Accion Global Advisory Solutions works with inclusive financial service providers globally to maximize their ability to serve low-income and vulnerable people. In 2021, as providers navigated the difficulties of the pandemic, we enabled them to embrace vital new technologies, boost their efficiency, and lower costs — providing a lifeline of financial support for families and small businesses who rely on them. We equipped our partners and other stakeholders with our insights and recommendations on effective digital transformation, and we have become a partner of choice for development financial institutions seeking to drive digital adoption in emerging markets.

Through our global partnership with the Mastercard Center for Inclusive Growth, our work has touched the lives of 9 million people, including 2 million micro and small businesses who actively used a digital product or service. We also worked with partners to develop better customer experiences and improved data capabilities.

Accion Global Investments supports established, frontline financial service providers as they serve individuals, families, and small businesses coping with persistent uncertainty and instability. In 2021, we worked to strengthen the financial position of partners working in markets experiencing the most severe effects of the pandemic, ensuring they could focus on answering the needs of vulnerable and hardworking clients. We collaborated with partners to anticipate cash flows and restructure payments to ease the payment burdens on clients and allow them more time to rebuild. We invested in the digital transformation of our partners, equipping them with the resources they need to embrace new digital tools, and guided their steps to adaptability and resilience.

One of these partners is BancoSol in Bolivia — the country’s largest microfinance provider with around one million clients. Bolivia experienced some of the world’s worst health and economic impacts of the pandemic. And, following the devastating loss of Kurt Koenigsfest, CEO of BancoSol and beloved friend to many, we stepped in to provide board governance and leadership as BancoSol sought and appointed a new executive team. With the support of Accion Global Advisory Solutions, BancoSol accelerated the rollout of new digital tools, including an improved mobile banking app and a gamification framework that has boosted digital adoption and customer engagement by rewarding users for saving money, making digital payments, and repaying loans on time. From 2019 to 2021, BancoSol increased digital customers by almost twofold and more than tripled the number of digital transactions. At year-end 2021, BancoSol serves 22,000 more clients than prior to the pandemic and retained 98 percent of clients by prioritizing solutions that help them cope with extreme disruptions to their livelihoods.

Accion Venture Lab is a leading global early-stage investor in inclusive fintech startups. Through Accion Venture Lab’s portfolio of innovative companies, we are expanding access to well-designed, affordable financial services that allow low-income individuals and small businesses around the world to grow and prosper. These companies are expanding the borders of our rapidly digitizing economy, applying new technologies and business models to meet clients where they are on their digital and financial journeys and enable more people to build their financial resilience.

In 2021, Accion Venture Lab worked with these companies to adapt and strengthen their go-to-market strategies during the pandemic to focus on meeting customers’ needs and empowering them with the tools of recovery and resilience. Through the leadership of new Managing Partner Amee Parbhoo, in 2021 Accion Venture Lab invested in nine fintech companies innovating for inclusion. These companies are working in many ways and in many markets to reach and uplift vulnerable clients: connecting agricultural retailers to the resources they need to support rural farmers, helping consumers purchase insurance from businesses they trust, equipping food trucks with digital payment capabilities, empowering mom-and-pop stores with inventory financing, and much more.

Our strategic partnership with Quona Capital, a venture capital firm that invests in growth-stage fintech companies in emerging markets, identifies the most powerful and promising innovations creating a more inclusive economy and financial system. The Accion Frontier Inclusion Fund, one of the world’s first global fintech funds for the underserved, and the Accion Quona Inclusion Fund have together raised more than $344 million for scalable fintech companies that are leveraging the power of digital technology to equip more people, families, and small businesses with the financial tools they need.

In 2021, Ula, a portfolio company of Accion Quona Inclusion Fund (managed by our partner Quona Capital), expanded its work to support small store owners across Southeast Asia, starting in Indonesia. Traditional banks usually overlook these small retailers, so Ula is leveraging tech and data to provide them with tailored and affordable products they need to grow their businesses, including a wholesale marketplace, delivery services, and working capital to purchase inventory. Ula’s recent expansion into new towns in Indonesia, along with business model innovations that add value to small store owners — such as pick-up services for perishables — is creating greater access to high-quality business and financial solutions for underserved entrepreneurs in Southeast Asia.

