Accion in India: Advancing financial inclusion in one of the world’s fastest-developing economies

Two employees of CreditMantri talk outdoors

India has been a priority for Accion’s work since our first project there in 2005. With a large, diverse, young, and entrepreneurial population, India is similar in many ways to other parts of the world in which we are active. At the same time, the country also offers unique opportunities across the entire spectrum of our experience and expertise.

In recent years, India’s government has made a concerted effort to bring its entire population into the formal economy, and has dedicated significant resources to policies and technology platforms to help achieve this goal. Progress has been impressive: according to the World Bank Global Findex, between 2011 and 2017, the share of adults in India with a bank account more than doubled, reaching 80%.

And yet, the same Findex reports that in 2017, India had the world’s second-highest number of unbanked people, and the highest number of dormant bank accounts. There is still so much more work to do to ensure that everyone in India has access to financial services that meet their needs, and Accion is committed to helping make this happen. Examples of how we are doing this include:

  • Expanding the availability of safe, responsible microcreditespecially in rural areas. The Smart Campaign, a Center for Financial Inclusion initiative committed to embedding client protection principles into the financial inclusion industry, has worked with microfinance institutions across India to assess their client protection policies and certify those that adhere to Smart Campaign standards. One example is Ujjivan, based in Bengaluru, which was one of the first microfinance institutions certified by the Smart Campaign, and has since become a small finance bank.
  • Capacity-building for entrepreneurs, through our Dialogue on Business program, which uses engaging, interactive, multimedia methods for training microentrepreneurs in financial education and business management skills.
  • Serving the “missing middle” — businesses that are outgrowing what microfinance can provide, but are still too small or informal to qualify for traditional bank loans. Accion has invested in and advises Aye Finance, whose cluster-based approach to lending allows it to make well-informed and quick decisions on loan applications. Accion has also worked with Swadhaar FinServe on many projects, including helping assess its institutional readiness as it transformed its lending model.
  • Supporting innovative fintech companies that are using digital channels to provide financial services, including new delivery models for familiar products like savings accounts or microloans, or services entering the Indian market for the first time, like insurance. Accion Venture Lab’s portfolio company CreditMantri has developed a model that uses alternative data sources to boost the creditworthiness of loan applicants. Another portfolio company, Pula, is piloting crop insurance for smallholder farmers in India — using a model it developed in sub-Saharan Africa.

Having worked with dozens of financial institutions and fintech startups, Accion is excited about India’s future and about doing our part to ensure that everyone in the country has access to economic opportunity.

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