Dear Friends,

The world’s working poor are uniquely vulnerable to the COVID-19 pandemic. Typically, they live day-to-day, earning barely enough money to buy food for their families. They lack a safe place to save, or the means to protect themselves from financial ruin brought by a sudden illness or emergency. The pandemic has spurred real hardship and growing unease about the future.

The decades of progress we have made in reducing global poverty and expanding financial inclusion are at great risk. Accion’s work is more urgent and important than ever.

To protect the progress we’ve made, we must help people adapt to unprecedented challenges.

By building a financially inclusive world, we open doors to safety and opportunity for the three billion people who are left out of or poorly served by the global financial system. Basic financial services like credit, savings, and insurance are critical to helping the underserved cope with the harsh effects of the pandemic on the economy, businesses, and families. Accion is helping financial service providers expand access to these services and weather severe economic challenges by making investments, offering advice, and influencing the industry at large. In turn, we help microenterprises around the world continue to operate and sustain local economies.

Digital technology is key to advance this mission, especially as lockdowns and social distancing may continue for some time. Leveraging our many years of expertise, Accion is working to accelerate digital transformation among businesses and financial service providers and help them stay connected to their clients.

To protect the progress we’ve made, we must help our clients and their financial service providers adapt to unprecedented challenges. We are proud of how Accion has risen to this challenge, and we appreciate all your support that makes our work possible. Thank you.

Best,

Michael Schlein and Diana Taylor

As 2019 came to an end, the outbreak of COVID-19 was just beginning. The pandemic has taken a devastating toll on the lives and livelihoods of low-income people and small businesses around the world. These populations are uniquely vulnerable—often relying on daily in-person interactions to get paid or buy food for their families, which often can’t happen during lockdowns. They often lack a safe place to save money or the means to protect themselves from financial ruin brought by a sudden illness. Small businesses around the world also face a potentially prolonged economic downturn with limited access to financing.

As the crisis unfolded, Accion immediately focused on supporting the resilience of our partners and the resilience of their clients. We leveraged our global insight and experience with digital transformation to help our partners safely maintain operations and aided their responses to ensure the safety of their staff, clients, and communities. We aggregated resources and shared lessons to help partners around the world prepare for unique and evolving challenges. We continue to explore connecting our partners with emergency funding and support as they face short- and long-term challenges related to the crisis.

Accion’s work to build inclusive, resilient communities through access to quality financial services is more critical than ever. Ultimately, we seek to transform this monumental test into an opportunity to build resilience against any challenges that may arise in the future.

In 2019, Accion connected people and businesses with the financial tools they need to manage their daily lives in difficult times and prepare for the future. In an era of economic disruption and uncertainty, these tools are critical to helping the underserved build resilience against emergencies and financial shocks.

• Advise: We provided strategic guidance and technical assistance for financial service providers and fintechs reaching underserved and vulnerable populations. We offered specialized oversight through board governance.
• Invest: Accion’s support helped companies test new models and create new ways to meet the financial needs of the underserved, even as reaching these populations became more difficult—and more urgent.
• Influence: Our research and insights pushed the industry to better serve, protect, and empower clients facing a surge of unprecedented challenges.

By combining these elements, Accion supported underserved families and businesses facing unprecedented challenges—as well as the financial service providers striving to help them. Accion’s Global Advisory Solutions team helped its partners quickly leverage new technologies to overcome challenges, ensure quality services, and lower the cost of providing financial services at scale, helping more people benefit from the security offered by the formal financial sector. Seven partners around the world have now joined our ongoing project with the Mastercard Center for Inclusive Growth, which seeks to drive the digital transformation of millions of microbusinesses and the financial institutions that serve them.

Accion Global Investments supported inclusive, well-managed, and scalable organizations around the world amid widespread uncertainty and shifting business conditions. This team helped inclusive financial service providers around the world, like Dvara KGFS in India, strive to reach and cater to underserved populations. With 276 branches and more than 1 million enrolled customers, Dvara has brought financial services to rural clients across Chhattisgarh, Jharkhand, Karnataka, Odisha, Tamil Nadu, and Uttarakhand. Dvara also secured a new round of funding in 2019 that will enable it to pursue expansion into new places, strengthen its presence in existing places, and enhance its digital architecture to provide more customer-centric services in rural India.

Accion Venture Lab continued investing in and supporting innovative fintech startups that improve access, quality, and affordability of financial services for the underserved. Venture Lab added $33 million to its initial capital pool with the launch of a new $23M fund and an additional, separate $10M investment from Accion. The new fund brings together a group of third-party impact and commercial investors that share Venture Lab’s commitment to innovative fintech startups that leverage technology to increase the reach, quality, and affordability of financial services for the underserved at scale.

