Trust of Data Usage, Sources, and Decisioning: Perspectives From Rwandan Mobile Money Users

Across all industries, predictive, data-driven algorithms -- mathematical recipes ranging from the simple to the complex -- are being used to tell stories about individuals and can drive high-stakes decisions: who receives a loan, what sentencing a judge will recommend, what therapeutics a doctor will provide.

In the financial services industry, the exploding data ecosystem has created billions of new stories. At the Center for Financial Inclusion (CFI), we are most interested in the ones they try to tell (or don’t tell) about low-income consumers.

This publication has two main objectives:
<ul>
 	<li>to ground some universal challenges on the use of algorithms, automated decisions, alternative data, and bias in the context of inclusive financial services</li>
 	<li>to present the current state of play among inclusive finance actors from desk research and interviews with a sample of fintechs, regulators, and other experts.</li>
</ul>
Our insights are aimed primarily at financial inclusion stakeholders who can influence the trajectory of the inclusive finance industry, with specific recommendations for regulators, investors, and donors. But anyone with an interest in algorithmic decision making or financial inclusion will find this publication thought provoking and useful.

The full publication is divided into the following sections:
<ul>
 	<li>The <strong>introduction</strong> explores algorithms and bias in inclusive finance, presents a framework for understanding algorithmic bias, and delves into what we want to know about algorithms, bias, and financial inclusion.</li>
 	<li>Section 1 is about <strong>data trails in the digital economy</strong>.</li>
 	<li>Section 2 digs into the <strong>risks of bias and emerging tools</strong> through the three categories: inputs, code, and context.</li>
 	<li>Section 3 lays out <strong>recommendations for inclusive finance stakeholders</strong> to advance evidence, solutions, and incentives for responsible algorithms.</li>
</ul>

The Stories Algorithms Tell: Bias and Financial Inclusion at the Data Margins

APIs are often viewed as potential solutions for traditional financial institutions, particularly small and midsize banks, to partner with upstart financial technology companies (fintechs) to offer innovate products, especially to low-income customers. In practice, however, d<span data-contrast="auto">ue to the maturity of the fintech market, </span><span data-contrast="auto">fear of losing competitive advantage, and a variety of strategic errors in planning for and developing APIs, smaller banks and </span><span data-contrast="auto">fintechs</span><span data-contrast="auto"> do not often succeed in deploying API solutions for inclusive finance. </span><span data-ccp-props="{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6}"> </span>

In this report, based on<span class="TextRun BCX2 SCXW4216040" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun BCX2 SCXW4216040"> nearly two dozen interviews with leaders at fintech companies, small and midsize banks, and large financial institutions,</span></span> CFI Fellow <a href="/bio/dan-kleinbaum">Dan Kleinbaum</a>, <span class="TextRun BCX2 SCXW71634487" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun BCX2 SCXW71634487">examines the extent to which APIs are meeting their potential to facilitate bank and fintech partnerships that advance financial inclusion</span></span>. Dan breaks down what API integrations between banks and fintechs look like and how typical deployments work. Finally, he offers four recommendations for how to improve <span class="TextRun BCX2 SCXW235310262" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun BCX2 SCXW235310262">API deployments between banks and </span></span><span class="TextRun BCX2 SCXW235310262" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="SpellingError BCX2 SCXW235310262">fintechs</span></span><span class="TextRun BCX2 SCXW235310262" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun BCX2 SCXW235310262"> to deliver financial services to underserved communities.</span></span>
<h2>A Typology of APIs</h2>
It is useful for leaders at financial institutions to understand the types of APIs common in financial services. For examples, in API aggregator and platform models shown below, a third-party provides APIs on behalf of financial institutions to institutional customers (e.g., fintechs) in its network. The aggregator or platform may also provide sales, marketing, onboarding and other services. We also explore open and private API models in the report.
<h3>API Aggregator and Platform Models</h3>
<img class="size-large wp-image-37835" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2020/03/CFI55_API_deployments_FINAL-fig05_graphic-LOGO-1024x596.jpg" alt="API Aggregator and Platform Models" width="1024" height="596" />

