera al equipo de Génesis como parte de su familia.</p>
<h2><strong>Una enfermera brinda atención médica a su comunidad marginada</strong></h2>
<div id="attachment_24398" style="width: 345px" class="wp-caption alignright"><img aria-describedby="caption-attachment-24398" class="wp-image-24398" src="https://content.accion.org/wp-content/uploads/2021/06/Cliente-2.jpg" alt="Jovita stands in the health center that she opened in her rural community in northern Guatemala" width="335" height="573" /><p id="caption-attachment-24398" class="wp-caption-text"><em>Jovita stands in the health center that she opened in her rural community in northern Guatemala</em></p></div>
<p>En el norte de Guatemala, Jovita Ester Chub Prado vive en una comunidad rural donde la atención médica y los medicamentos son escasos. La mayoría de las personas no tiene acceso a un vehículo para movilizarse hasta el hospital más cercano, que se encuentra lejos de sus hogares. Debido a su experiencia en enfermería, Jovita entendió cómo ayudar a su comunidad a mantenerse saludable.</p>
<p>“Mi sueño comenzó al ver la necesidad de mi comunidad, sin acceso a asistencia médica ni medicinas: yo quería ayudar a mis vecinos, había mucha necesidad en salud y las personas me buscaban para pedir ayuda, por los conocimientos que adquirí cuando trabajé como enfermera profesional en el hospital.&#8221;  nos comenta.</p>
<p>Jovita decidió abrir una farmacia y un centro de salud en su comunidad ubicada cerca de Playa Grande, en El Quiché. Al igual que Paula, recibió un préstamo para pequeñas empresas de la Fundación Génesis Empresarial para adquirir equipos y disponer de un local para llevar a cabo sus actividades. En su farmacia ofrece medicamentos convencionales y remedios naturales, realiza pruebas básicas en su laboratorio y ofrece consultas médicas a sus vecinos en su idioma local, que es el Qʼeqchiʼ. Su negocio no solo le brinda la oportunidad de ganarse la vida en una región carente de oportunidades económicas sino también, como muchas otras pequeñas empresas, de servir a su comunidad. El centro de Jovita satisface una necesidad crítica de sus vecinos, quienes de otra manera no podrían obtener la atención médica que necesitan. En particular durante la pandemia por COVID-19, poder acceder a servicios de salud en la comunidad es invaluable.</p>
<h2><strong>Creando oportunidades económicas en el Triángulo Norte</strong></h2>
<p>Estamos orgullosos de trabajar con proveedores de servicios financieros como la Fundación Génesis Empresarial, que abren oportunidades económicas en Guatemala al apoyar a propietarios de pequeñas empresas como Paula y Jovita. Junto con otras once empresas y organizaciones líderes, nos unimos a la Asociación para Centroamérica de la vicepresidenta de los Estados Unidos, Kamala Harris, para abrir oportunidades económicas en el Triángulo Norte: Guatemala, Honduras y El Salvador. Nos hemos <a href="https://www.accion.org/accion-joins-white-house-call-to-action-to-support-economic-opportunity-in-the-northern-triangle" target="_blank" rel="noopener">comprometido a apoyar el crecimiento de las micro y pequeñas empresas en la región</a> durante los próximos tres años, lo que redundará en beneficio de más de 400.000 personas.</p>
<p>Además de la pobreza y la violencia persistentes que enfrentan muchas personas en el Triángulo Norte, se han perdido más de 300.000 puestos de trabajo en la región debido a la pandemia por COVID-19. Las micro y pequeñas empresas necesitan nuestro apoyo para mantenerse operativas y poder recuperarse, especialmente en <a href="https://www.accion.org/growing-disparities-threaten-an-inclusive-recovery" target="_blank" rel="noopener">regiones del mundo que enfrentan crecientes disparidades</a>. Al trabajar con nuestros socios para incorporar a tiendas de víveres, talleres de costura y pequeños agricultores al ecosistema digital, podemos mejorar aún más la salud financiera y la resiliencia de los pequeños negocios.  Así como Paula ha creado empleos en su ciudad y Jovita ha brindado atención médica a sus vecinos, cuando los empresarios tienen éxito, este éxito se propaga a las familias y comunidades. Abrir oportunidades para que estos empresarios se adapten y crezcan es fundamental para lograr una recuperación inclusiva y un futuro mejor.</p>


How two women grew their businesses and created a positive ripple effect in their communities in Guatemala 

Paula Coxaj Acabal was born in Momostenango, a rural town in the western highlands of Guatemala where most people rely on farming to earn a living. She married and moved to La Gomera, a town closer to the Pacific coast. When Paula’s husband passed away at a young age, she found herself in desperate need of a job to provide for her children. “I was a single mother – a widow at 35 with 7 children. Alone with no help and unable to read, I was determined to give my children a chance at a better life,” she said. Motivated by her family and with few other options to earn a living, she decided her open her own business.

“I started selling vegetables. I loaded the produce in a sack. I was afraid to go to a bank [for a loan] due to my lack of confidence. I didn’t dare,” said Paula about her early days as an entrepreneur. “But I found out about Génesis, and I went to ask for my first loan of 1,000 quetzals. That’s how I started working 30 years ago: I realized that I could get ahead with credit and grow in my business, and soon they gave me a second loan of 2,000 quetzals.”

With years of hard work and training from Fundación Génesis Empresarial to help her learn to manage her business and credit, Paula turned her first informal produce business into a small empire of stores around her community. “I thank God because he allowed me to have the support of Génesis to buy my first store,” says Paula when reflecting on the 40,000 quetzals loan that allowed her to purchase her own brick and mortar store. <a href="https://www.genesisempresarial.org/" target="_blank" rel="noopener noreferrer">Fundación Génesis Empresarial</a>, Accion’s longtime partner, is a microfinance organization serving small businesses in Guatemala.

