COVID-19 is pushing more than 100 million people back into poverty.

Only half of people worldwide have any savings.

Climate change affects the poorest households most.

Low-income farmers are vulnerable to extreme weather conditions.

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

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Michael Schlein

Farmers and agribusinesses face major challenges today, but innovative fintech can help them build resilience.

Article

As the pandemic continues to move businesses online, making digital tools more <a href="https://www.accion.org/growing-disparities-threaten-an-inclusive-recovery">vital</a> for the survival of families and small businesses, some might overlook the importance of the thousand-year-old agricultural sector in building an inclusive and effective economic recovery. Farming and agriculture have long played major roles in reducing poverty and creating economic opportunities, and new technologies are revolutionizing the industry, empowering farmers and agribusinesses to build their financial resilience.

<a href="https://www.worldbank.org/en/topic/agriculture/overview">Two thirds</a> of the world’s working poor make a living through agriculture, and smallholder farmers produce around <a href="https://www.sciencedirect.com/science/article/abs/pii/S0305750X2100067X?via%3Dihub">a third</a> of the world's food. But <a href="https://globalfindex.worldbank.org/">235 million</a> farmers, including 115 million women, are unbanked and receive payments in cash, keeping them invisible to financial institutions. And despite the valuable income, food, and economic stability that farmers provide, they face more challenges today than ever.

The pandemic created many <a href="https://www.globalcitizen.org/en/content/ifad-food-security-during-covid-19/">obstacles</a> for farmers and agribusinesses, including disrupted supply chains and difficulties storing excess crops, causing them to spoil. Stifled economies and social unrest have further destabilized the already fragmented agricultural value chain.

Climate change poses many <a href="https://www.ucsusa.org/resources/climate-change-and-agriculture">threats to farmers</a> and those who depend on them, including increasing rates of floods, droughts, monsoons, and hurricanes, which disrupt supply chains, destroy crops, and destabilize farmers’ way of life. New <a href="https://www.centerforfinancialinclusion.org/climate-change-is-exacerbating-covid-19-recovery-for-msmes-in-nigeria">data</a> from the Center for Financial Inclusion illuminate the impact of climate change on small businesses: a quarter of entrepreneurs in Nigeria experienced a climate shock in the last five years—and those who did took longer to recover from the effects of COVID-19.

Women make up <a href="http://www.fao.org/gender/background/en/">nearly half</a> of farmers but often face discrimination that limits their ability to earn a living and provide for their families. For example, <a href="https://foodtank.com/news/2021/06/research-in-malawi-shows-how-access-impacts-female-farmers/">a recent study</a> in Malawi found that social norms and customs constrained female farmers to areas with less fertile soil, leading to lower crop yields.
<h2><strong>Advancements in agritech can build an inclusive recovery</strong></h2>
The agricultural sector will play a central role in our global recovery from the pandemic, and advancements in agritech can help farmers and other related businesses boost their profits, start participating in the digital economy, and build their financial resilience against future challenges, especially those brought by <a href="https://www.accion.org/opening-opportunities-for-smallholder-farmers-in-a-changing-climate">climate change.</a>

Innovative fintech companies are helping farmers around the world—many of them <a href="https://www.accion.org/for-rose-in-kenya-crop-insurance-is-a-game-changer">women</a>—access digital and financial tools that traditional institutions have been unable or unwilling to provide. Accion Venture Lab portfolio company <a href="https://www.pula-advisors.com/">Pula</a> has provided more than 4.5 million traditionally excluded farmers in Africa and Asia with agricultural insurance and data-driven insights to help them sustainably increase crop yields. <a href="https://www.apolloagriculture.com/">Apollo Agriculture</a>, based in Kenya, also takes <a href="https://www.accion.org/tech-gives-farmers-in-east-africa-a-boost">a tech-based approached</a> to help farmers maximize their profits through mobile money accounts, financing, optimized advice, farming products, and insurance.

Agritech innovation is also strengthening the agricultural value chain, benefitting everyone from small farmers to local distributors. In Latin America, Accion Venture Lab has invested in <a href="https://terramagna.com.br/">TerraMagna</a>, a Brazilian company that <a href="https://www.accion.org/how-one-company-uses-tech-to-support-brazilian-farmers">leverages satellite imaging</a> to lower the cost of underwriting and help more farmers access credit. Small farms are often located in remote areas where traditional banks can’t reach, so they seek credit from local agri-retailers that sell seeds and fertilizer. TerraMagna uses their tech-based approach to assess collateral with more precision, lowering agri-retailers’ credit risk and enabling them to provide lower-cost loans.