Accion continues to leverage a strategic partnership with Quona Capital, a venture capital firm that invests in growth-stage fintech companies in emerging markets, to develop the financial inclusion ecosystem around the world. For example, with support from Venture Lab and Quona, Konfio has become a leading small business lender in Mexico by using alternative data to better understand applicant behavior. Konfio started by offering unsecured loans to small businesses and now a offers a credit card, financial education, and insurance products to underserved clients.

Each Accion team continued pursuing opportunities with the greatest potential to create a financially inclusive world:

The challenges facing financial inclusion due to the COVID-19 pandemic are unprecedented. With the new leadership of Managing Director Mayada El-Zoghbi, the Center for Financial Inclusion (CFI), an independent think tank at Accion, continues to produce data-driven insights that support the decision-making of key stakeholders in the inclusive finance sector. In 2019, CFI produced research, advocated for clients, and collaborated with stakeholders to help vulnerable households, businesses, and financial service providers recover from the crisis and build resilience. The foundations laid in 2019 enabled CFI to rapidly respond to the emerging COVID-19 pandemic both within its own research agenda and as a convening organization for the sector.

Gregoria Chile | La Paz, Bolivia | BancoSol client

Financing from BancoSol helped Gregoria Chile grow and sustain her leather goods shop in La Paz, Bolivia. But it also her build a build a better life. “I‌ ‌started‌ ‌to‌ ‌work‌ ‌in‌ ‌the‌ ‌business‌ ‌after‌ ‌high‌ ‌school,” she says. “‌I‌ ‌also‌ ‌went‌ ‌to‌ ‌study,‌ ‌but‌ ‌I‌ ‌saw‌ ‌how‌ ‌much‌ ‌my‌ ‌mother‌ ‌was‌ ‌suffering‌ ‌economically.‌ ‌That‌ ‌was‌ ‌when‌ ‌I‌ ‌dedicated‌ ‌myself‌ ‌more‌ ‌to‌ ‌the‌ ‌business.”

Gregoria runs the business by herself, but her family counts on the income from her leather goods to eat, buy clothes, pay bills, and more. “‌BancoSol‌ ‌has‌ ‌helped‌ ‌contribute‌ ‌to‌ ‌the‌ ‌quality‌ ‌of‌ ‌life‌ ‌of‌ ‌my‌ ‌whole‌ ‌family,” says Gregoria. “‌With‌ ‌the‌ ‌loan‌ ‌that‌ ‌I‌ ‌took‌ ‌out‌ ‌I‌ ‌was‌ ‌able‌ ‌to‌ ‌buy‌ ‌materials‌ ‌and‌ ‌machinery,‌ ‌which‌ ‌enable‌ ‌me‌ ‌to‌ ‌start‌ ‌working.”

Before the pandemic, many of BancoSol’s customers like Gregoria preferred to visit branches in person rather than use digital banking services. To bridge the digital divide, BancoSol quickly increased phone-based and social media support for those that need help managing their money digitally. These efforts have proven vital to keeping customers connected to supportive financial services in very uncertain and challenging times.

Gregoria views BancoSol as a friend who supported her when many others would not. “I’m‌ ‌thankful‌ ‌for‌ ‌BancoSol‌ ‌because‌ ‌they‌ ‌trusted‌ ‌me‌ ‌even‌ ‌though‌ ‌they‌ ‌saw‌ ‌that‌ ‌I‌ ‌didn’t‌ ‌have‌ ‌much‌ ‌capital‌ ‌or‌ ‌machinery,” she says. “‌They‌ ‌offered‌ ‌to‌ ‌give‌ ‌me‌ ‌that‌ ‌credit‌ ‌to‌ ‌grow‌ ‌my‌ ‌business.‌ ‌Thank‌ ‌you,‌ ‌BancoSol.”

Laal Kumari Singh | Raipur, India | Sub-K client

For people like Laal KumariSingh who live and work in rural India, accessing financial services can be a major challenge. Major bank branches are often located far away and getting approved for a loan raises its own hurdles. Rather than asking for people like Laal to travel, Accion partner Sub-K is bringing banking to underserved people through inclusive, digital-enabled financial services.

Sub-K, which means “for everyone” in Hindi, relies on an agent-assisted model that has helped reach millions of underserved people in India. Sub-K operates throughout India in 25 states with more than 100 cobranded branches and 13,000 agents — typically “mom and pop” shops or “kirana” stores. They’ve partnered with 10 banks to serve close to 4 million clients, and currently support 609,000 active borrowers with a portfolio of over $180m.