As more businesses and individuals go digital, more people are gaining access to critical financial services. But varying levels of digital and financial expertise among low-income people, as well as the evolving risks of digital business models, can limit the benefits of these tools. That’s why, with the support of MetLife Foundation, Accion partnered with five financial service providers in Mexico and Chile to design innovative financial products specifically geared to improve clients’ financial health—a win-win for both providers and their clients.

Through this partnership, Accion worked with RedCapital, a crowdfunding platform for micro and small businesses in Chile, to redesign their platform and digital customer experience to better serve microenterprises. Our work enabled enterprising clients like Daniela to build her financial resilience, featured in the video below:

In Southeast Asia, more than 70 percent of people don’t have access to bank accounts, and nearly two-thirds of small businesses lack access to formal financing. To build a more inclusive financial system in the region, Accion Venture Lab worked to strengthen and grow innovative fintech companies that are applying new technologies and business models to equip more people with the tools they need to thrive.

In Indonesia, Fairbanc enables inventory financing for small retail shops with a buy now, pay later product that is integrated in the ordering apps of inventory suppliers. We ensured Fairbanc had the support needed to build strong partnerships, leverage new technology, and successfully integrate with retail platforms. Fairbanc has increased access to financing for small merchants in Indonesia—70 percent of which are owned and managed by women.

Pintek, a specialized education lender, provides financing to small and medium-sized private schools and low-to-middle income families to improve access to education in Indonesia, where public education options are very competitive. We supported Pintek through the volatility of the pandemic so the company could expand access to their services and provide schools with the digital capabilities needed to continue teaching during the pandemic.

In the Philippines, Advance provides employees a way to bridge paychecks. People working blue collar jobs or entry-level positions often need to borrow money to cover unexpected expenses, so Advance provides a trustworthy alternative to more risky, informal options. Through strategic guidance and collaboration, we worked with Advance to place their customers’ financial health at the heart of their product offerings and their overall mission.

More than 65 percent of India’s 1.37 billion people live in rural areas, and many living in these remote locations have extremely limited access to digital and financial tools. Accion’s partner Dvara KGFS works to build the financial resilience of last-mile, low-income communities by providing complete access to financial services for individuals and small businesses in rural India. In 2021, Dvara joined Accion’s partnership with the Mastercard Center for Inclusive Growth to help small businesses operate in and benefit from the digital economy. Through this work, Accion enabled Dvara to leverage technology to boost efficiency and optimize customer experiences for its 486,000 clients. Only 45 percent of these clients have access to a smartphone, so Dvara has taken a hybrid approach that combines tech and touch components to reach more rural customers.

We’re also advancing the digital journey of Annapurna Finance, a frontline financial service provider that serves more than 2 million clients across India through a rural distribution network. With new digital capabilities, Annapurna can reach more clients, provide better customer support, improve the efficiency, and launch digital products that help microentrepreneurs stay in business. We helped Annapurna design and launch an emergency loan for small businesses, accessible through SMS texting, to help them quickly bounce back from the severe disruptions caused by the pandemic.

After navigating more than a year of economic crisis caused by the pandemic, many small business owners continued to struggle to make ends meet. They faced decreased sales, overwhelming debt, and depleted savings that made it difficult to continue serving customers and providing for their families. To equip entrepreneurs with the skills and knowledge they need to rebuild their resilience in the face of this crisis and future challenges, Accion Global Advisory Solutions launched a COVID-19 recovery toolkit through our edtech platform Ovante, which is available in English, Spanish, and Hindi. With funding from S&P Global Foundation, MetLife Foundation, and FedEx, we made the toolkit available at no cost. Through interactive learning modules, the toolkit addresses three primary concerns we’ve heard from small business owners: feeling confident about their finances, adapting their businesses to thrive, and taking their businesses into the digital age.

Technology is making it possible for Kenyan farmers to convert waste into a renewable energy source that sustains their businesses. Biodigesters take a widely-available resource to dairy and pig farmers – manure – and convert it to animal feed, fertilizer, and biogas that they can use for household and farm energy needs. But biodigesters can be expensive, putting them out of reach for many farmers in Kenya.