API Deployments in Inclusive Finance

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<p class="text-block__article sc-kjoXOD hLBZML">The <a href="/about/what-we-do/board-leadership-for-impact-program">Board Leadership for Impact Program</a> (BLI) is dedicated to empowering corporate leaders in the social enterprise sector to <strong>achieve business growth and social impact</strong>. By focusing exclusively on executive leadership and reframing board effectiveness as a strategic imperative, BLI strengthens leadership and management to ensure these companies sustain business growth and drive social impact.</p>

<h3 class="text-block__article sc-kjoXOD hLBZML">Join a select group of social enterprise leaders at the BLI Nairobi 2020 Workshop,  February 23-25, 2020, at the Fairview Hotel in Nairobi, Kenya.</h3>
BLI is offered as a two-day interactive workshop where participants gather with faculty and facilitators for role play, simulations, discussions, and more. Workshops are augmented with a robust virtual portal where participants can access resources and videos, participate in discussions, and stay connected with hundreds of leaders in our global network. Attendees will have the opportunity to engage with peers on issues critical to social enterprise growth and impact, including digital strategy and culture, data, partnerships and financial inclusion in the digital age.
<h3><strong>Pricing</strong></h3>
The BLI Nairobi 2020 Workshop tuition is <strong>$2,500 USD</strong>, excluding airfare and lodging. Discounts, group rates and partial scholarships are available:
<ul>
 	<li><strong>Early Bird Rate - $2,250 USD</strong> (10% discount). Available to all registrants through December 31, 2019.</li>
 	<li><strong>Group Registration Rate - $2,250 USD</strong> per person for groups of two or more (10% discount per person).</li>
 	<li><strong>Limited partial scholarships</strong> will be considered on a case-by-case basis. You can request scholarship consideration during the registration process.</li>
</ul>
<h2>Registration is now closed.</h2>
<h3>Questions</h3>
Learn more about the <a href="/about/what-we-do/board-leadership-for-impact-program">Board Leadership for Impact Program</a> and <a href="mailto:gjaso@accion.org">contact us</a> if you have questions or need more information.

</div>
</div>
</div>

Board Leadership for Impact Nairobi 2020 Workshop

<h2>Key Takeaways</h2>
<ul>
 	<li>It's important for early-stage companies, especially innovative ones with exponential growth and market disruption potential, to be proactive about governance by ensuring a strong board is in place before periods of growth and important inflection points occur.</li>
 	<li>Boards need to ensure investors are aligned on social mission and values.</li>
 	<li>It's important for the role of the board and the role of individual board members to be clearly defined and understood from the outset. This means that investor board members should be neither too involved in operations, nor merely fulfilling an obligation to have a board seat.</li>
 	<li>The role of boards will evolve as a company grows and innovates, but strong, well-functioning boards add value at every stage of a company’s growth and development.
Board meetings should to be held at regular intervals, and attendees should “do their homework” and be prepared to actively participate.</li>
 	<li>Having a board provide “checks and balances” doesn’t necessarily mean slowing down growth or innovation. Strong boards challenge founders, make important introductions, partner in growth, and ultimately make a company more sustainable for the long term.</li>
</ul>

Corporate Governance for Early-Stage, Innovative Companies: A Practical Resource Guide

We are convening a select group of social enterprise leaders at the <a href="/about/what-we-do/board-leadership-for-impact-program">Board Leadership for Impact Program</a> (BLI) inaugural workshop taking place October 27-29, 2019, at the Fairview Hotel in Nairobi, Kenya.

BLI is dedicated to empowering corporate leaders in the social enterprise sector to achieve business growth and social impact. By focusing exclusively on executive leadership and reframing board effectiveness as a strategic imperative, BLI strengthens leadership and management to ensure these companies sustain business growth and drive social impact.

BLI is offered as a two-day interactive workshop where participants gather with faculty and facilitators for role play, simulations, discussions, and more. Workshops are augmented with a robust virtual portal where participants can access resources and videos, participate in discussions, and stay connected with hundreds of leaders in our global network. At this inaugural workshop, attendees will have the opportunity to engage with peers on issues critical to social enterprise growth and impact, including digital strategy and culture, data, partnerships and financial inclusion in the digital age.