Similarly, Accion Venture Lab portfolio company <a href="https://agrim.app/">AGRIM</a> provides <a href="https://www.accion.org/agri-inputs-b2b-marketplace-agrim-emerges-from-stealth-mode-with-2m-in-seed-funding-from-omnivore-india-quotient-and-accion-venture-lab">an e-commerce platform</a> for agri-retailers in India. India’s agri-retailers provide more than 120 million smallholder farmers with essential supplies and informal credit. AGRIM connects these retailers directly to manufacturers, allowing access to a wider range of products that can be delivered to their doorsteps at transparent prices. AGRIM also aims to embed affordable lending products for their clients by leveraging unique data from the platform. Since its founding in April 2020, more than 1,000 manufacturers and 100,000 retailers have joined AGRIM’s platform.

Established microfinance institutions are also leveraging new technologies to respond to the effects of the pandemic. Supported by our global partnership with Mastercard, our partner Annapurna Finance in India <a href="https://www.accion.org/women-entrepreneurs-get-back-to-business-in-india">developed</a> an SMS-based emergency loan product to help rural microentrepreneurs like Papina Das adapt and rebuild. Within three days of applying, Papina received a loan of just 20,000 INR, or $274 USD, which she used to rehire her assistant and restart her dairy farm—and now her sales have nearly fully recovered.
<h2><strong>Supporting the most effective innovations</strong></h2>
We must continue to <a href="https://www.inclusivefintech50.com/">support and elevate innovators</a> who are finding new ways to answer the financial needs of underserved farmers and agribusinesses. The potential of innovation is limitless, and underserved small businesses of all kinds need digital and financial tools to recover and grow. Working together, investors, policymakers, and development finance institutions should foster advancements in fintech that are helping farmers, agribusinesses, and other underserved entrepreneurs open economic opportunities in their communities.

With support from fintech, farmers can grow an inclusive global recovery

Paolo Limcaoco

Why Accion Venture Lab invested in Fairbanc, a digital platform in Indonesia helping small merchants grow with a seamless inventory financing solution

Mom-and-pop stores are pillars of neighborhoods in lower-to-middle income communities. These family-owned retail shops — called <em>warungs</em> in Indonesia, <em>sari-sari</em> stores in the Philippines, or <em>kirana</em> shops in India — serve as the place where people gather, catch up with friends, and purchase daily essentials like food, mobile phone reloads, sachets of shampoo and soap, and even cigarettes by the stick. Often called “the community pantry,” these small shops play a crucial role in meeting the everyday needs of their neighbors.

Despite the important role they play in their communities, these small businesses can rarely access any form of formal financial support. Even as online payments and other digital financial services gain traction, these small businesses have remained largely unchanged, cash-based, lacking formal record-keeping, and therefore left out of the financial system. Without access to financial products, especially the credit needed to purchase inventory, these small merchants are constrained by the cash they have on hand and can’t properly grow their business or meet increasing demand from their customers.

With this in mind, we are excited to <a href="/fairbanc-secures-funding-from-adb-ventures-accion-venture-lab-east-ventures-and-sampoerna-to-scale-indonesians-micro-merchants-access-to-embedded-credit-products" target="_blank" rel="noopener noreferrer">announce our investment in Fairbanc</a>. Fairbanc is a tech platform in Indonesia that enables inventory financing for small retail shops with a buy now, pay later product that is integrated in the ordering apps of large FMCGs (fast-moving consumer goods) and other retail partners. Fairbanc uses partnerships, technology, and integration with retailers to increase the access to financing for small merchants in Indonesia, 70 percent of which are owned and managed by women.