Sub-K, supported by Accion Global Investments and Accion Global Advisory Solutions, has also joined a partnership between Accion and the Mastercard Center for Inclusive Growth to expand access to the digital economy. Its services are vital for underserved populations to build a financially healthy and resilient future.

The credit provided by Sub-K allowed Laal to grow her cattle rearing business. “Before, I had 5 to 10 cattle, but today I have almost 30 to 40 of them,” she explains. “And the milk productivity surely has gone up. Today I now ship 30 to 40 liters of milk per day. That’s how my productivity has increased.”

Laal’s income helps support a family of five: 2 boys, one girl, and a husband. “Because I have more disposable income, I can contribute more to my children’s education,” she says. She also used income to purchase a shop in a neighboring town in Burundi. “Our family’s life has improved because now we have some kind of financial security.”

Laal plans to rely on Sub-K to expand her business and buy more and more cattle and buffalo. She doesn’t have specific plans for her family in the future, but she says, “whatever I earn, I will use it to help my family.”

Melissa Villanueva is a visionary small business leader on a mission “to create and empower authentic community spaces through coffee.” As the owner and CEO of Brewpoint Coffee in the suburbs of Chicago, Illinois, Melissa has led her business to success since she founded it with her husband in 2014.

Melissa Villanueva | Chicago | Accion in the U.S. client

Before starting Brewpoint, Melissa was unhappy at her corporate job. So she decided to quit and buy a coffee shop. Melissa explained that she embarked on this new venture “having the mentality that we need to get better every day, learn as we go, and be as engaged as possible.”

Melissa’s leadership has grown Brewpoint to three locations in less than five years. In looking to open the third shop, Melissa found that traditional banks were not able to provide the capital she needed. She came to Accion and received a loan to help remodel the location. Since then, Melissa has become an integral part of Accion’s community in Chicago, participating in Accion’s Neighborhood Entrepreneurship Lab Program and serving as a coach for other entrepreneurs.

Melissa is dedicated to her community in Elmhurst, Illinois and employs dozens of people from the area. As the COVID pandemic took hold in early 2020, her dedication grew even stronger. In addition to setting up a fund to support her employees, Melissa created an initiative that gives gourmet coffee to healthcare workers and also partnered with a local foundation to provide coffeeshop gift cards to local teachers. All of this community engagement came alongside innovative, digitially-enabled changes to Brewpoint’s business model that allowed the company to stay viable during a stay-at-home order.

It’s clear that Melissa’s original mentality has served Brewpoint Coffee well during both its growth and during the COVID crisis: she and her business have improved every day, learned along the way, and been incredibly engaged in her community.

In the United States, for more than 25 years, Accion has created economic opportunity by supporting small business owners with the capital, networks, and resources they need to grow healthy enterprises and contribute to thriving local economies. We empower women, minority, immigrant, and other under-served small business owners with microloans to help them start or grow their business. Working closely with local and national partners across the country, we also support entrepreneurs with one-on-one business advising, opportunities to grow their network, and digital educational resources to fuel their success.

In early 2020, Accion’s efforts to help small business owners in the U.S. were bolstered by a strategic organizational combination between the Accion U.S. Network and Opportunity Fund, the country’s largest non-profit small business lender. The new combined organization, Accion Opportunity Fund, plans to spearhead the development of a national microlending strategy to meet the credit needs of small businesses—developing new products, establishing new partnerships, promoting research and financial education, and leveraging digital technologies and data analytics to support mission-driven lending.

In response to the COVID-19 crisis, in early 2020, Accion Opportunity Fund launched a small business relief fund with a goal of raising $50 million to reach the most vulnerable entrepreneurs, especially women, people of color, and immigrants, with loan payment relief, access to affordable capital, and educational resources on a range of business topics to help them navigate challenges during the crisis.

Accion is grateful to its U.S. partners, including the Boston Beer Company, Capital One, the Coca-Cola Foundation, Discover, FedEx, the Fidelity Foundation, Fifth Third Bank, JPMorgan Chase, the W.K. Kellogg Foundation, the Mastercard Center for Inclusive Growth, the MetLife Foundation, the Travelers Foundation, and the Walmart Foundation.

With your help, we will work to build a financially inclusive world—where every individual has access to high-quality, affordable financial services to help them weather economic downturns and reach their full potential. There are many ways to give.

Accion’s most recent audited financial statements are available here.

You can view Accion’s Board of Directors here.