Board Leadership for Impact Program Launch Workshop

<strong>WASHINGTON, DC, August 27, 2019</strong> – The Center for Financial Inclusion at Accion (CFI) has launched an executive education program for financial service providers serving low-income communities in emerging markets. Through peer learning and exchange, the <a href="/about/what-we-do/board-leadership-for-impact-program">Board Leadership for Impact Program</a> will empower executives and board members to foster client centricity, lead digital transformation, sustain business growth and drive social impact. In partnership with the <a href="https://www.citigroup.com/citi/foundation/">Citi Foundation</a> and <a href="https://www.fmo.nl/">FMO</a>, the Dutch development bank, supporting program implementation and participant scholarships, the Board Leadership for Impact Program will offer multiple in-person workshops per year coupled with a robust virtual portal.

Derived from CFI’s five-year <a href="https://content.centerforfinancialinclusion.org/about/what-we-do/africa-board-fellowship-program/">Africa Board Fellowship Program</a>, which fostered the growth and development of more than 300 executives and board members of financial service providers serving more than 10 million clients in Africa, the Board Leadership for Impact Program will now expand to include early stage to mature companies offering financial services to underserved customers that operate in emerging markets around the world.

“Our experience with leadership development through peer exchange will inform our efforts through this new program to cultivate a community of leaders who have the skills and the network to help their organizations thrive,“ said <a href="/bio/deborah-drake">Deborah Drake</a>, Vice President, Center for Financial Inclusion at Accion. “Tackling challenges like achieving sustainable growth or pursuing digital transformation, particularly as a mission-driven organization, takes strategic leadership at the board level.”

Through role play, simulations and facilitated discussion, participants will gain new perspectives, skills, and knowledge on topics critical to social enterprise growth and impact, including risk management, board dynamics, digital transformation and inclusive digital finance. They will join an active community of alumni of the Center for Financial Inclusion at Accion’s <a href="https://www.centerforfinancialinclusion.org/get-involved#fellow-exec-ed">executive education programs</a>.

“By developing and strengthening leadership skills that drive business growth and social impact, our partnership with the Center for Financial Inclusion at Accion will help accelerate financial inclusion and economic progress around the world,” said Florencia Spangaro, Director of Programs, Citi Foundation.

“FMO is a proud partner of Accion for over a decade and we realize that creating a lasting impact starts in the board room. Strengthening the management of financial service providers and enterprises will help ensure business longevity and commitment to underserved customers,” said Gerbrich Salverda, Capacity Development Officer at FMO.
<p style="text-align: center;"><strong>###</strong></p>
<strong>About the Center for Financial Inclusion at Accion</strong>

The Center for Financial Inclusion at Accion (CFI) is an action-oriented think tank that engages and challenges the industry to better serve, protect, and empower clients. We develop insights, advocate on behalf of clients, and collaborate with stakeholders to achieve a comprehensive vision for financial inclusion. We are dedicated to enabling 3 billion people who are left out of – or poorly served by – the financial sector to improve their lives.
<a href="http://www.centerforfinancialinclusion.org/">www.centerforfinancialinclusion.org</a>
<a href="https://twitter.com/CFI_Accion">@CFI_Accion</a>
<p style="text-align: center;"><strong>###</strong></p>
MEDIA CONTACT

Center for Financial Inclusion at Accion
<a href="/bio/virginia-moore">Virginia Moore</a>
<a href="mailto:vmoore@accion.org">vmoore@accion.org</a>
+1 202.393.5113

The Center for Financial Inclusion at Accion Launches Executive Education Program for Financial Service Providers to Enable Business Growth and Social Impact

Can you help me find some positive deviants?

I guess I should explain the term first. I’m not talking about an optimistic misfit, or an affirming nonconformist, or a heavy metal band with uplifting lyrics. Instead I’m using one of <a href="https://positivedeviance.org/">my favorite terms</a> from behavioral science. Positive deviants are individuals or groups who find better solutions to problems than their peers, without having more resources or facing easier challenges than others.

A positive deviant is someone who succeeds when others are failing, a person who finds a way out when everyone else is stuck. The purpose of studying these deviations from the norm is to learn from the strategies of the positive deviants to see if others can adopt them and get similar results.

I recently was selected as a <a href="https://www.centerforfinancialinclusion.org/2019-cfi-fellows">CFI Research Fellow</a> to study positive deviance in the banking industry. Specifically I will be looking at banks that provide accounts for clients receiving social welfare payments from the government (G2P payments), seeking to find banks that invest in serving this client base.