Here is why we are excited to welcome <a href="https://fairbanc.app/" target="_blank" rel="noopener noreferrer">Fairbanc</a> to the Accion Venture Lab portfolio:
<h3>Seamless user experience for small mom-and-pop shops increases adoption and usage</h3>
As we have worked with more and more small businesses, we have come to understand the importance of providing these microentrepreneurs with a solution that is as seamless an experience as possible. We are excited by Fairbanc’s approach, as the team has been very thoughtful about their design to make sure their pay-later solution is as frictionless as possible for small mom-and-pop shops. There is no need to download an application, buy a device, or complete complicated loan application forms. As most microentrepreneurs aren’t tech savvy and don’t possess sophisticated devices, Fairbanc’s approach is critical in increasing usage and adoption, creating a more impactful solution for this underserved population.
<h3>Closed-loop inventory financing helps businesses grow</h3>
For these small shops, cash continues to be king, especially when it comes to procurement. Unable to access credit from formal sources, inventory is typically purchased through cash at hand (sometimes, they resort to informal lenders) which is a major barrier to buying more goods. Through its pay later solution, Fairbanc removes this constraint and allows the mom-and-pop stores to buy more stock, which they can pay for after they have sold to their customers. The increase in inventory leads to growth in sales, which then starts a positive reinforcing loop through an increased credit line and more purchases. In addition, Fairbanc’s provides closed-loop financing, which means that no cash is exchanged. Instead, the credit provided is used only to purchase inventory, ensuring that the financing they receive is always productive and reinvested into their business.
<h3>Integration with corporate partners creates efficiency</h3>
We have recently seen several successful B2B2C models (or B2B2B in Fairbanc’s case) that acquire end-customers through corporate partnerships. While these initial B2B relationships can have longer sales cycles, they can acquire end customers at scale and efficiently. In Fairbanc’s case, the company works with Unilever, Danone, and other FMCG partners to reach and connect with the small merchants that sell their merchandise. These FMCGs allow access to their merchants because they understand the value proposition – integrating Fairbanc’s the pay-later solution increases inventory purchases of merchants, which in turn leads to top line growth. This win-win collaboration between Fairbanc and their corporate partners allows the company to acquire merchants efficiently and serve the microentrepreneurs in a scalable way. Partnerships are always key when serving the underbanked and underserved, and we can see how Fairbanc has made it a major focus of their business.
<h3>Data-driven approach leads to smart lending decisions</h3>
The integration with FMCGs also gives Fairbanc access to a wealth of historical data on the merchants. By utilizing AI and machine learning, Fairbanc analyzes the data and determines which merchants would benefit from credit – shops that are seeing increased demand but lack the ability to purchase more inventory to meet it. Fairbanc also relies on data analysis to offer a dynamic credit line that is updated each week based on merchants’ weekly performance. This data-driven approach ensures that the credit provided is utilized well and that those shops that are experiencing increases in sales and demand have the opportunity to continue to grow their business with a larger line.
<h3>The pandemic proved how critical this product is for small merchants</h3>
Most of Fairbanc’s pilots took place during the pandemic when small merchants desperately needed credit to keep their stores stocked and businesses operating. Across the different pilots of their product, and especially in the rural areas, Fairbanc saw a substantial increase in usage during the pandemic, indicating the additional funding needs of merchants during this time. The additional credit helped merchants keep doors open and even grow their businesses. It is clear from this experience that Fairbanc’s product is highly relevant, especially now as we continue to support small businesses and help entrepreneurs to remain resilient during this challenging time.

Fairbanc marks our fourth investment in Southeast Asia, alongside <a href="/making-education-accessible-through-fintech" target="_blank" rel="noopener noreferrer">specialized education lender Pintek</a> in Indonesia and <a href="/innovation-msme-finance-philippines" target="_blank" rel="noopener noreferrer">digital B2B SME lender First Circle</a> and <a href="https://advance.ph/" target="_blank" rel="noopener noreferrer">earned-wage-access (EWA) platform Advance</a> in the Philippines. We continue to be excited about supporting innovative and impactful founders and startups that bring greater financial inclusion to the region. We believe that Fairbanc’s platform can have a tremendous positive impact, and we are excited to support the team as they reach more small retailers across Indonesia.

An embedded finance platform helps mom-and-pop shops grow in Indonesia

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

Victoria White

We leverage our technical expertise and global experience in digital solutions to help families build better lives and businesses succeed.

Over 1.7 billion individuals around the world are unbanked, with more than 3 billion people either poorly served or left out entirely by the financial sector. At Accion, we believe technology has the power to change that. Nearly 70 percent of unbanked adults own a mobile phone, giving rise to a new generation of digital financial services and an immense opportunity to drive financial inclusion forward.