Paula’s businesses have allowed her to provide a better life for her children, send them to school, and give them jobs so they can support their own children. Thirty years after that first loan, she’s managed to weather every challenge and continue growing her businesses, even expanding into selling other products like clothing. She now owns nine businesses, providing jobs for dozens of people in her community, including her children. To this day, she continues working with the support of Fundación Génesis Empresarial and considers the Génesis team to be part of her family.
<h2><strong>A nurse brings health care to her underserved community</strong></h2>
[caption id="attachment_24398" align="alignright" width="335"]<img class="wp-image-24398" src="https://content.accion.org/wp-content/uploads/2021/06/Cliente-2.jpg" alt="Jovita stands in the health center that she opened in her rural community in northern Guatemala" width="335" height="573" /> <em>Jovita stands in the health center that she opened in her rural community in northern Guatemala</em>[/caption]

In northern Guatemala, Jovita Ester Chub Prado lives in a rural community where health care and medicine are scarce. Most people don’t have access to a car to drive to the nearest hospital, which is far from their homes. With her background in nursing, Jovita saw a way to help her community stay healthy.

“My dream began when I saw the needs of my community, who didn’t have access to medical assistance or medicine. I wanted to help my neighbors. There was a great need for health care, and people came to me for help because of the knowledge I acquired when I worked as a professional nurse in the hospital,” she says.

Jovita decided to open a pharmacy and health care center in her community, located near Playa Grande in El Quiché. Like Paula, she received a small business loan from Fundación Génesis Empresarial to purchase equipment and secure space to open her practice. She stocks her pharmacy with conventional medicines and natural remedies, runs basic health tests in her lab, and offers medical consultations to her neighbors in their local language of Qʼeqchiʼ. Her business gives Jovita a way to earn a living in a region that lacks economic opportunity, but like many other small businesses, it also serves her community. Jovita’s center fills a critical need for her neighbors, who are otherwise unable to get the medical attention they need. Particularly during the COVID-19 pandemic, having accessible health care in the community is invaluable.
<h2><strong>Creating economic opportunities in the Northern Triangle</strong></h2>
We are proud to partner with financial providers like Fundación Génesis Empresarial, who are opening economic opportunities in Guatemala by supporting small business owners like Paula and Jovita. With eleven other leading businesses and organizations, we joined US Vice President Kamala Harris’s Partnership for Central America to open economic opportunity in the Northern Triangle of Guatemala, Honduras, and El Salvador. We’ve <a href="https://www.accion.org/accion-joins-white-house-call-to-action-to-support-economic-opportunity-in-the-northern-triangle" target="_blank" rel="noopener noreferrer">committed to helping grow micro and small businesses in the region</a> over the next three years, ultimately benefitting more than 400,000 people.

On top of the persistent poverty and violence that many people in the Northern Triangle face, more than 300,000 jobs have been lost in the region due to the COVID-19 pandemic. Micro and small businesses need our support to stay open and recover, especially in <a href="https://www.accion.org/growing-disparities-threaten-an-inclusive-recovery" target="_blank" rel="noopener noreferrer">parts of the world facing growing disparities</a>. By working with our partners to bring grocery shops, tailors, and smallholder farmers into the digital ecosystem, we can further improve the financial health and resilience of small businesses. Just as Paula has created jobs in her town and Jovita has brough health care to her neighbors, when entrepreneurs succeed, their success ripples through families and communities. Opening opportunities for these business owners to adapt and grow is essential for an inclusive recovery and a better future.

Two women entrepreneurs carve out economic opportunity in Guatemala

Introduction

From our CEO and Board Chair

<p>Dear Friends,</p>
<p>The COVID-19 pandemic has forever changed our world. Millions have lost their loved ones, their livelihoods, or both. Decades of progress in reducing global poverty and expanding access to financial services have been put at risk. Lockdowns and social distancing have moved entire businesses online, threatening to leave behind those without the right skills and tools. Low-income people and small businesses are struggling to survive, and their road to recovery is more fraught than anyone else’s.</p>
<p>Accion is building an inclusive economic recovery by enabling people to access the financial products and services they need. Underserved people need savings, credit, and insurance, as well as digital skills and tools, to successfully pivot a business and build financial resilience for their families. During the crisis, inclusive financial service providers also have faced their own challenges, with potentially devastating consequences for millions of small businesses that depend on them for funding and growth.</p>
<p>Accion worked to ensure our partners around the world could continue supporting their vulnerable clients. With our partners, we provided entrepreneurs with forbearance and flexibility, so they had time to restart their businesses. We leveraged digital technologies to enable partners to stay in touch with clients and support those most in need. We quickly pivoted our research to understand the impact of the pandemic on small businesses. We also transformed how we work—strengthening our ability to provide all our support to partners and clients remotely.</p>
<blockquote><p>Families and small businesses have inspired us with their resilience and ability to adapt against overwhelming odds.</p></blockquote>
<p>Ultimately, our work has helped clients keep their businesses open, keep providing for their families, and gain the tools and skills they need to rebuild and grow.</p>
<p>As the recovery is picking up in wealthy countries, that’s not the case for low-income people in emerging markets, who are still dealing with extreme challenges. Yet families and small businesses have inspired us with their resilience and ability to adapt against overwhelming odds. With your support, we will continue enabling those most affected by the crisis to rebuild their livelihoods and participate in our increasingly digital economy—laying the groundwork for an inclusive recovery that opens opportunity for all.</p>
<p><img class="alignnone size-full wp-image-24349" src="https://content.accion.org/wp-content/uploads/2021/06/MESDianaSignature.png" alt="" width="117" height="57" /><img class="alignnone size-full wp-image-24350" src="https://content.accion.org/wp-content/uploads/2021/06/Dianasignature.png" alt="" width="129" height="52" /></p>
<p>Michael Schlein and Diana Taylor</p>
<p><img class="alignnone size-medium wp-image-24348" src="https://content.accion.org/wp-content/uploads/2021/06/MESDianapic-300x215.png" alt="" width="300" height="215" /></p>
<p>&nbsp;</p>
<h4>With access to simple financial tools like digital credit, crop insurance, and mobile payments, people around the world can build better futures. Watch the video to see how we connect people and small businesses to the tools they need to thrive.</h4>
<p><iframe src="https://player.vimeo.com/video/489464646" width="640" height="360" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>


Global impact

<p>In 2020, Accion empowered vulnerable people and small businesses to access the financial tools, resources, skills, and knowledge they need to save money, start selling goods online, and recover from significant disruptions to daily life. Financial services like savings accounts, credit, insurance, and digital payments are critical to helping underserved groups build financial resilience and gain a foothold in our rapidly digitizing economy.</p>
<p>Accion supported underserved families and businesses facing unpredictable challenges—as well as the financial service providers striving to empower them—by:</p>
<ul>
<li>Investing in the entrepreneurs and companies that provide inclusive financial services.</li>
<li>Guiding and advising the management teams of these companies and others to ensure their success.</li>
<li>Studying and sharing successes, to export best practices to other companies and countries and overcome barriers to progress.</li>
<li>Conducting rigorous research and advocacy to advance inclusive financial systems for low-income people around the world.</li>
</ul>