In countries around the world, governments distribute regular cash payments to those living below the poverty line. Sometimes these payments come with conditions, like keeping the children in school and receiving regular medical checkups. Sometimes they come as part of a public works project. And sometimes they have no conditions at all.

<a href="https://publications.iadb.org/publications/english/document/How-Conditional-Cash-Transfers-Work.pdf">Studies</a> have shown that these payments, even when very small (US $20 to $50 per quarter), can help families move out of poverty by stabilizing incomes. In addition, these payments can <a href="http://www.fao.org/3/a-i5157e.pdf">reduce the intergenerational transfer of poverty</a> by increasing the chances that parents can afford to send their children to school so that they may have better job opportunities than was previously possible.

Years ago, governments made these payments in cash. That’s right, a big truck loaded with cash would pull up to a local government office and drop off a bundle of bills. Local officials would distribute this cash to those on the government social welfare rolls. As you can imagine, much of this money never made it to the right people.

Today, governments use a quicker and less leaky method. They set up bank accounts for each beneficiary and deposit the money directly in their account. Now, in most cases, these accounts serve as a mailbox for those receiving the payments—as soon as the money comes in, its owner will go to the bank or an ATM and withdraw the full amount.
<blockquote>Why don’t recipients of social welfare payments keep money in the bank?</blockquote>
Why don’t recipients keep any money in the bank? Research by Guy Stuart of Microfinance Opportunities, and a CFI Fellow, looked at this question from the demand side and <a href="https://www.centerforfinancialinclusion.org/government-to-person-transfers">found</a> that the people receiving these payments:
<ul>
 	<li>Don’t trust the banks – Why should they leave their money with rich people they don’t know when they can keep it at home?</li>
 	<li>Don’t know about other products and services the banks have that might be useful to them.</li>
 	<li>Don’t see any benefit to leaving money in their account – especially when getting the money out requires a long walk to a bank branch or ATM.</li>
</ul>
<a href="https://www.centerforfinancialinclusion.org/bio/larry-reed">My research</a> will look at the supply side of this challenge. I can make a business case for why banks should invest in this customer base as part of a long-term strategy for building profits. It goes like this:
<ul>
 	<li>Banks accounts tend to be very "sticky." (A UK <a href="https://www.theguardian.com/money/2013/sep/07/switching-banks-seven-day">study</a> that found that people there changed spouses more frequently than checking accounts.)</li>
 	<li>Governments disburse social payments to large numbers of people, essentially handing over a ready-made client base.</li>
 	<li>Banks that offer products and serve these clients well will earn their loyalty.</li>
 	<li>Over time, many of these people will move out of poverty and have <a href="https://www.womensworldbanking.org/insights-and-impact/women-mexico-digital-g2p-financial-inclusion/">more active accounts and larger balances</a>.</li>
 	<li>This gives the banks that offer these accounts a chance to acquire large numbers of customers long before their competitors become interested.</li>
</ul>
<h2>A Different Perspective on G2P Payment Customers</h2>
Unfortunately, most banks do not see it this way. Since the money does not stay in the bank very long, they don’t see a way to make money on these accounts. They will set them up if the government will pay the cost of operating them, but they don’t want to invest resources into this customer base. This means that they don’t offer the types of products that meet the needs of these customers and they don’t take the time to help their customers learn how to use their accounts. Lack of <a href="https://strategiccfo.com/customer-profitability/">customer profitability</a> becomes a self-fulfilling prophecy.

So, I'm on my search for positive deviants, looking for banks that go against the grain and see these customers as part of their strategy for generating profits over the long term. The key criteria for banks to qualify as positive deviants in this area are:
<ul>
 	<li>Actively pursuing clients receiving social welfare payments from the government</li>
 	<li>Developing products designed for the needs and aspirations of these clients</li>
 	<li>Helping their clients learn how to make the best use of these products</li>
 	<li>Showing results in clients using more banking services over time</li>
</ul>
One of the banks I will be visiting is BHD Leon Bank in the Dominican Republic. They have <a href="https://www.povertyactionlab.org/evaluation/leveraging-government-transfers-offer-low-risk-microcredit-dominican-republic">invested in serving people receiving social payments</a> through Progresando con Solidaridad (PROSOLI), the government’s primary anti-poverty program. PROSOLI organizes its payment recipients into savings groups. BHD Leon provides savings accounts for these recipients, with debit cards for the account holders. BHD Leon also provides accounts a range of financial services to the owners of <em>colmados</em>, the small convenience stores where most people shop. It has set these stores up as banking agents, so those receiving G2P payments can use their debit cards to purchase food and supplies while also making their deposit for their savings group. This drives more traffic to those stores that bank with BHD Leon. By seeing the G2P payment recipients as part of a larger financial ecosystem which includes savings groups and convenience stores, BHD Leon has found a way to provide neighborhood service to the PROSOLI recipients while also expanding its business with the owners of neighborhood stores.

