Accion’s advisory services, targeted coaching, support, and governance help financial service providers deliver the high-quality, affordable financial tools and services that create a world with economic opportunity for all.
In 2017, Accion continued working with organizations ranging in size and maturity, from pre-seed startups trying to launch a product — all the way up to growth-stage industry leaders attempting to integrate new technologies.
Accion Venture Lab helped its portfolio companies overcome the challenges that inclusive fintechs regularly face in emerging markets, including customer acquisition and segmentation, expansion planning, cost optimization, channel strategy, human resource planning, and guidance on fundraising.
By addressing these issues, we create well-run, mission-driven, and efficient organizations that achieve scale, impact, and returns. Venture Lab recently traveled to Kenya to help Apollo Agriculture support more smallholder farmers. Apollo uses satellite imagery, data science, and mobile money to help Kenya’s farmers get the fertilizer, seeds, and help they need efficiently and affordably; Venture Lab spoke with Apollo team members and 80 local farmers to help the startup clarify how it can provide the most value to its customers, set an appropriate pricing strategy, and develop a more effective repayment plan. By drawing on our conversations with these farmers and behavioral sciences best practices, we can help Apollo grow along with its clients.
Our Global Advisory Solutions team helps established financial service providers develop customer-centric, data-driven, and tech-enabled solutions. By focusing on key areas – including customer strategy, digital channels, and business process optimization – we help maximize financial service providers’ impact.
In 2017, with the support from the Metlife Foundation, Accion launched a three-year initiative to support financial service providers across Latin America, Eastern Europe, and Asia design tools and services informed by human-centered design, incorporate principles that spur usage, and use data to continually refine their products. We also shared our insights in how innovations in digital lending can offer better financial products to more underserved clients better, faster, and cheaper than before; this research will help others benefit from our experience and catalyze innovation around the world.
Accion makes equity and quasi-equity investments in companies that expand, improve, and accelerate financial inclusion around the globe. By supporting inclusive financial service providers ranging in size and maturity – from pre-seed to growth-stage – we provide the resources and insights needed to reach scale and help the billions of people left out of the formal financial sector.
In 2017, Accion made strategic investments in established financial service providers to help address a global need. For instance, nearly half of India’s rural adults lack access to financial services. Accion’s recent partnership with India’s Sub-K will bring more savings, payments, and credit to rural communities across the country. As India shifts from cash to digital financial services, we’ll continue to help it expand to reach more clients by on improving its technology, optimizing its use of data analytics tools, and launching innovative financial products.
Accion also began work in Mozambique, where nearly 60 percent of adults lack access to formal financial services; Mozambique also has one of the largest gender gaps in terms of access to financial services. We can help address these issues through our work with Socremo Microfinance Bank, Mozambique’s leading micro, small, and medium enterprise banker. Socremo already provides more than 43,000 clients with individual lending products, deposits, and insurance; we’ll help the bank integrate a digital strategy that will extend more financial services to more clients; those clients will be able to manage their business from their mobile phones. By helping Socremo grow, we’ll help more of its clients and create a demonstration model that will encourage others to provide inclusive financial services throughout the country.
Accion Venture Lab provides support to innovative fintech startups that improve access, quality, and affordability of financial services for the underserved at scale.
This work matters because ensuring that the ongoing digital transformation of financial services benefits the world’s underserved is difficult: to drive inclusion, digital financial services must overcome core entrepreneurial challenges, put clients’ needs first, create high-quality products and affordable services, reduce operational expenses for providers, and demonstrate that they can scale to meet global need.
Venture Lab helps innovators overcome those issues and create thriving companies that help the financially underserved. Some of Venture Lab’s recent investments in inclusive fintech startups include:
- Lidya ensures that Nigeria’s small businesses can access working capital and build credit. The startup works with large enterprises in Nigeria to market its invoicing tool to small and medium enterprises; the tool captures data, ‘pre-qualifies’ borrowers, and originates loans quickly and inexpensively.
- Self Lender’s loan solution helps U.S. consumers both build credit and save money: over the course of a year, clients repay a loan they take out through Self Lender to purchase a Certificate of Deposit (CD). As they repay the loan, customers build their credit scores and their CD savings.
- Tienda Pago helps mom-and-pop stores in Peru and Mexico build and use credit to purchase inventory and restock their shelves, all while reducing their reliance on cash. Using a digital approach, Tienda Pago partners with major fast-moving consumer good distributors to provide flexible, affordable financing for Latin America’s small businesses.