Our teams

Our work around the world

The Center for Financial Inclusion

<p>The Center for Financial Inclusion (CFI) works to advance inclusive financial services for the billions of people who currently lack the financial tools needed to improve their lives and prosper. We leverage partnerships to conduct rigorous research and test promising solutions, and then advocate for evidence-based change. CFI was founded by Accion in 2008 as an independent think tank on inclusive finance.</p>
<p>The global pandemic energized CFI’s purpose and its efforts to support an inclusive economic recovery that uplifts the most vulnerable people around the world. In 2020, CFI launched a new strategy that focuses on addressing the most pressing challenges of today and those to come. CFI continues to conduct research and produce evidence-based insights that inform the work of investors, policymakers, donors, and financial service providers as they support vulnerable households and businesses in recovering from the crisis and building the financial resilience they need to grow and thrive.</p>


Client stories

<p>Pallavi is the co-owner of Navya Collections, a garment shop in Warangal, India that focuses on selling saris. Her mother started the store with a small investment, nearly her entire savings, which she used to make 50 to 100 saris. When Pallavi needed a loan to expand the business, other lenders turned her down, but Accion partner Sub-K provided the financial lifeline she needed.</p>
<p><iframe title="vimeo-player" src="https://player.vimeo.com/video/521035888" width="640" height="360" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>


<div id="attachment_24345" style="width: 629px" class="wp-caption alignnone"><img aria-describedby="caption-attachment-24345" class=" wp-image-24345" src="https://content.accion.org/wp-content/uploads/2021/06/Udodirim-300x207.png" alt="" width="619" height="427" srcset="https://content.accion.org/wp-content/uploads/2021/06/Udodirim-300x207.png 300w, https://content.accion.org/wp-content/uploads/2021/06/Udodirim.png 517w" sizes="(max-width: 619px) 100vw, 619px" /><p id="caption-attachment-24345" class="wp-caption-text">Udodirim Agwu | Field Intelligence client | Abuja, Nigeria</p></div>
<p>As hospitals reduced appointments during the pandemic and patients avoided clinics, more people across Sub-Saharan Africa relied on their neighborhood pharmacies for essential medications and basic health services. This includes Euness Pharmacy, owned and operated by Udodirim Agwu in Abuja, Nigeria.</p>
<p>On top of the challenges of running a small business, pharmacists like Udodirim struggle with the complexity of managing a supply chain upended by the pandemic. Field Intelligence, an Accion Venture Lab portfolio company, helps pharmacies in Kenya and Nigeria manage their inventory through their Shelf Life subscription service. Pharmacists order the medicine and products they need through the platform, and Shelf Life delivers it directly to them.</p>
<p>“They save us costs—big ones—because we don’t have to go and pay transport fees to come procure the goods,” says Udodirim. “They bring them right here to the shop. Secondly, they educate us about our drugs that are about to expire…which also gives us ease of doing business,” she added.</p>
<p>Michael Moreland, co-founder and CEO of Field Intelligence, says pharmacies like Udodirim’s are “the front line of the health system in their communities.” He explains, “In these markets where there is such a tremendous shortage of doctors and formal health care services, these local community pharmacies provide an enormous amount of basic primary and essential care to their communities.”</p>
<p>As the pandemic unfolded, supply chains were quickly turned upside down, and prices for routine medicines—especially vitamin C and acetaminophen—went through the roof. Using their data capabilities, Field Intelligence worked to stabilize prices for their pharmacy customers and continued supplying them with critical products that they couldn’t procure on their own.</p>
<p>For Udodirim, the costs, time, and headaches she’s saved thanks to Field Intelligence have made a world of difference for her business. “Shelf Life has been so tremendous,” she says. “It’s been my partner in progress.”</p>


<div id="attachment_24352" style="width: 645px" class="wp-caption alignnone"><img aria-describedby="caption-attachment-24352" class=" wp-image-24352" src="https://content.accion.org/wp-content/uploads/2021/06/USATSI_16003529-300x221.jpg" alt="" width="635" height="468" srcset="https://content.accion.org/wp-content/uploads/2021/06/USATSI_16003529-300x221.jpg 300w, https://content.accion.org/wp-content/uploads/2021/06/USATSI_16003529-768x566.jpg 768w, https://content.accion.org/wp-content/uploads/2021/06/USATSI_16003529-1024x755.jpg 1024w" sizes="(max-width: 635px) 100vw, 635px" /><p id="caption-attachment-24352" class="wp-caption-text">Valonne Smith | Accion Opportunity Fun client | Stockton, California | photo by Clifford Otto, USA Today Network</p></div>
<p>Valonne Smith had long noticed that Black women like herself lack options to take care of their hair without harsh treatments and chemicals. That’s what initially inspired her to open her own salon called Natural Do in Stockton, California.</p>
<p>Valonne applied her previous experience in business management, as well as her sister’s experience as a cosmetologist, to get the business started. “The drive to be an entrepreneur was always in me—it was just about finding the right fit. And when I found it, I took the plunge,” she says.</p>
<p>Valonne’s clients enjoy the upbeat and happy atmosphere in her salon. “And our salon smells good, because we’re not frying hair with chemicals!” she says. “We teach people to love and care for their hair just the way it is, without the breakage from harsh treatments.”</p>
<p>In 2018, a couple years after starting Natural Do, Valonne needed a loan to grow her business and reach more customers, so she applied for working capital through Opportunity Fund, now part of Accion Opportunity Fund. “The process was simple, and I was able to get the working capital right away,” she says.</p>
<p>The pandemic forced Valonne to temporarily shut down her salon for months, threatening the survival of her business. She checked in with her two full-time employees every week, often sending them information on unemployment benefits and grants.</p>
<p>Valonne was very relieved to receive a $5,000 COVID-19 relief grant from Accion Opportunity Fund—the organization formed in 2020 when Accion U.S. Network united with Opportunity Fund. The grant was made possible by the Small Business Live virtual concert and fundraiser benefitting Accion Opportunity Fund in June 2020, featuring performances by superstars Ms. Lauryn Hill, Leon Bridges, Brittany Howard, and more.</p>
<p>Valonne immediately used her new funds to finish paying off her original loan from Opportunity Fund. Now, she has a brighter outlook for the future. As she starts safely reopening, she’s already formulating plans to expand her vision for black women’s hair care into the Bay Area.</p>


