Cover image: As a farmer, Rose Kilonzo knows that a good harvest isn’t a given. With farming advice and insurance from our partner Pula in Kenya, she has been able to optimize her crop yield.
Cover image: As a farmer, Rose Kilonzo knows that a good harvest isn’t a given. With farming advice and insurance from our partner Pula in Kenya, she has been able to optimize her crop yield.
As we enter a new decade marked by a global crisis, our mission to reach underserved people and small businesses is more important than ever. We are working to ensure that more people can safely save money, build a business, or protect themselves in the event of a financial shock or emergency.
Accion works to empower people, small businesses, and communities who often lack the tools they need to access new opportunities and succeed. We find, fund, and grow companies creating new ways to meet the financial needs of the underserved—even as reaching these populations becomes more difficult and more urgent. We protect clients and encourage the industry to do the same. We work with partners around the world who believe in the importance of creating a financially inclusive world.
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.
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.
BancoSol is an established microfinance bank in Bolivia and a partner in Mastercard and Accion’s shared effort to expand access to the digital economy. As lockdowns began, BancoSol took swift action to move to digital tools to serve clients who typically rely on daily human interactions at brick-and-mortar branches. Even though BancoSol’s clients use SMS and WhatsApp regularly, most have generally found digital financial services challenging, primarily from a cultural point of view. To help build trust and comfort in self-service apps, BancoSol increased phone-based support for clients to help set up digital accounts and met clients through online tutorials on social media platforms. In addition, BancoSol decided to redesign and launch a more user-friendly mobile banking app. More work is being done to implement gamification concepts in the apps to increase adoption and comfort.
In India, Accion Venture Lab partner Toffee Insurance answered a surge of need by introducing new products to help underinsured people build financial resilience to the impact of COVID-19 and unexpected emergencies that may arise in the future. Toffee has successfully reached India’s uninsured by offering simple, specific policies covering risks that are most relevant to consumers, like dengue, malaria, bicycle damage, and theft.
Apollo Agriculture, an Accion Venture Lab company, helps Kenya’s farmers maximize their profits with a bundle of financing, farming products, optimized advice, and insurance. Amid the disruptions of COVID-19, food security remains essential, and farmers continued working to meet high demand. Likewise, Apollo saw need for their products increase even while the pandemic upended normal business conditions. Apollo’s tech-enabled business model enabled them to continue providing high-quality farm products and financing throughout the pandemic, supporting farmers as they produce the food their communities will need in the months to come.
With support from Accion Venture Lab, Pintek aims to democratize access to education in Indonesia through affordable and flexible credit for schools and students. Pintek partnered with an edtech platform to help Indonesian schools develop their online learning capabilities during the pandemic. Pintek is in active conversations with their customers, sending out surveys to understand their needs and how Pintek can assist. Pintek embraced this challenge as an opportunity to improve internal systems and upgrade technology within schools.
Before the crisis, nearly 100 million Americans had “thin” or damaged credit files, meaning they lack credit history because they are newer to using credit or have very low credit scores due to debt or other personal circumstances. Self, a US fintech supported by Accion Venture Lab, is helping these people when building financial health is more challenging and urgent than ever. Self’s credit-builder loans—accessible through an app—deposit client’s repayment installments into a savings account. If clients make payments on time, this boosts the client’s credit scores. When loans are repaid, clients may access their savings account for urgent needs or any future needs, as well as to open a secured credit card, helping consumers further build credit.
Uganda hosts almost 1.4 million refugees from neighboring countries. These diverse populations are already extremely vulnerable, and COVID-19 only threatens new hardships. With support from Accion Global Investments and Accion Global Advisory Solutions, UGAFODE Microfinance Limited launched a digital program in 2019 to serve those fleeing conflict to Uganda. UGAFODE is also the first financial institution in Uganda to open a branch inside a refugee settlement. UGAFODE offers digital wallets that allow clients to save and pay bills without visiting a physical branch location. In addition to providing financial services for refugees, UGAFODE also creates jobs, as some of its staff are from the refugee community.
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.
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:
With support from FedEx, Accion Global Advisory Solutions piloted Ovante, a digital platform that aims to strengthen the management, financial, and digital capabilities of microentrepreneurs in Colombia. To date, it has reached 15,000 microentrepreneurs—more than 80 percent of whom are women—ultimately supporting their livelihoods, families, and communities. Accion recently received a grant from FedEx to expand the platform. The expansion leverages Accion’s decades of experience providing financial skills training and education in Latin America and India, as well as principles of human centered design, to provide practical tools that incentivize behavior change and help microentrepreneurs thrive in a competitive and digital world. These additional funds will help roll out Ovante into other Latin American countries – beginning with Paraguay, El Salvador, Guatemala, and Ecuador, and the development of a similar platform in India.
Hosted by Accion Venture Lab, Quona Capital, and FMO, the Fintech for Inclusion Forum brought together the world’s most innovative fintech CEOs and company leaders in the Hague to learn from one another and discuss the future of financial inclusion. Sharing a common mission to bring new financial tools to people who need them, these CEOs discussed strategies to tackle a range of issues: hiring and developing talent, scaling new products, and developing a successful corporate culture.
The Inclusive Fintech 50 competition elevates promising early-stage fintechs driving financial inclusion and resilience around the globe. Founded by MetLife Foundation and Visa, with support from Accion and IFC, in its first year the initiative attracted eligible applications from 400 early-stage fintechs in 2019. Applicants were headquartered in 72 countries and shared a customer base of 69.8 million. The initiative boosts the visibility of these startups among investors and partners who can help them scale to reach more of the world’s 3 billion financially underserved people. Inclusive Fintech 50 also supports the broader inclusive fintech ecosystem by sharing valuable insights. The initiative has received additional funding from BlackRock, Jersey Overseas Aid, and Comic Relief.