Financial service providers (FSPs), marketplace platforms, fast-moving consumer goods companies (FMCGs), and other actors in the ecosystem that serve micro, small, and medium enterprises (MSMEs), face numerous strategic and operational challenges today. While digital technology continues to disrupt the financial sector and the world more broadly, as most interactions between MSMEs and their ecosystem partners are still manual, paper-based, and inefficient. With deep technical expertise and innovative approaches, <a href="/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener noreferrer">Accion Global Advisory Solutions</a> helps these players overcome the issues they face in driving change and accelerating the creation of enabling digital ecosystems.

With decades of on-the-ground experience combined with insights into new technologies, our global team delivers strategic and technical advisory support through integrated products and offerings, all toward a north star — creating economic opportunities and a financially inclusive world for MSMEs and low-income households. By addressing the most pressing issues facing financial inclusion, we help mission-driven organizations achieve scale, impact, and returns.

Strengthened by our key partnerships with <a href="/institutional_partnerships/mastercard" target="_blank" rel="noopener noreferrer">Mastercard Center for Inclusive Growth</a>, <a href="/institutional_partnerships/metlife-foundation" target="_blank" rel="noopener noreferrer">MetLife Foundation</a>, and <a href="/institutional_partnerships/fedex" target="_blank" rel="noopener noreferrer">FedEx</a>, to name a few, our work enables families and microbusinesses around the globe to reach their economic potential by expanding access to appropriate financial service options. This approach includes digital tools to manage their financial goals better and digitize business transactions. We firmly believe in giving people the financial tools they need to improve their lives and build resilience at a time when many are facing larger challenges than ever before.
<h3>So how do we make a difference?</h3>
Accion’s <a href="/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener noreferrer">advisory team</a> works closely with FSPs, marketplace platforms, FMCGs, and other ecosystem partners that are uniquely positioned to provide appropriate financial products to low-income individuals and underserved microbusinesses at scale, helping them improve their financial health and resilience.

<img class="aligncenter wp-image-24602 size-full" src="https://content.accion.org/wp-content/uploads/2021/07/accion-global-advisory-solutions-services.png" alt="Accion Global Advisory Solutions services" width="468" height="170" />

Our advisory team applies customer-centric, data-driven, and tech-enabled solutions that help these institutions expand their engagement with MSMEs around the world and maximize their impact. We offer an evolving set of core products that integrate our broad expertise, including:
<ul>
 	<li><strong>Digital lending</strong>: We leverage our capabilities in payments, digital transformation, human-centered design, customer engagement, and data and analytics to deliver <a href="/series/demystifying-digital-lending-series" target="_blank" rel="noopener noreferrer">digital lending</a> solutions to more underserved clients in faster, more cost-efficient, and engaging ways.</li>
 	<li><strong>Digital payments</strong>: When small business owners can send and receive digital payments, they can run their businesses more efficiently. We connect MSMEs and FSPs to digital payments, decreasing both parties’ operational costs and offering greater convenience and flexibility for underserved customers. We facilitate win-win partnerships to integrate ecosystems, provide strategy and implementation support, and use customer insights to inform <a href="/topics/payments" target="_blank" rel="noopener noreferrer">digital payment</a> product design.</li>
 	<li><strong>Digital transformation</strong>: For merchants to easily access financial and other value-add services digitally, Accion recognizes that the entire ecosystem requires digital capabilities, third-party integrations, and customer-facing apps. Accion takes a holistic view of <a href="/topics/digital-transformation" target="_blank" rel="noopener noreferrer">digital transformation.</a> We design and implement digital strategies that help institutions realize their long-term ambitions while also connecting microentrepreneurs to the digital economy so that they can become more resilient. We have developed diagnostics to evaluate the digital skills of small merchants, and tools that help both FSPs and MSMEs build their digital capabilities.</li>
 	<li><strong>Supply chain finance</strong>: We offer a comprehensive <a href="/series/supply-chain-finance" target="_blank" rel="noopener noreferrer">supply chain finance</a> solution that optimizes working capital, reduces risk, and increases revenues. This solution enables FSPs and other supply chain actors to extend more services to existing and new merchants and achieve greater scale through close collaboration.</li>
 	<li><strong>Risk strategy and scorecards</strong>: Accion has developed in-house expertise in collecting, structuring, and analyzing data to realize the benefits of digitization. To help FSPs <a href="/topics/risk-and-credit-analysis" target="_blank" rel="noopener noreferrer">manage risk and leverage data efficiently</a>, we work to reduce credit risk through risk management frameworks, credit decision tools, propensity modeling, and underwriting techniques.</li>
 	<li><strong>Accion Design</strong>: Accion works with financial sector partners to create customer-centric products and services using <a href="/topics/human-centered-design" target="_blank" rel="noopener noreferrer">human-centered design</a>, behavioral science, and data science. This approach helps us build easy and intuitive products for customers to use when accessing services digitally and fuels innovation and transformation across organizations.</li>
 	<li><strong>Ovante</strong>: Created by Accion, <a href="https://ovante.org/" target="_blank" rel="noopener noreferrer">Ovante</a> is a digital learning platform that strengthens microentrepreneurs’ managerial, financial, business, and digital capabilities by incentivizing financially healthy behavior changes. This edtech tool enables MSMEs to build the skills they need to thrive in a competitive and digital world.</li>
</ul>
<a href="/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener noreferrer">Accion Global Advisory Solutions</a> helps established institutions serving MSMEs address their strategic and operational challenges head-on through our international expertise in strategy and business model development, ecosystem partnering strategy and implementation, platform and process architecture, and data-driven product design.