Accion Opportunity Fund

<p>U.S. small businesses anchor local economies while creating opportunities for their families, their employees, and their neighborhoods. Yet business owned by people of color, women, and immigrants often struggle to secure capital and resources, as they are systematically shut out from traditional financing.</p>
<p>In the U.S., Accion has worked for more than 25 years to create an inclusive and healthy financial system that supports the nation’s small businesses by connecting entrepreneurs to affordable capital, educational resources, coaching, and networks. We focus on underfunded entrepreneurs who often lack access to the financial services they need to build and grow their businesses. In 2020, Accion’s U.S. Network team joined forces with Opportunity Fund, a community development financial institution based in California, to form Accion Opportunity Fund. This furthered the organizations’ joint missions of scaling mission-based lending and business support services across the United States.</p>


Our impact in 2020

In memoriam

<p><img class="alignnone wp-image-22524" src="https://content.accion.org/wp-content/uploads/2020/10/joe-300x262.jpg" alt="" width="472" height="412" srcset="https://content.accion.org/wp-content/uploads/2020/10/joe-300x262.jpg 300w, https://content.accion.org/wp-content/uploads/2020/10/joe.jpg 322w" sizes="(max-width: 472px) 100vw, 472px" /></p>
<p>In October 2020, Accion’s founder and beloved member of the Accion family Joseph H. Blatchford passed away at the age of 86. Joe was a courageous and charismatic leader who overcame cultural and economic differences to help disadvantaged people around the world.</p>
<p>Joe founded Accion to recruit young Americans to build schools, drainage channels, and other infrastructure projects for low-income communities in Latin America. He wrote, “We believe that the collective initiative of hundreds of such communities can bring progress without bloodshed, and champion the most revolutionary idea of all—the dignity of the individual human being.” Joe’s vision was to provide vulnerable people with the tools they need to help themselves—and while the tools have changed, his vision remains.</p>
<p>The foundation Joe built positioned Accion to become a global leader in expanding financial inclusion to benefit underserved populations around the world. After Accion issued its first loans to small, informal enterprises in Brazil in 1973, Accion’s clients shattered the myth that the poor were bad credit risks. Given access to affordable capital, they could and would improve their lives. From that point on, Accion expanded a network of microfinance programs and partners across the world, and harnessed new technologies to meet the needs of low-income clients. Joe’s pioneering spirit lives in our work, and Accion’s staff continues to find inspiration in his legacy.</p>


<p><img class="alignnone wp-image-24359" src="https://content.accion.org/wp-content/uploads/2021/06/Delegation_Bolivia_BancoSol_2012_16-300x192.jpg" alt="" width="584" height="374" srcset="https://content.accion.org/wp-content/uploads/2021/06/Delegation_Bolivia_BancoSol_2012_16-300x192.jpg 300w, https://content.accion.org/wp-content/uploads/2021/06/Delegation_Bolivia_BancoSol_2012_16-768x491.jpg 768w, https://content.accion.org/wp-content/uploads/2021/06/Delegation_Bolivia_BancoSol_2012_16-1024x654.jpg 1024w, https://content.accion.org/wp-content/uploads/2021/06/Delegation_Bolivia_BancoSol_2012_16.jpg 1230w" sizes="(max-width: 584px) 100vw, 584px" /></p>
<p>In February 2021, Accion lost a dear friend and colleague: Kurt Koenigsfest, CEO of our longtime partner BancoSol in Bolivia. A champion for financial inclusion, Kurt led BancoSol since 2000, and his work pioneered the commercial model of microfinance that today is used across the world to enable millions of low-income people to access the basic financial tools they need to build better lives.</p>
<p>Under Kurt’s leadership, BancoSol provided more than 1.5 million low-income consumers and small businesses in Bolivia with the high-quality financial services they need to grow and thrive. And 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 and uncertain circumstances.</p>
<p>In Kurt’s memory, Accion and BancoSol partnered to create the Kurt Koenigsfest Memorial Scholarship Fund to help provide educational scholarships for the children of BancoSol’s hardworking clients, who mattered so much to Kurt. The field of financial inclusion lost a leader much too soon, but Kurt’s legacy lives on in the families, small businesses, and communities he helped support, and it will continue to inspire our work to build a financially inclusive world.</p>


Together, we can build a better future

<p>Our work remains more urgent than ever. We rely on the support of visionary individuals, and innovative global partnerships across the public and private sectors to enable and amplify our work. Together, we can create a more inclusive economic recovery—where every individual has access to resources and services to build resilience, seize opportunities, and reach their full potential.</p>
<p><a href="https://give.accion.org/page/contribute/"><strong>There are many ways you can support our work.</strong></a> To learn more about our innovative partnership opportunities, contact Nazanine Scheuer at nscheuer@accion.org</p>


Accion 2020 financials

<p>Accion’s most recent audited financial statements are available <a href="https://www.accion.org/financials">here</a>.</p>


Board of Directors

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


In 2020, Accion provided critical financial tools for the people most affected by the global pandemic to build resilience and rebuild their livelihoods. Our work is laying the foundation for an inclusive recovery that opens opportunity for all. 

Report

<h1>Building a resilient and inclusive future</h1>
<h4>We open opportunity to rebuild, adapt, and thrive:</h4>
The COVID-19 pandemic is the most severe challenge to face low-income and underserved people in our lifetimes—threatening their survival and ability to provide for their families. In 2020, Accion worked to ensure vulnerable people can access the financial tools they need to safely save money, grow a business in our increasingly digital economy, or better protect themselves in a crisis.

The pandemic exacerbated economic inequalities that have made life harder for low-income people, women, and other underserved groups. Accion quickly pivoted to start bridging these divides and build the resilience of our partners and their vulnerable clients. We leveraged digital technology to expand access to financial tools that help people live healthier, safer, more prosperous lives—tools usually denied them. We invested in the entrepreneurs and companies that provide inclusive financial services. We guided and advised these companies and others to ensure their success. And we conducted rigorous research and advocacy to advance inclusive financial systems for low-income people around the world.