In early 2020, Accion and Quona Capital launched the Accion Quona Inclusion Fund to invest in scalable technology companies that are expanding access to financial services for underserved consumers and small businesses across Latin America, Africa, India and Southeast Asia. A successor to the Accion Frontier Inclusion Fund, which launched in 2017, the Accion Quona Inclusion Fund closed in 2020 with $203 million in commitments from an array of investors—global asset managers, insurance companies, investment and commercial banks, as well as university endowments, foundations, family offices, and development finance institutions—to significantly exceed its $150 million target. The fund has invested in 9 inclusive fintech companies around the world as of this writing.
Many financial institutions in sub-Saharan Africa lose out on the opportunity to analyze data and improve their services for consumers due to information overload, inefficient processes, and outdated systems. To address this need for data expertise, Accion in partnership with Oxford Policy Management (OPM) and Master Data Management (MDM) launched the Data Management and Analytics Capabilities (DMAC) project. The two-year program worked with seven partner institutions to enhance their capabilities to manage and analyze data, develop and innovate new business models, and design inclusive and affordable financial products and services that meet the needs of unserved and underserved adults. Through this project, the DMAC team helped fintechs, banks, and insurance providers use data-driven evidence to develop new or enhanced products — including four digital microinsurance products and three savings products — that aim to reach over 1.2 million clients at scale.
Cofounded by Accion and still actively supported by Accion Global Advisory Solutions, Grassland Finance Limited provides credit and other financial services to China’s many small, rural enterprises. Accion worked with Grassland, which celebrated its 10th anniversary in 2019, to understand the needs and aspirations of Grassland’s clients and also assisted with efforts in improving the client experience and lending efficiency by designing and implementing credit scoring models. Grassland’s digitization efforts proved immensely valuable as the COVID-19 pandemic unfolded, allowing for Grassland to stay connected to clients through a mobile banking app and existing communications channels. Accion collected Grassland’s insights and shared lessons with other financial service providers confronting the pandemic around the world.
Operating in 25 states across India and currently serving close to 4 million clients, BASIX Sub-K provides a technology-enabled financial platform for India’s unbanked and underbanked populations. Supported by investments by Accion Global Investments and advisory support from Accion Global Advisory Solutions, Sub-K, which means “for everyone” in Hindi, offers affordable and accessible digital finance solutions including credit, savings, and payments. Sub-K partners with 10 banks nationwide through an agent-assisted model. Sub-K has also joined Accion’s partnership with the Mastercard Center for Inclusive Growth to expand small businesses’ ability to access and successfully participate in the digital economy. Embracing digital transformation enables Sub-K to reach even more clients by offering meaningful, customer segment-specific, value-added services such as business management tools in addition to a variety of financial products.
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.
Mayada El-Zoghbi became the new Managing Director of CFI in 2019. A leader in financial inclusion for more than 20 years, she came to CFI from CGAP, a think tank based in the World Bank, where she served as Lead for Strategy, Research & Development. Under El-Zoghbi’s leadership, CFI will seek to deepen its expertise and expand its influence through the production of data-driven research and analysis.
CFI has embarked on a strategic integration with MIX, a leading global data resource for socially responsible investors and businesses committed to financial inclusion. MIX has leveraged its expertise in data across fintech, digital financial services, and agricultural finance—developing common standards and language, providing clarity around complex data, and generating strategic insights to help these sectors flourish. The addition of MIX will strengthen CFI’s industry-leading influence and analysis with proven data expertise.
With support from the Mastercard Center for Inclusive Growth, CFI developed a framework for measuring the financial health of MSME entrepreneurs to better understand the determinants of financial health of entrepreneurs and help policymakers, financial and non-financial service providers, and researchers gain clarity around how they can best be supported. CFI is leveraging this framework to collect phone survey data on the impact of the COVID-19 pandemic on MSME clients across 5 countries: Colombia, India, Indonesia, Mexico, and Nigeria. This research will provide critical data on MSME performance and generate insights into the types of behaviors and products that correlate with better resilience during shocks.
As a leader in consumer protection, CFI published the “Handbook on Consumer Protection for Inclusive Finance” with updated and revised guidance for consumer financial protection regulators, organized around the Smart Campaign’s Client Protection Principles. CFI also led research in Rwanda to solicit input from low-income clients using digital financial services and assess the prevalence of consumer protection problems among these clients. The project served as a catalyst to improve client protection practices in ways that are grounded in client feedback. While governments, investors, and financial service providers rush to respond and mitigate the devastating impacts of COVID-19, CFI is helping to ensure that steps are taken to protect customers. Building on established expertise in this space, CFI is also continuing to explore emerging dimensions of consumer protection, including issues around data privacy, security, portability, and rights.
After running the Africa Board Fellows (ABF) program for five years, CFI closed ABF in 2019 and launched a new executive education program, Board Leadership for Impact (BLI). BLI dives deeper into digitization, serves a wider variety of institutions and has a global reach—while retaining the most valuable aspects of ABF: a strategic governance focus and peer-to-peer learning and exchange. Through BLI and other convening bodies housed at CFI, including FIEC and PRFI, CFI is playing a central role in advising both investors and boards in their responses to COVID-19. CFI will continue to conduct research on market needs, and work with stakeholders to guide effective responses.
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.”
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.
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.