Over our 60-year history, Accion has made a tangible impact. We have:
<ul>
 	<li>Partnered with and served over 170 institutions in 55 countries around the world.</li>
 	<li>Empowered more than 10 million people to access credit through our partners, 70 percent of them being women.</li>
 	<li>Helped nearly 9 million people save money through our partner institutions.</li>
 	<li>Enabled over 715,000 micro, small, and medium enterprises to digitize their business operations.</li>
 	<li>Enrolled nearly 500,000 people in our financial education courses to date.</li>
</ul>
Accion Global Advisory Solutions has helped organizations like Destácame, a Chile-based personal financial management platform, <a href="/finding-a-path-to-financial-health-in-chile-one-step-at-a-time" target="_blank" rel="noopener noreferrer">redesign their website to build their users’ financial health</a> by developing simple diagnostics, customized user journeys, and digestible tips. Since January 2020, the platform has attracted over 1 million visitors. In India, Accion Global Advisory Solutions is helping Annapurna Finance Limited develop a digital strategy that will enable the bank to serve its 1.7 million clients more effectively. As part of this strategy, we worked with Annapurna Finance Limited to launch a new <a href="/women-entrepreneurs-get-back-to-business-in-india" target="_blank" rel="noopener noreferrer">digital emergency loan</a> to assist group lending customers as they recover from the pandemic.

Together with our partners, we’re building a digitally integrated ecosystem that delivers high-quality, affordable financial tools and services to MSMEs around the world so we can create an inclusive world with economic opportunity for all.

<em>Please </em><a href="https://www.accion.org/advisory-contact"><em>reach out</em></a><em> to see how we can work together towards a more financially inclusive world.</em>

<em><a href="https://www.linkedin.com/in/malavika-krishnan/" target="_blank" rel="noopener noreferrer">Malavika Krishnan</a> contributed to this article.</em>

How Accion Global Advisory Solutions makes a financially inclusive world a reality

Ashley Lewis

Lami Technologies creates a seamless way for companies to launch customized insurance offerings that bring insurance to more people across Africa

As we’ve seen around the world, and especially across the African continent, most low-income people don’t have a financial safety net when emergencies and challenges arise. Only 3 percent of Africans outside of South Africa have access to insurance, compared to 8 percent of those in developed markets and 6 percent globally. People with access to insurance products are typically higher-income consumers. <a href="https://www.lami.world/" target="_blank" rel="noopener noreferrer">Lami Technologies</a>, an <a href="/lami-technologies-closes-1-8-million-seed-funding-to-accelerate-growth-of-digital-insurance-in-africa" target="_blank" rel="noopener noreferrer">Accion Venture Lab investee</a>, works to broaden access to affordable and relevant insurance in Africa so that more people can build financial security.