Accion 2020 Annual Report

Michael Schlein

We must focus our recovery efforts on those most affected by the COVID-19 crisis around the world.

In New York City, we’re removing our masks. Restaurants and small businesses are filling with customers again. Vaccines are plentiful. The city is returning to a new normal.

Meanwhile, in Mumbai, people are getting sick and the health system is dangerously overloaded. People are literally dying in the streets. New lockdowns are making it even harder for small businesses and families to make ends meet.

And in Bogota, thousands of people are protesting. Inequality is growing and there is widespread anger and worry about what the future looks like.

This is the world we now live in. The disparity between the developed and the developing world has never been greater—and it is growing. This is not good.

Accion is a global nonprofit dedicated to creating a financially inclusive world. We work with partners around the world to help disadvantaged people get the financial tools they need to build better lives. The disparities we are seeing have never been more extreme. I fear that, without significant action, they will get much worse.

We have never lived through a global pandemic of this magnitude. It is human nature that, as we face extreme challenges, we focus on trying to solve the most local of problems. And that’s what we’ve seen. During the pandemic, philanthropy has become locally focused. But, now, we need to change that.

As we take off our masks, we need to open our eyes to devastating disparities around the world. We need to create the world we aspire to live in—and take the steps to get there. We need to help vulnerable people in the developing world get through this crisis—and rebuild their lives.
<h3><strong>Going digital to build an inclusive recovery</strong></h3>
In addition to helping vaccinate the rest of the world, the U.S. and wealthy nations must work to create an inclusive recovery for all. A great way to support that goal is to leverage digital technology to help more people, families, and small businesses start participating in the digital economy and build financial resilience.

One small silver lining of the pandemic has been the widespread adoption of digital financial services. When face-to-face transactions weren’t possible, if you had a digital alternative, you seized it. If you could pay a bill without leaving your home, you did. So we’ve seen a huge uptake in digital tools that offer more security, flexibility, and opportunities than cash. <a href="https://www.gsma.com/newsroom/press-release/mobile-money-accounts-grow-to-1-2-billion-in-2020/">A recent report from GSMA</a> found that mobile money accounts grew by 13 percent in 2020 to more than 1.2 billion—and remittances sent via mobile money exceeded $1 billion per month for the first time ever. These are encouraging signs.

But this is just a first step. We need to build on this and help people use these tools to achieve meaningful financial inclusion. More than just payments, we need to provide the financial tools of resilience: savings, insurance, and appropriate credit. We need to help small mom-and-pop shops digitize and manage themselves better, faster, and safer. And we need to make sure that the most vulnerable people in the world have the digital literacy to use these tools well and to get the most out of them.

<a href="https://www.accion.org/campaign-build-resilience">With your support</a>, we will continue to help those most affected by the pandemic and those most at risk of being left behind. Together, we will expand the reach, quality, and affordability of critical tools that help adapt against today’s challenges, build financial resilience, and lay the foundation for an inclusive recovery. If we can do this, ultimately, we can emerge from the pandemic and build a global economy that can work for everyone. That’s our vision.

Growing disparities threaten an inclusive recovery

Kathleen Yaworsky

Three ways providers can use data to better serve them

<em>This article was originally published on <a href="https://nextbillion.net/covid19-small-businesses-digital-financial-services-data/" target="_blank" rel="noopener noreferrer">NextBillion</a>.</em>

Before COVID-19, small merchants globally were gradually beginning to see the power of digital financial services. Transitioning to digital services helps small businesses transact faster, smarter and safer, and opens up credit options and other benefits. It also increases their financial inclusion, which gives them the tools to achieve financial security and grow their businesses. Yet despite these benefits, many micro and small enterprises have been slow to move past their traditional, cash-based operations.

But then the pandemic struck, bringing a new awareness of the drawbacks and dangers of relying on cash. Suddenly, digital access to financial services was more than a “maybe someday” — it was an urgent priority.

In the early months of COVID-19 shutdowns, <a href="/bolivias-small-businesses-need-innovative-products-to-help-them-grow" target="_blank" rel="noopener noreferrer">BancoSol</a> in Bolivia — the first regulated commercial bank in the world dedicated to micro and small entrepreneurs — saw its digital transaction volumes rising. It soon realized that speeding up its digitization efforts would be key to a lasting recovery for Bolivia’s small merchants, by enabling BancoSol to stay in touch with its customers and continue to support them throughout the pandemic. BancoSol serves 1.5 million microentrepreneurs in Bolivia, where the informal small business sector employs <a href="https://www.smefinanceforum.org/data-sites/msme-country-indicators" target="_blank" rel="noopener noreferrer">more than half the country’s population</a>, the majority of whom still operate in cash. By shifting its many microentrepreneur customers to digital services, the bank could help them weather the pandemic.

BancoSol also realized that these businesses’ long-term resilience would be enhanced if they maintained their usage of digital financial services even after the crisis, so it committed to making this new trend stick. The only question was: How?

An answer to that question came via a <a href="https://www.accion.org/mastercard-and-accion-partner-to-unlock-growth-for-millions-of-underserved-microbusinesses-around-the-world" target="_blank" rel="noopener noreferrer">first-of-its-kind partnership</a> between Accion and Mastercard, which aims to empower microbusinesses to join and benefit from the digital economy, while boosting their financial inclusion. Over the past year, the partners have been supporting BancoSol to integrate responsible data use by the organization in order to better serve their customer base of microentrepreneurs.

Like many microfinance organizations, BancoSol has years of customer data. But it often didn’t know what to do with all that information. To help the bank derive data-driven insights with the objective of expanding financial inclusion for microbusinesses in Bolivia, 40 Mastercard volunteers in Bogota, Colombia and Arlington, Virginia gathered virtually in a 36-hour “datathon.” The goals of the exercise were to understand how to enable digital adoption by more BancoSol customers, better serve them with more products and retain them over the long term. While planning for the datathon had begun prior to the pandemic, its findings proved to support BancoSol’s efforts to help its customers recover from the crisis and build financial resilience. The datathon developed the methodologies and a proof of concept for how BancoSol and other microfinance institutions can take a more data-driven, customer-centric approach. Below are the three steps it identified for tapping into customer insights to better serve the needs of micro and small business customers.
<h2>Using data to improve digital financial services for micro and small businesses</h2>
<strong>Start by understanding your typical digital customer:</strong> Analyzing customer banking patterns can help identify customer segments that are most likely to go digital. In BancoSol’s case, data-driven insights indicated that its typical digital app customer was more likely to be female, and more likely to be younger compared to the average BancoSol client. By better understanding the typical digital customer, BancoSol can prioritize the customer segment that may be most-inclined towards digital adoption.

