We’re enabling social change
In 2017, Accion continued to make impact investments, advise on strategic and technical challenges, and influence the broader industry to create a financially inclusive world. Our work helps families and businesses reach their economic potential and build better lives.
A letter from our CEO and Board Chair
Thank you. Because of your support for Accion and your belief in the power of financial inclusion, parents saved for their children’s college tuition in Colombia; farmers grew larger, healthier crops in Kenya; and businesses received the credit they need to expand across India’s rural communities.
Those are just some of the highlights from the last year. Accion and our portfolio companies have continued helping people, small businesses, and communities grow and thrive. With digital technology causing massive changes in financial services, we are focused on ensuring that the sector is transformed in a way that works for everyone.
Over the last year, we continued to find, fund, and grow portfolio partners that create new ways to empower the underserved. And we kept challenging and engaging the industry, its leaders, and its regulators to create a financially inclusive world.
We’re proud to share some of the highlights from the last year with you here; these stories and pictures remind us of the ways that we can build a world of economic opportunity for all, where everyone can access, use, and benefit from a full range of high quality, affordable financial services.
We couldn’t have done any of this without you. As we celebrate what we’ve achieved and plan our next steps, we and the countless people who we serve thank you for helping to build a financially inclusive world.
Thank you for helping us pursue this essential, transformative work.
Our reach is global
We’ve helped more than 110 of our partners reach tens of millions of families and entrepreneurs through innovative products and efficient growth
We’re the industry leader in fostering innovation through investment and support for fintech startups and best practices dissemination
The Smart Campaign has certified over 100 financial institutions serving low income clients in 38 countries
“The journey is so good and so sweet.”
Every step in Ayodele Magret O’s entrepreneurial journey has been marked by learning — learning how to manage her finances as a small business owner, learning how to network and build her business’ reputation, and using her success to give her three children a chance to learn as much as they can in school.
Ayodele owns a bookstore in Lagos, Nigeria. She started out by buying and selling just a few books; now her business is thriving. Along the way, she’s taken out loans from Accion Microfinance Bank, a leading provider of financial services to microentrepreneurs and low- income earners in Nigeria to acquire new inventory and manage income flows.
Accion was a founding investor in Accion Microfinance Bank; our team initially managed the bank as it was getting started, and we’ve continued to support its growth over the last decade. Today, we’re helping Accion Microfinance bank integrate a digital transformation strategy that will help it to reach more small business owners just like Ayodele and provide them with the tools they need to thrive: nearly 70 percent of the bank’s customers are women, and having access to financial services helps them control their personal finances, support their families, remain resilient, and become more autonomous.
The financial support that helped Ayodele grow her business also helped fund her children’s education. From her oldest son, who’s attending college in Canada, to her youngest daughter, who’s just begun to learn at a private primary school, Ayodele’s children are making their mother proud.
Ayodele’s next plan is to build a house for her family. That way, no matter how far her kids go in life, they’ll always be able to return home — and to the mother who made it all possible.
“Now I’m safe and secure.”
Vanaja Kumar’s world nearly came apart when she lost her husband three years ago. But instead of giving up, she remained resilient.
After her loss, Vanaja poured her energy into raising her two children and running the family business in Bengaluru. Every day, Vanaja worked long hours managing the manufacturing and industrial products supplier that she and her husband had established.
Though she worked almost constantly, she struggled to get ahead and support her family without adequate machines. On top of that, the long days at work kept her from her family.
Then Vanaja turned to Accion portfolio partner AYE Finance. AYE supports entrepreneurs throughout India with the funds they need to run, improve, or expand their small businesses. AYE provided Vanaja with enough capital to purchase three new, more efficient machines. These new machines have helped her do more in the day, get ahead, and have given her back what matters most: more time with her family.
Supporting Accion helped us improve AYE and reach more clients like Vanaja. Recently, Accion helped AYE design and develop a mobile application that provides its customers with business management tools. These tools help AYE’s clients operate more efficiently by recording sales and purchase transactions electronically. Doing so helps AYE’s clients create a better-defined ‘digital footprint’ that AYE can use to provide its clients with a better, broader range of personalized services.