Through Lami’s tech platform, business-to-consumer (B2C) businesses like banks and e-commerce companies can develop and sell insurance to their customers. This approach allows low-income consumers to purchase insurance specific to their needs from businesses they already know and trust. The Lami team and their partners aim to put their customers’ needs first by upholding a customer-centric approach to product design and serving end clients with insurance offerings that are relevant to their lives.

After its founding in 2018 by Jihan Abass, Lami launched a B2C offering that proves that their back-end can support the distribution of insurance for larger partners and reach even more people. Today, they work with several insurers, reinsurers, and partners in Kenya and are exploring international markets such as Nigeria, Egypt, and Uganda. Lami’s model is well-positioned for international expansion and furthering their goal of providing coverage for more Africans across the region. We’re excited to invest in Lami because they:
<h3>Reach low-income Africans with affordable, relevant insurance</h3>
Because of the low adoption rate of insurance across Africa, many people are financially underprepared for life’s emergencies and unaware of the importance and relevance of insurance. Lami offers an innovative solution for these customers by expanding their options for affordable insurance, thus providing more protection that may not have been offered in the past. There is ample space for an innovator like Lami to grow by reaching the large population of uninsured people in Africa and introducing more products into the market.

Lami has the potential to significantly expand the selection of insurance products available to end customers. They have found interesting ways to embed insurance into their customers’ daily lives by meeting people where they are, from making online purchases to taking public transportation. Lami provides an alternative pathway for consumers to purchase affordable, convenient insurance by allowing them to buy customized products from banks, telecommunications companies, and other businesses that partner with Lami. These partners, Lami’s B2B clients, can draw on their understanding of their customer base to create products tailored to the needs of specific segments. Core to their model is their effort to offer the right insurance products to customers at the right moment via the most appropriate channel and partner. The fact that the insurance products are sold by brands that consumers already know builds trust and awareness in the market at large, which helps overcome major barriers to uptake.
<h3>Leverage technology to quickly and efficiently offer embedded insurance</h3>
Lami streamlines each step of the insurance process for their partner businesses, from user management to claims payout. Their technology compresses the timeline to launch an insurance product from 18 months to one month and reduces the development costs for a B2B client to deploy an insurance product by 80 percent. In doing so, Lami opens the door for a broad array of new providers to offer contextualized insurance for traditionally underserved clients. Through its infrastructure model, Lami can help accelerate insurance penetration in Kenya and other African markets.

Corporate clients such as banks, telcos, e-commerce platforms, and logistics companies work with Lami to design digital insurance products tailored to the needs of their customers and employees. Products are white-labeled and sold with the client brand and through the client’s website or app, using Lami’s APIs, while Lami runs all the back-end processes. We envision that with an offering like this, more corporate clients will be excited to build financial services offerings into the services and products they provide for their customers. With access to Lami’s technology, partners, and know-how, they can better serve their customers.
<h3>Utilize unique data to provide affordable insurance that meets people’s needs</h3>
Lami sits between B2B corporate clients and underwriting partners (i.e., insurance companies), allowing Lami to request, capture, and interpret unique data that can help them better design, price, and distribute insurance offerings. During the onboarding process, Lami works closely with its B2B partners to ensure they are gathering the right kind of data from that client’s platform to provide and ultimately design insurance offerings for consumers and businesses. From there, Lami liaises with underwriters to design products. From an impact perspective, we believe that Lami will be in a position to “widen the funnel” to include traditionally underserved consumers who will now gain access to these products while allowing partners and underwriters to distribute competitively priced products.

We are excited about Lami’s future and look forward to supporting the company as they grow and expand, helping close the gaps between insured and uninsured people across Africa.

Tech opens the door for low-income Africans to get the insurance they need

Federico  Gomez Romero

Dinie partners with online platforms already used by small businesses to seamlessly provide affordable lending products to Brazilian MSMEs

The way we work is going through one of the most profound evolutions in decades, but it’s not the changes themselves that impress me most, it’s the speed at which they are happening. In 2020, companies reacted and adapted to the challenges of COVID-19 up to <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">20 times faster than they would have in a pre-pandemic world</a>. Years of innovation are happening at once. In Brazil, <a href="https://a16z.com/2021/04/13/latin-america-fintech/" target="_blank" rel="noopener noreferrer">where the share of e-commerce in retail grew from 7 percent to 12 percent</a> (more than it grew in the previous 10 years!), the need for MSMEs to digitize their businesses is vital. From restaurants switching to delivery platforms to small entrepreneurs selling their products through Mercado Libre to tech startups doing cross-border operations, companies are embracing the new reality.