<strong>Equip loan officers with insights to match customers with products that meet their needs: </strong>The datathon analysis indicated that app users made nearly twice as many deposits as other users — linking digital adoption with increased usage. As <a href="https://www.cgap.org/blog/financial-services-build-resilience-face-crises-covid-19" target="_blank" rel="noopener noreferrer">research has shown</a>, greater use of financial products, whether that’s insurance, savings or credit, makes small businesses more resilient to shocks like COVID-19 and also ensures the bank’s own sustainability. Equipped with these kinds of insights, BancoSol was able to streamline the app experience to better match customer expectations and develop clear messaging for loan officers to better communicate key benefits of going digital.

<strong>Retain customers by being proactive, not reactive: </strong>The datathon also offered insights on customer retention enabling the bank to reduce attrition by proactively engaging customers before they begin to disengage. The data-driven insights also suggested that a digital connection can improve retention in the absence of an in-person connection — a critical benefit in this era of social distancing.
<h2>Helping more financial service providers reap the benefits of data</h2>
Insights like these can help more inclusive financial service providers use their data to become more customer-centric. “The data was always there,” said Carlos Otalora Martínez, national manager of information technology at BancoSol, referring to the bank’s customer data. “But now we see it in a different way, with more value. This fact led us to delve into organizational changes to better leverage the data, as well as ensure that the data is structured, clean and available for consumption — actions that we are already taking with the impetus provided by the datathon exercise.”

As a next step, Accion plans to develop a playbook outlining the processes and methodologies used during the datathon, so other inclusive financial service providers can use their own internal data to drive their digital transformation. The playbook will include customer segmentation concepts, as well as guidance on using statistical modeling to prioritize customers and personalize their experiences.

For BancoSol, the datathon revealed the potential of data to better support the millions of small merchants who are working hard to stay in business — and who power the Bolivian economy. If other financial inclusion-focused institutions in other markets leverage their data to similar effect, they can help to speed a digital transition that can help reduce the economic damage of the pandemic, and set micro and small enterprises on the path toward greater success after the crisis has ended.

<em>Written in collaboration with <strong><a href="https://nextbillion.net/authors/aaron-lewin/" target="_blank" rel="noopener noreferrer">Aaron Lewin</a>,</strong> Associate Managing Consultant at <a href="https://www.mastercard.us/en-us/vision/who-we-are.html" target="_blank" rel="noopener noreferrer">Mastercard</a></em>.