In 2017, we launched Company Builder, a program that recruits a diverse pool of talented future entrepreneurs to create innovative fintech startups that will increase access to, improve the quality of, or reduce the cost of financial services for underbanked consumers.
Venture Lab partnered with FMO, the Dutch Development Bank, and Quona Capital to host the CEO Forum and Fintech for Inclusion Global Summit 2017. The events brought together more than 240 portfolio company CEOs, bankers, venture capitalists, and senior representatives from the financial inclusion and impact investing communities to discuss the challenges that emerging fintech CEOs face, ways to overcome them, and emerging technologies with real potential to drive financial inclusion.
Accion also serves as the anchor investor, general partner of the Accion Frontier Inclusion Fund, a global fintech fund for the underserved. Managed by Quona Capital, the Fund invests in companies that innovate to expand access to financial services to underserved consumers and businesses in emerging markets.
The Center for Financial Inclusion at Accion (CFI) engage and challenge the industry to better serve, protect and empower clients. It develops insights, advocates on behalf of clients, and collaborates with stakeholders to achieve a comprehensive vision for financial inclusion. CFI is dedicated to enabling the world’s three billion financially underserved people.
CFI’s research agenda mobilizes stakeholders to advance inclusive finance, benefit customers, and respect providers’ needs. CFI’s research prioritizes client protection, good governance, and responsible investment practices for financial institutions serving low-income consumers. Some of CFI’s research highlights from the last year include:
- Financial Inclusion Hype vs. Reality: Although the global financial sector added 515 million new accounts from 2014 to 2017, in that time, savings has declined, credit is flat, and it’s harder for families to come up with roughly one month’s salary following an emergency. These sobering results underscore the need for high-quality financial products that benefit users.
- “Tiny Loans, Big Questions”: Using the Smart Campaign’s Client Protection Principles as an organizing framework, this research explores consumer protection risks associated with ‘nano’ loans. The Campaign hopes this research will help the mobile financial services industry anticipate and take steps to prevent those risks by adopting responsible digital lending practices.
- “Uniting Tech and Touch” helps financial service providers and the financial inclusion community combine the best of tech and touch to catalyze inclusive finance. By tracking customer journeys of digital financial services users in Kenya, CFI’s research identifies when human interactions can deliver the most value to customers and promote both acquisition and retention.
- “Inclusive Insurance.” The total addressable market of uninsured adults stands at 3.8 billion. To help financial institutions identify viable paths to working with lower-income customers, CFI and the Institute of International Finance explored how advances in inclusive insurance can help protect the world’s most vulnerable people.
CFI’s work with industry groups helped to set the broader financial inclusion agenda. CFI’s partnership with the Financial Inclusion Equity Council produced new research on responsibly exiting from investments in microfinance institutions; the use of offshore financial centers to pay or minimize taxes when investing in low-income countries; and valuation methodologies for appraising microfinance institutions.
As members of the Partnership for Responsible Financial Inclusion (PRFI), Accion and CFI both work with peer organizations to accelerate financial inclusion by leveraging members’ expertise. PRFI programming included a webinar on inclusive digital financial services as part of CFI Financial Inclusion Week, with 84 attendees.
The Smart Campaign, a signature CFI initiative, works to help organizations around the world deliver financial services safely and responsibly to low-income clients. Today, the Smart Campaign has reached more than 100 certifications, a landmark achievement in consumer protection. More than 43 million people are protected at Smart-certified institutions.
CFI’s Africa Board Fellowship (ABF) is a peer-learning and exchange program for CEOs and board members of sub-Saharan financial institutions. ABF is creating the next generation of financial inclusion leaders on the continent. More than 160 ABF fellows representing 56 financial institutions from 17 countries have graduated with new mastery in governance, risk management, and disruptive technology. ABF graduates were also admitted to the Harvard Business School – Accion Program on Strategic Leadership in Inclusive Finance. Now in its 13th year, more than 800 financial inclusion leaders from almost 100 countries have participated in the program.
During Financial Inclusion Week 2017, we discussed “New Products, New Partnerships, New Potential.” With 62 partner organizations worldwide, we highlighted how new product innovation and partnerships can catalyze progress. CFI is grateful to AXA for sponsoring the week.