Just as the traditional financial sector was trying to catch up with fintechs, COVID-19 arrived and accelerated digital transformation at a rate we had not seen before. Unable to respond as fast as they needed to, banks lagged once again, and a new breed of financial service providers became necessary. Dinie was born out of this moment and has become one of the first Brazilian embedded MSME lenders. Partnering with platforms of all sizes — ranging from small e-commerce sites to prominent players like <a href="https://dlocal.com/press-release/dlocal-partners-with-dinie-for-paylater-to-brazilian-smes/" target="_blank" rel="noopener noreferrer">Dlocal, the latest Latin American company to go public</a>, or the <a href="https://www.dinie.com/ifood" target="_blank" rel="noopener noreferrer">leading delivery platform iFood</a> —Dinie seamlessly provides lending products to help companies meet their short-term capital needs in the same digital environments where they already do business.

Like our recently added portfolio companies <a href="https://www.accion.org/a-fintech-cultivates-tech-talent-in-latin-america" target="_blank" rel="noopener noreferrer">Henry</a>, which provides financing through an Income Sharing Agreement (“ISA”) scheme to its students, and <a href="https://www.accion.org/lami-technologies-closes-1-8-million-seed-funding-to-accelerate-growth-of-digital-insurance-in-africa" target="_blank" rel="noopener noreferrer">Lami</a>, which offers bespoke insurance through businesses customers know and trust, Dinie’s approach is emblematic of how embedded finance is a more scalable, secure, and cost-effective way of lending. In one of the most active startup markets in the world, Dinie is:
<h2>Helping reduce the affordable financing gap for MSMEs</h2>
Despite Brazil’s position as a regional hub of fintech innovation, in-market financial services providers have yet to effectively serve MSMEs with the short-term, affordable products they need. Dinie’s flexible, revolving credit lines allow customers to get the capital they need on-demand without having to complete a new loan application every time they experience cashflow challenges. These MSMEs can use extra working capital in numerous ways to help them grow, including marketing, expense payments, and inventory purchasing. Additionally, by partnering with platforms to offer credit, Dinie can locate the MSMEs on the platforms they are already active on and provide products in a contextualized way.
<h2>Leveraging data to efficiently underwrite and collect loans</h2>
By embedding within partner platforms, Dinie can leverage MSMEs’ data throughout its entire process, from underwriting to repayments. With these insights into its MSME clients’ cashflows and repayment behaviors, Dinie can monitor and adjust credit lines as needed to avoid customers becoming over-indebted. Over time, this data will allow Dinie to evolve and expand its product suite, give partner platforms insights into how to serve their end customers better, and ultimately drive loyalty.
<h2>Proving that embedded finance is a better way of lending</h2>
Dinie’s embedded finance solution and B2B2C acquisition strategy give the company several advantages over direct lenders. For underwriting, Dinie uses MSME customer data from its platform partners to pre-approve clients and assign limits. Once MSMEs accept their pre-approved credit — offered to them within the platform interface — Dinie collects external data via its API to complete customer KYC and onboarding. Regarding collections, Dinie sits directly in the payment flow between the platforms and their customers and automatically deducts repayments from MSME cashflows. These innovations, which the company developed over the last year, are resulting in a more scalable and responsible way of lending.
<h2>Empowering startups to thrive while helping their clients</h2>
For platforms in their early stages, helping their MSME customers with credit both provides a new revenue source and boosts their core business. <a href="https://scifivc.substack.com/p/embedded-lending" target="_blank" rel="noopener noreferrer">Lending could be the ultimate economy of scale for companies with high startup costs, initially negative unit economics, and massive scale requirements to reach profitability.</a> But developing an in-house lending business requires unique capabilities, access to capital, and years of data to build robust underwriting models. Embedded lenders like Dinie split the infrastructure costs across multiple partners, driving down unit costs with scale and providing access to these unique capabilities from day one.