COVID-19 is showing small businesses the benefits of digital financial services

Spanish version

<h1><strong>Unirse para ayudar a abordar las causas fundamentales de la crisis migratoria</strong></h1>
<p>América Latina es la región <a href="https://www.worldbank.org/en/region/lac/overview">más afectada</a> por la pandemia, y en el Triángulo Norte — El Salvador, Guatemala y Honduras — una atroz combinación de pobreza y violencia impulsa la migración masiva hacia Estados Unidos. Los tres países se encuentran dentro o cerca del tercio inferior del<a href="http://hdr.undp.org/en/content/latest-human-development-index-ranking"> Índice 2020 de Desarrollo Humano</a> de la ONU. La proporción de personas que ganan <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/14/remarks-by-vice-president-harris-at-virtual-roundtable-of-experts-on-the-northern-triangle/">menos de $5,50 al día</a> va del 22 por ciento en El Salvador, hasta casi el 50 por ciento en Honduras. En esos dos países, las <a href="https://www.pewresearch.org/fact-tank/2020/08/31/amid-covid-19-remittances-to-some-latin-american-nations-fell-sharply-in-april-then-rebounded/">remesas</a> representaron más del 20 por ciento del PIB en 2019 y estos flujos vitales se vieron afectados por la pandemia.</p>
<p>Mientras miles de migrantes continúan huyendo de sus países, el gobierno de Biden está intensificando sus esfuerzos para abordar las <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/14/remarks-by-vice-president-harris-at-virtual-roundtable-of-experts-on-the-northern-triangle/">causas profundas</a> de la crisis. Más allá de cualquier respuesta gubernamental, este problema también requiere la participación activa del sector privado, de las ONG y de grupos humanitarios.</p>
<p>Un esfuerzo coherente de estos sectores es clave para lograr cambios en las vidas de las personas afectadas. En particular, las instituciones financieras del sector privado y las ONG pueden velar por que los recursos lleguen a las personas y pequeñas empresas que necesitan financiamiento y apoyo para crecer, e incentivos para quedarse en sus países de origen.</p>
<p>Durante décadas, las instituciones microfinancieras (IMF) han sido pioneras llevando servicios financieros a algunas de las personas más vulnerables y excluidas del mundo. En el Triángulo Norte, muchas IMF y cooperativas se enfocan en atender a los pobres, precisamente las personas con más probabilidades de emigrar. Si dispusieran de capitales adicionales y <a href="https://www.centerforfinancialinclusion.org/theres-not-an-app-for-that-taking-a-hard-look-at-the-app-ification-of-migration"> nuevas tecnologías</a>, estas instituciones podrían crecer significativamente y ayudar a más personas a expandir sus actividades agrícolas, crear pequeñas empresas y aumentar sus ingresos.</p>
<p>Las IMF ya <a href="https://www.redcamif.org/wp-content/uploads/2020/12/39-Reporte-Trimestral-de-Cartera-Junio-2020.pdf">llegan a casi el 9%</a> de la población de la región, unas 4 millones de personas; atienden a clientes que desempeñan un papel importante en la economía de la región y son las que debemos ayudar: el <a href="https://www.redcamif.org/wp-content/uploads/2020/12/39-Reporte-Trimestral-de-Cartera-Junio-2020.pdf">62 por ciento</a> de los prestatarios activos de las IMF en la región son mujeres, y el sesenta por ciento vive en áreas rurales. Y considerando que la cartera total de las IMF en cada país ya equivale a entre 2 y 7 veces el monto anual de ayuda al desarrollo de los Estados Unidos, la oportunidad de lograr escala e impacto es inmensa.</p>
<h3><strong>Tres formas en las que las ONG y el sector público y privado pueden ayudar a crear oportunidades económicas</strong></h3>
<p>Los sectores público y privado de los Estados Unidos deberían unir esfuerzos para apoyar a las IMF en el Triángulo Norte, sirviendo de salvavidas económico para millones de pequeñas empresas y familias en la zona. Aquí hay tres formas en las que las instituciones financieras de desarrollo de los EE. UU., con el apoyo de aliados filantrópicos o corporativos, podrían ayudar a las IMF a expandir las oportunidades económicas en toda Centroamérica:</p>
<h4>Primero, necesitamos catalizar la transformación digital de las IMF.</h4>
<p>La pandemia continúa ampliando la brecha digital, amenazando con rezagar a personas que carecen de las herramientas y las habilidades que necesitan para adaptarse, reconstruir y recuperarse. Ayudar a las IMF a aprovechar las tecnologías que ahorran tiempo y costos puede permitirles llegar a más clientes y comprender sus necesidades, y mejorar sus operaciones.</p>
<p>Y a medida que las IMF se transforman digitalmente, pueden ayudar a sus clientes a hacerlo también, lo que permitirá a los microempresarios mantener sus negocios en funcionamiento durante los confinamientos, y acceder a los beneficios de la economía digital. Pero dado que estas IMF se enfocan en los pobres, necesitan apoyo a través de financiamiento y subsidios para innovar y transformarse exitosamente.</p>
<h4>En segundo lugar, debemos ampliar el apoyo mediante el financiamiento de la deuda.</h4>
<p>En medio de las prolongadas dificultades de la pandemia, las IMF tienen gran necesidad de liquidez para ofrecer crédito a más clientes. Las agencias de desarrollo estadounidenses deberían establecer mecanismos de financiamiento de deuda para ayudar a las IMF centroamericanas a acceder al capital que requieren ahora, y solo exigirles ulteriormente la amortización de la deuda con pago de intereses.</p>
<p>Este financiamiento ayudaría a las IMF a ofrecer más crédito, seguros y otros servicios que las pequeñas empresas necesitan para crecer y prosperar. También podría permitir a las IMF ofrecer nuevos servicios como el financiamiento de la cadena de suministros, y aprovechar los <a href="https://www.devex.com/news/anticipated-remittance-dive-bucked-by-latin-america-and-the-caribbean-98880">ya elevados niveles de remesas</a> para reducir sus costos relacionados y ofrecer préstamos basados en remesas.</p>
<h4>Y tercero, debemos garantizar que las IMF pueden llegar a personas vulnerables.</h4>
<p>Si las IMF incrementaran su actividad crediticia, también asumirían mayores riesgos a medida que más pequeñas empresas comiencen a recibir crédito. Las agencias de financiamiento para el desarrollo de los EE. UU. deberían crear un garantías de portafolio para apoyar a las IMF centradas en llegarle a mercados con objetivo más riesgosos. Esto ayudaría a estabilizar las IMF a medida que aumentan la actividad crediticia. Garantizando que tengan la base sólida que necesitan para continuar dinamizando las economías locales.</p>
<p>Muchos factores han contribuido a la migración masiva en Centroamérica, y es probable que la persistente pobreza esté relacionada con todos ellos. Mediante el apoyo adecuado para expandir su alcance y aprovechar la tecnología digital, las IMF en Centroamérica pueden actuar como poderosos aliados para estabilizar la economía y abordar los componentes económicos fundamentales de la migración. En este momento, cuando la vicepresidenta Harris se prepara para reunirse con los líderes del Triángulo Norte, estas instituciones deben seguir siendo una prioridad en la discusión sobre cómo ayudar a las personas vulnerables a lograr una base económica en sus países de origen.</p>


With the right support, inclusive financial service providers can help more low-income people in Central America access economic opportunity.

Latin America is the region <a href="https://www.worldbank.org/en/region/lac/overview" target="_blank" rel="noopener noreferrer">hardest hit</a> by the pandemic, and in the Northern Triangle — El Salvador, Guatemala, and Honduras — a vicious combination of poverty and violence is driving mass migration to the United States. All three countries fall near or in the bottom third of the UN’s <a href="http://hdr.undp.org/en/content/latest-human-development-index-ranking" target="_blank" rel="noopener noreferrer">2020 Human Development Index.</a> The share of people earning <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/14/remarks-by-vice-president-harris-at-virtual-roundtable-of-experts-on-the-northern-triangle/" target="_blank" rel="noopener noreferrer">less than $5.50 per day</a> ranges from 22 percent in El Salvador to nearly 50 percent in Honduras. In those two countries, <a href="https://www.pewresearch.org/fact-tank/2020/08/31/amid-covid-19-remittances-to-some-latin-american-nations-fell-sharply-in-april-then-rebounded/" target="_blank" rel="noopener noreferrer">remittances</a> accounted for more than 20 percent of GDP in 2019—and these vital flows took a major hit from the pandemic.

As thousands of migrants continue to flee their home countries, the Biden Administration is ramping-up efforts to address the <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/14/remarks-by-vice-president-harris-at-virtual-roundtable-of-experts-on-the-northern-triangle/" target="_blank" rel="noopener noreferrer">root causes</a> of the crisis. Beyond any government response, this problem also requires active participation from the private sector, NGOs, and humanitarian groups.

A coherent effort across these sectors is key to making a difference in the lives of the people affected. In particular, private sector financial institutions and NGOs can ensure resources go to the individuals and small companies that need funding and help to grow their businesses, and an incentive to remain in their home countries.

For decades, microfinance institutions (MFIs) have pioneered ways to bring financial services to some of the world’s most vulnerable and excluded people. In the Northern Triangle, many MFIs and cooperatives focus on reaching the poor—precisely the people most likely to emigrate. With additional capital and <a href="https://www.centerforfinancialinclusion.org/theres-not-an-app-for-that-taking-a-hard-look-at-the-app-ification-of-migration" target="_blank" rel="noopener noreferrer">new technology</a>, these institutions could grow significantly and help more people expand their farms, build small businesses, and boost incomes.