In 2021, Accion Global Advisory Solutions worked with Sistema.bio to pilot a biodigester rollout in Nakuru County in Kenya. Through this partnership, an initiative funded by Financial Sector Deepening Kenya, we sought to understand why biodigesters haven’t been widely adopted by smallholder farmers and discover ways to address the obstacles holding them back., like the cost of installation. Biodigesters can be expensive, putting them out of reach for many Kenyan farmers. Typically, equipment manufacturers such as Sistema.bio also offer financing options. To expand the pool of funding available to farmers, we explored partnerships with various types of financial institutions including a fintech, a commercial bank, a microfinance institution, and a cooperative to offer other avenues for extending financial support to farmers so that they can install biodigesters on their farms. With Accion’s support, Sistema.bio is now making these life-changing biodigesters accessible to farmers through small and flexible loans from their own books and with financial partners like Fortune SACCO.

Small businesses and families in Latin America experienced devastating health and economic impacts due to the global pandemic. And in Central America’s Northern Triangle, which spans El Salvador, Guatemala, and Honduras, a vicious combination of poverty and violence is driving mass migration to the United States.

In 2021, Accion responded to a call to action from U.S. Vice President Kamala Harris to create new economic opportunities in the Northern Triangle. As a founding member of the cross-sector Partnership for Central America, Accion committed to provide advice, guidance, and capacity building services to the financial institutions that are helping micro and small business owners in the region, ultimately benefitting more than 400,000 people. To drive progress on this goal, Accion is working to advance the digital transformation of our longtime partner Fundación Génesis Empresarial, Guatemala’s largest nonprofit microfinance provider with 217,000 clients. We are working with Génesis to drive adoption and usage of their digital financial services and to build the financial resilience of their women and smallholder farmer clients.

More than 3,400 people registered for CFI’s 2021 Financial Inclusion Week, the highest level of participation in the event’s history. Financial Inclusion Week convened financial service providers, regulators, policy experts, researchers, and industry leaders in wide-ranging discussions surrounding the central theme of promoting prosperity in an era of uncertainty. The agenda featured more than 300 speakers and sessions that explored critically important topics in today’s evolving and complex context, including the role of financial services in helping vulnerable people manage climate risks, addressing social norms that restrict women’s financial inclusion, and the evolving consumer risks and challenges in the digital economy.

Capital is often easily available to well-known fintechs, but less so for early-stage fintechs focused on financial inclusion and resilience for underserved customers. The Inclusive Fintech 50 competition provides these startups with valuable visibility and credibility among investors, as well as exposure to media and potential partners. The 2021 winners were selected from a pool of 377 applicants, representing 77 countries, with Sub-Saharan Africa representing nearly half of all candidates. An independent panel of 22 expert judges selected the fintechs through a rigorous process that evaluated their inclusivity, innovation, traction, and scale potential. The 2021 competition was sponsored by Visa, MetLife Foundation, and Jersey Overseas Aid & Comic Relief, with support from Accion and IFC.

Algorithms can make it easier to expand the reach of digital financial services, but they can also discriminate against people with limited credit histories. In 2021, CFI hosted a virtual roundtable conversation on this critically important topic, cochaired by the United Nations Secretary General’s Special Advocate for Inclusive Finance for Development H.M. Queen Máxima of the Netherlands and CFI’s Managing Director Mayada El-Zoghbi. The conversation was attended by central bank governors from around the world, and drew from CFI’s 2021 report “The Stories Algorithms Tell: Bias and Financial Inclusion at the Data Margins.” As digitization continues to rapidly accelerate, this convening opportunity sought to ensure global leaders are maximizing opportunities and minimizing potential risks.

Globally, less than half of women participate in the labor force, compared to three-quarters of men. And in developing regions, up to 95 percent of women’s employment is informal, leaving them unprotected by labor laws. The global pandemic only added to these challenges, as women faced higher rates of job loss and more family care responsibilities. In 2021, with support from the Bill and Melinda Gates Foundation, CFI conducted landscaping research to illuminate how social norms can restrict women’s ability to participate in the economy and evaluate the research to date on programs seeking to change these norms. CFI research also explored the effectiveness of efforts to equip women with digital and financial tools they need to grow their businesses, support their families, and recover from the multi-faceted challenges created by the pandemic.

