The world has changed so much over the past few years. The pandemic dealt a devastating blow to the global economy, impacting low-income people hardest. And now, for the first time in our lifetimes, global poverty and hunger are on the rise and the threat of a prolonged global recession is creating new uncertainty. These trends will have major consequences for families, small businesses, and communities globally.
Accion’s work has never been more urgent. But as challenges evolve, so do solutions. After months of monitoring current trends, reflecting on lessons learned, and charting bold steps forward—with support from Bain & Company—we are evolving our strategy to ensure our work has the greatest impact for underserved people globally.
New challenges bring new opportunities
While today’s challenges seem overwhelming, we’re also seeing powerful opportunities to build a fair, inclusive, and resilient economy. According to the 2021 Findex, more than a billion people gained access to formal financial accounts over the past decade — thanks largely to a digital revolution accelerated by the pandemic. This is very encouraging progress.
As more people gain basic financial tools, they can use them to improve their lives — and access a broader suite of tools to build resilience. A farmer can purchase insurance to protect against climate disasters, a small business owner can access revolving credit to manage supply chain issues, and an aspiring doctor can save money for education.
Accion is uniquely positioned to maximize these opportunities — and respond to challenges. Through making investments in a wide range of businesses focused on delivering social impact, advising partners, and influencing the industry, Accion will catalyze capital and scale demonstration models that accelerate the reach and quality of responsible financial services for underserved people. We will focus our efforts on women, smallholder farmers, and small businesses, to help them build a brighter, more resilient future.
With governments and central banks focused on tackling inflation and cooling economies, private sector solutions are especially important. Accion will continue to find, support, and scale the world’s most innovative, inclusive financial service providers, leveraging capital, post-investment support, governance, and investments in digital transformation to ensure these companies provide the most useful and effective support to their clients. We’ll also expand our leadership in inclusive fintech, supporting innovative companies that harness new technologies like AI and data analytics to expand the reach, quality, and affordability of financial services.
While strengthening our current investing, advisory, and research work, we will put greater emphasis on supporting and exploring innovation across three areas:
1. Embedded finance
While traditional finance often requires customers to jump through hoops, embedded finance makes it possible to offer services to customers upfront, using their data to anticipate their needs and credit risk. For example, our fintech partner Cashinvoice in India leverages data on small businesses to embed supply chain financing products in large platforms that small businesses already use. This innovative practice has the potential to seamlessly equip millions of underserved people with the financial tools they need to improve their lives.
Going forward, we will seek to create new entry points for embedded finance in platforms our clients already use, like retailers selling seeds to smallholder farmers, and focus on areas of the MSME value chain with the most pain points. We will focus our efforts on small businesses, with an emphasis on farmers and women.
Two thirds of the world’s working poor make a living through agriculture, and they are increasingly vulnerable to climate change. By equipping farmers with new financial tools and digital capabilities, we can help them build resilience. We’ve seen great results through our work with fintechs like PULA and Apollo Agriculture that leverage technologies including satellite imaging and mobile apps to equip smallholder farmers across sub-Saharan Africa with crop insurance, customized advice, and credit. We’ve also deepened the impact of microfinance providers like Fundación Génesis Empresarial in Guatemala and Dvara KGFS in India that provide credit and other financial services to farmers.
Going forward, we’ll explore targeting other service providers within the value chain, including aggregators, farmer-allied intermediaries, and distributors, to help them serve farmers more effectively. We can also leverage Accion’s expertise in consumer protection to help smallholder farmers better apply digital financial solutions to build their financial health.
3. The future of work
Increasingly, people are earning a living through non-traditional employment models, including gig or informal work, and they are particularly vulnerable to financial shocks. By nurturing financial service providers focused on these populations, we can help them gain a stronger foothold in the economy and strengthen their resilience. For example, our fintech partner MyRobin has created a digital platform that provides blue-collar workers in Indonesia with access to fair employment opportunities, training, and financial services that strengthen their resilience and advance their careers, and our partner UGAFODE in Uganda is helping refugees start businesses and access financial tools.
In the short-term, Accion will begin exploring opportunities to support workers shifting from informal to formal work through gig work platforms, prioritizing platforms that cater to women. In the long-term, we may also consider the global implications of automation, migration, and displacement on the workforce—and how solutions like cross-border payments and upskilling can help these workers build their financial health.
Accelerating change through knowledge and collaboration
Sharing our knowledge is critical to creating systemic change. Through rigorous research conducted by the Center for Financial Inclusion, and by sharing insights we gather through our work with partners around the world, we will share best practices and evidence that supports a more effective, responsible, and inclusive financial system, and products that are people-focused.
Through convenings like Financial Inclusion Week, we’ll continue to engage and influence stakeholders across our thematic priorities of consumer protection, women’s financial inclusion, data management, and climate resilience. In the future we’ll also explore the impact of new innovations—including those in embedded finance, agtech, and the future of work—to better gauge the effectiveness of our own work, and promote demonstration models that enable providers to better serve their clients.
Accion’s greatest strength is its people. We will continue to ensure our employees have the respect and resources they need to achieve excellence and execute their passion for social change. To deepen our impact and efficiency, we’ll also promote more learning and collaboration across the organization and our networks. This way, we can draw new connections and form new partnerships, like supporting a microfinance bank as they apply a fintech startup’s gamification technology to increase customers’ savings rates.
I’m excited to work with our team to scale our impact. The future is uncertain, but the challenges of the past have granted us new lessons, powerful tools, and greater resolve to support people with the most urgent needs. Your support powers everything we do—and I welcome you to join us on this exciting and important journey.