MFIs already <a href="https://www.redcamif.org/wp-content/uploads/2020/12/39-Reporte-Trimestral-de-Cartera-Junio-2020.pdf" target="_blank" rel="noopener noreferrer">reach almost 9 percent</a> of the region’s population, or 4 million people. They serve clients who play important roles in the region’s economy, and who we need to help: <a href="https://www.redcamif.org/wp-content/uploads/2020/12/39-Reporte-Trimestral-de-Cartera-Junio-2020.pdf" target="_blank" rel="noopener noreferrer">62 percent</a> of active MFI borrowers in the region are women, and 60 percent live in rural areas. And considering that the total MFI portfolio in each country is already 2 to 7 times the annual amount of U.S. development aid, the opportunity to scale and achieve impact is immense.
<h3><strong>Three ways NGOs and the public and private sector can help create economic opportunities</strong></h3>
The United States’ public and private sectors should unite to support MFIs in the Northern Triangle and extend an economic lifeline for millions of small businesses and families there. Here are three ways that U.S. development finance institutions, with support from philanthropic or corporate partners, could help MFIs expand economic opportunities throughout Central America:
<h4>First, we need to catalyze the digital transformation of MFIs.</h4>
The pandemic continues to widen the digital divide, threatening to leave behind people without the tools and skills they need to adapt, rebuild, and recover. Helping MFIs leverage time- and cost-saving technologies can allow them to reach more clients, understand their clients’ needs, and improve their operations.

And as MFIs digitally transform, they can help their clients do the same, allowing microentrepreneurs to stay in business during lockdowns and access the benefits of the digital economy. But given their focus on the poor, MFIs need support through funding and subsidies to successfully innovate and transform.
<h4>Second, we need to extend support through debt financing.</h4>
Amid the pandemic’s continuing hardships, MFIs have a serious need for liquidity to offer credit to more clients. U.S. development agencies should set up a debt financing facility to help Central American MFIs access the capital they need today, while requiring them to pay off the debt at a later date, with interest.

This funding would help MFIs offer more credit, insurance, and other services that small businesses need to grow and thrive. It could also help MFIs offer new services, like supply chain financing, and leverage <a href="https://www.devex.com/news/anticipated-remittance-dive-bucked-by-latin-america-and-the-caribbean-98880" target="_blank" rel="noopener noreferrer">already high levels of remittances</a> to lower their related costs and offer remittance-based lending.
<h4>And third, we must ensure MFIs can reach vulnerable people.</h4>
Should MFIs increase their lending activity, they would also assume more risk as more small businesses start receiving credit. U.S. development finance agencies should create portfolio guarantees to support MFIs focused on reaching riskier target markets. This would help stabilize MFIs as they increase lending activity and take on more losses, ensuring they have the solid footing they need to continue energizing local economies.

Many factors have contributed to mass migration in Central America, and persistent poverty is likely linked to every one. With the right support to expand their reach and harness digital technology, MFIs in Central America can serve as powerful partners in stabilizing the economy and addressing the root economic causes of migration. As Vice President Harris prepares to meet with leaders in the Northern Triangle, these institutions should remain top of mind in the discussion on how to help vulnerable people gain an economic foothold in their home countries.

Coming together to help address the root causes of the migration crisis

Prateek Shrivastava

Foreword to Accion’s digital transformation guide: Six strategies to scale financial inclusion

As the spread of COVID-19 first escalated to frightening levels, nations around the world took drastic action. Lockdowns and travel restrictions caught millions of small businesses off guard. Many shuttered their doors, while others were able to adapt to the circumstances.

Chakrapani, a client of Accion’s partner Sub-K IMPACT Solutions Ltd., owns a small <em>kirana </em>(general goods) store with his wife, catering to the daily needs of neighborhood residents in Hyderabad, India. The store remained open during India’s lockdown because it provides essential goods. Given travel restrictions, more families started depending on Chakrapani’s store to meet daily needs, and traffic in his store doubled. To cater to growing demand, Chakrapani started accepting digital payments through his previously unused mobile wallet account. He also offered home deliveries, stocked up on a variety of in-demand items, and increased his distributor network, all through his mobile device.

Digital tools can help more micro, small, and medium enterprises (MSMEs) like Chakrapani’s build resilience in unpredictable times by expanding access to tools like credit, payments, insurance, and business management advice. This can lay the foundation for an inclusive economic recovery from the ravages of the pandemic.

In November 2018, the Mastercard Center for Inclusive Growth and Accion launched a partnership to transform millions of underserved MSMEs around the world and help them participate in, and benefit from, the digital economy. Among other efforts, the partnership is reaching this goal by driving the digital transformation of financial service providers (FSPs) to help them serve more small businesses and families more effectively.

This work coincides with broad changes in customer behavior that have accelerated as a result of COVID-19. Significant portions of the economy have moved online, and as more interactions become remote, they expose gaps in the operational resilience of traditional financial institutions. In turn, these providers have put more energy into digital transformation efforts to reach and support customers in need.

We are now two years into our four-year partnership, and our teams and the institutions we are working with around the world have learned (and continue to learn) so much. Accion’s advisory team has worked hand in hand with the institutions to create and shape digital strategies, implement and upgrade digital channels, design new digital products, and form strategic partnerships, navigating unprecedented challenges with creativity and vigor. <a href="https://www.accion.org/the-digital-transformation-guide-six-strategies-to-scale-financial-inclusion" target="_blank" rel="noopener noreferrer">Accion shares the insights gained from this work here</a>, as a part of our effort to ensure our endeavors and accomplishments serve as demonstration models for the industry. Given the urgency of digital transformation to build an inclusive recovery, this paper provides timely insights to help FSPs and their partners navigate the digital transformation journey and addresses key questions surrounding digital transformation, including <a href="https://www.accion.org/the-digital-transformation-guide-six-strategies-to-scale-financial-inclusion" target="_blank" rel="noopener noreferrer">where to start and where to focus</a>.

<hr />

<a href="https://bit.ly/3adofG3" target="_blank" rel="noopener noreferrer"><img class="wp-image-24105 alignleft" src="https://content.accion.org/wp-content/uploads/2021/04/Mastercard-e1619578679836.png" alt="Mastercard Center for Inclusive Growth logo" width="274" height="92" /></a>

&nbsp;

<a href="https://www.accion.org/mastercard-and-accion-partnering-for-inclusive-growth" target="_blank" rel="noopener noreferrer"><em>This paper is supported by the Mastercard Center for Inclusive Growth.</em></a>

&nbsp;

<em>Written in collaboration with: </em><em><strong>Payal Dalal</strong>, Senior Vice President, Social Impact, International Markets, Mastercard Center for Inclusive Growth</em>

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