Supported by the Mastercard Center for Inclusive Growth, in 2021 CFI continued to release results of a survey of micro, small, and medium-sized enterprises (MSMEs) across 4 countries — Colombia, India, Indonesia, and Nigeria — to understand the impact of COVID-19 on their financial performance and the financial lives of their owners. The trends illuminated by CFI’s data from this survey show that MSMEs and their owners have been dramatically affected by the pandemic, impacting their income, employment, and financial security. MSMEs surveyed are largely struggling to go digital, suggesting that the smallest enterprises have yet to benefit from the latest wave of digitalization.

In 2021, AOF reached a remarkable milestone in lending: disbursing $123.7 million through nearly 3,000 loans, with a focus on women and people of color. In addition, AOF’s virtual training series shared valuable knowledge and skills with more than 4,600 people, 75 percent of whom were people of color and 67 percent of whom were women. Most attendees reported that the training made them feel more prepared to run their business. AOF also provided free one-on-one coaching to 755 small business owners via in-house coaches and through trusted partners, offering personalized support in navigating ownership and management of small businesses. AOF’s coaching clients were 82 percent people of color and 62 percent women. Nearly 1.3 million individuals also learned from digital educational resources in AOF’s online Business Resource Library.

Despite a global pandemic and an inequitable financial system, small business owners continue to persevere in building thriving neighborhoods and vibrant local economies. AOF is proud to support entrepreneurs such as Dora, the president of California-based Yuca’s Restaurants, who participated in one-on-one coaching with AOF. “It’s wonderful that groups like AOF think about small businesses and ways to help us survive,” Dora said. “That’s kind of what makes pandemics like this survivable is that you know that there are people who are out there who care.”

In 2021, AOF built and expanded several relationships with corporate partners who share our mission to empower traditionally excluded small businesses:

We worked alongside DoorDash to develop the Main Street Strong Accelerator program, which supported restaurants by connecting owners with resources to recover from the COVID-19 pandemic. In 2021, 100 business owners participated in the accelerator, receiving $20,000 grants and access to an eight-week, hands-on business curriculum.

We expanded a long-standing relationship with FedEx to create the FedEx E-Commerce Learning Lab, which helps women entrepreneurs and entrepreneurs of color who own small product-based businesses develop and grow e-commerce operations.

We teamed up with LegalZoom on Fast Break for Small Business, an initiative to support thousands of small business owners with $6 million in grants and LegalZoom services over three years. AOF is the nonprofit administrator of this innovative program, which is supported by a partnership between LegalZoom and the NBA, WNBA and NBA G League. In the first grant cycle, AOF awarded $10,000 grants and $500 in LegalZoom services to 50 small business owners across 27 states, with recipients who are predominantly women and people of color. An additional 950 small businesses each received $500 in LegalZoom services.  

In 2021, American Express made a record-breaking $40 million commitment to AOF, which marked the largest contribution to support the organization’s work to date. This investment, which reaffirms American Express’ commitment to supporting entrepreneurs of color, will yield more than $125 million in loans for small businesses. These loans will help create or retain more than 10,000 jobs and create a ripple effect of economic activity as funds flow through local communities and are repaid. AOF’s ongoing partnership with American Express offers Small Business Progress Loans of $5,000 to $100,000 and connections to valuable business resources from American Express.

The New Markets Tax Credit (NMTC) Program is a federal program that helps economically-distressed communities fill project financing gaps by enabling investors to make larger investments than would otherwise be possible. AOF participates in the NMTC Program by partnering with community-based organizations across the Western U.S. to scale their impact. Through the NMTC Program, AOF finances the construction or expansion of nonprofit-sponsored community facilities that provide education, medical care, healthy food, and temporary shelter while creating jobs and building healthy economies predominantly in low-income neighborhoods. AOF has invested $388 million in NMTC Program projects, building 32 nonprofit facilities and Native American community projects that support approximately 8,300 construction jobs and permanent jobs. These projects have served more than 839,000 people, predominantly low-income individuals, people of color, and at-risk youth.