“I love being able to create jobs.”
Pedro Obando began welding when he was 18 years old, and it’s been a passion for him for the last thirty years. “For me, welding is not a job. Welding is creativity and innovation.”
When he began his business, Oba Steel Fabricating, he saw it as a way to build a better future for his wife and three daughters. Soon, he discovered that he could make an even wider impact: “I love being able to create jobs,” he said. He used a loan from Accion in the U.S. to purchase a forklift, which increased his capacity to serve more clients, grow his business, and hire more people.
It’s because of small businesses like Pedro’s that makes Accion in the U.S. so important: in 2017, Accion in the U.S. disbursed 3,162 loans totaling more than $39 million. This investment in America’s businesses helped create or maintain more than 10,000. Accion in the U.S. also provided more than 20,000 entrepreneurs with the advisory services they need to create better businesses. Accion in the U.S. represents a nationwide network of mission-based lenders combining deep local knowledge with cutting-edge lending solutions.
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.
Accion in the U.S.
Accion in the U.S. creates economic opportunity by partnering with small business owners to provide access to capital and the business support they need to create and grow healthy enterprises, while contributing to thriving local economies. We are a nationwide network of mission-based lenders combining deep local knowledge with cutting-edge lending solutions and unmatched personalized advising to fuel growth in underserved communities across the U.S.
New Ways to Evaluate Progress: From Access to Outcomes to Impact
With support from organizations like the Aspen Institute, Accion in the U.S. has developed a new framework for assessing how access to financial services provide individuals with greater stability and improved quality of life. Today, Accion tracks business survival, revenue growth, and job creation. These efforts helped reveal the broad outcomes its work creates.
Accion also developed a more holistic way to share the impact that it makes in clients’ lives in a disciplined and academically rigorous way. Working with fellow mission-based lender Opportunity Fund, Accion launched a longitudinal, mixed-methods study of its services’ nationwide effects. This research, conducted by Harder+Company Community Research between 2015 and 2017, was made possible through lead funding from the W.K. Kellogg Foundation and JPMorgan Chase & Co., with additional support from S&P Global.
The results of this research reveal that the entrepreneurs we serve are thriving, even two to three years after receiving a loan:
- 94 percent of the businesses served remained open at the end of the study period, and most increased sales (60 percent) and profit (57 percent) in the previous six months.
- 40 percent of borrowers added employees during the study period, and entrepreneurs with employees significantly increased benefits provided to those employees.
- Participants reported improvements in measures of financial health, including increased business and personal savings, improved financial tracking, and better preparation for financial emergencies.
- That stability translated to statistically significant improvements in emotional health, including a 13 percent reduction in finance-related stress and an 8 percent increase in sense of financial control.
The majority of surveyed clients specifically attribute progress toward their business and personal goals to the services they received from Accion. They emphasized that the greatest impact our services made was on their confidence: 63 percent of participants reported that their lender’s support made “a lot” of positive impact.
We’ve never been able to assess how our work affects entrepreneurs’ confidence and financial stability until now. These new measurements illuminate the crucial role that Accion’s services play in the broader small business ecosystem. Confident, resilient entrepreneurs may take advantage of additional resources and market opportunities that in turn enable them to grow their businesses, provide meaningful employment opportunities for their neighbors, and build a better future for their children. This is fundamentally important to building strong communities and a strong society.
Your support is powerful
Your support provides the funding that allows us to sustain our work developing new products, markets, and policies.
Philanthropy supports everything that we do. With your help, we will build a financially inclusive world for this generation – where every individual has access to high-quality, affordable financial services and economic potential.
We thank you for supporting our work and we ask you to continue helping us build a financially inclusive world.
Accion’s audited 2017 financial statement is available here.
Board of Directors
You can view Accion’s Board of Directors here.