<a href="/dinie-brazils-pioneer-api-first-embedded-lending-fintech-raises-usd-3-8-million-seed-round" target="_blank" rel="noopener noreferrer">Accion Venture Lab is proud to join Dinie</a> in its mission to help Brazilian MSMEs not only to survive, but to thrive during this challenging and pivotal moment in history. As impact investors, we work hard to promote financial inclusion. We’re excited to support a company that serves its clients in their own environment, understanding their needs and developing unique products to fulfill them.

Embedded finance meets small business lending in Latin America

R5’s innovative approach to offering affordable financial services helps more Colombians gain financial security

While the entrepreneurship and fintech scene has grown in Colombia in recent years, most adults there still don’t have a bank account. The lack of affordable, high-quality financial services has left many Colombians — especially those working in the informal sector — without a safety net for challenging times or a way to strengthen their financial health and seize new opportunities. The COVID-19 pandemic further exposed the vulnerabilities of Colombia’s financially underserved. Many people have lost their livelihoods and during lockdowns and economic struggles, and don’t have the financial services they need to stay resilient through challenging times.

[caption id="attachment_24561" align="alignleft" width="400"]<img class="wp-image-24561" src="https://content.accion.org/wp-content/uploads/2021/07/r5-client-nicolas-colombia.png" alt="Nicolas, a client of R5 in Colombia" width="400" height="348" /> <em>Nicolas Cairasco Parra, a civil engineer in Bogotá, relies on R5’s financial services to build financial stability in an uncertain time.</em>[/caption]

Twenty-five-year-old Nicolas Cairasco Parra was born and raised in Bogotá, Colombia. He’s a self-employed civil engineer who works as an independent contractor in both the public and private sectors in Bogotá. The COVID-19 pandemic disrupted nearly all industries in Colombia, and public infrastructure was no exception. “The pandemic has modified not all, but a significant part of my income. In the last year, my main challenge has been to generate an innovation in the services I was offering as a civil engineer,” said Nicolas. Before the pandemic, he made multiple in-person field visits while designing infrastructure projects, plus frequent one-on-one meetings with his clients throughout his contracts. “But clearly having to go virtual has brought a lot of challenges for continuing to offer civil engineering services virtually,” he says.

As an independent contractor, Nicolas doesn’t have the financial security that permanent employees enjoy. With some uncertainty in his career — and unexpected changes to his income because of the pandemic — Nicolas needed a solution to help build his financial health and gain some peace of mind. He started working with <a href="https://www.grupor5.com/" target="_blank" rel="noopener noreferrer">R5</a>, an Accion Venture Lab portfolio company, in December 2020. R5 aims to <a href="/fintech-makes-financial-stability-attainable-for-low-income-colombians" target="_blank" rel="noopener noreferrer">make financial stability attainable for lower-income Colombians</a> through innovative financial products and services offered through a digital platform.

Because traditional banks and financial providers often overlook low-income Colombians, R5 has focused on finding new ways to provide responsible funding and affordable financial products. Through asset-backed loans and online insurance products, they’re allowing people to leverage cars and motorcycles as collateral so they can extend affordable loans to customers who might otherwise turn to costly credit cards or informal lenders to make ends meet.

Nicolas had difficulty finding providers that would extend loan products to independent contractors like him, saying, “Financial institutions restrict many products [because] I work as an independent professional. Usually, financial institutions classify one as higher risk, but R5 had an alternative. Having this [product] in the middle of the pandemic was great,” says Nicolas. “The majority of companies offer a product where they make you a loan with a vehicle pledge, but the vehicle is consigned. The car is parked in a parking lot under their disposition and surveillance. The vehicle is locked. But with R5, it has been a very good experience because finally, my vehicle is at my entire disposal in Colombia.” R5 also offers vehicle insurance through a seamless digital process that uses a unique machine learning risk model to offer low-income clients better coverage at a lower price.

Nicolas hopes that accessible financial services can pave the way for other young Colombians to seize new opportunities, like starting their own businesses and finding employment. “I hope that this pandemic allows for innovation and finding new alternatives that will give room to new investments. For example, creating a business requires starting capital and there’s nothing better than being able to count on loans that have accessible rates. This also gives you security and inner peace, allowing you to perform better.” With their accessible and affordable loan and insurance products, R5 is helping build more Colombians get what they need to improve their financial health, secure safety nets, and build better futures.

A safety net helps Colombians through unstable times

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

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

Debdoot Banerjee

Elizabeth Winters

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

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

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