So how about it, have you come across any banks that deviate from the norm in this way? If so, please let me know in the comments below.

Thanks for your help.

<em>Have a listen to the <a href="https://www.centerforfinancialinclusion.org/webinar-meet-the-2019-cfi-research-fellows">CFI webinar</a> I recently participated in to learn more!</em>

Searching for Positive Deviants

<a href="/bio/deborah-drake">Deborah Drake</a> will be discussing the forthcoming “Governance Guidelines for Innovative Companies Serving the Base of the Pyramid,” a collaboration between FMO and CFI (originally published 2005, revised in 2019). We look forward to receiving input on this draft at/following this event.

13th Annual DFI Corporate Governance Conference

In this session, we spoke with our incoming CFI Research Fellows, Dan Kleinbaum and Larry Reed, who will be exploring research questions over the coming months that we think are especially important to the financial inclusion space today.
<ul>
 	<li>How do financial institutions use mass APIs, open APIs, custom APIs and bespoke partnerships to partner effectively with fintechs to reach the underserved?</li>
 	<li>How can banks and other financial institutions provide a set of accounts and services for G2P recipients in a profitable way?</li>
</ul>

Webinar: Meet the 2019 CFI Research Fellows

Michael Schlein

Victoria White

Jason Loughnane

Europe and Central Asia

Netherlands

East Asia and Pacific

Myanmar

Access Usage Gap

Agricultural and Rural Finance

Challenges and Crises

Consumer Protection

Credit

Delivery Channels

Digital Financial Services

Enabling Environment

Financial Service Providers

Smallholder Farmers

Trends

Underserved Groups

Digital Credit

Appropriate Product Design and Delivery

Financial Technology

Impact Investing

Responsible Digital Finance

Financial Inclusion Strategy

Human Centered Design

Women

Governance

Mobile Banking

Payments

Fintechs

Podcast

Article

Case Study

Press Release

For more than twenty years, FMO, the Dutch development bank, has been a valuable financial and nonfinancial supporter of Accion’s work. Together, we have built a partnership based on a shared commitment to entrepreneurs, innovation, and strong governance of financial institutions. FMO is committed to becoming a “preferred partner to invest in local prosperity,” and alongside Accion, it has found unique opportunities to achieve that.

FMO and Accion: Empowering entrepreneurs, supporting innovation, and strengthening governance

Climate change threatens vulnerable, low-income populations around the world, including smallholder farmers. In this discussion, we explore if fintech solutions can address farmers' pain points. <a href="https://www.centerforfinancialinclusion.org/bio/mayada-el-zoghbi" target="_blank" rel="noopener noreferrer">Mayada El-Zoghbi</a>, Managing Director of the Center for Financial Inclusion, leads a panel discussion between entrepreneurs and investors to discover how financial solutions can help combat and mitigate climate risks.

Smallholder farmers are a crucial component of the agriculture supply chain; unfortunately, they are also the most susceptible to long-term negative effects of climate change.

Together, panelists explore how financial services and solutions aimed at smallholder farmers can help smooth these effects and create lasting livelihoods for this population.
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To learn more about Accion Venture Lab, visit our <a href="https://www.accion.org/how-we-work/invest/accion-venture-lab" target="_blank" rel="noopener noreferrer">website</a> and follow us on <a href="https://twitter.com/accionvlab" target="_blank" rel="noopener noreferrer">Twitter</a> and <a href="https://www.linkedin.com/showcase/accion-venture-lab/" target="_blank" rel="noopener noreferrer">LinkedIn</a>.

<a href="https://link.chtbl.com/A_DnD53t" target="_blank" rel="noopener noreferrer">Listen here</a>.

<img class="aligncenter wp-image-27501 size-large" src="https://content.accion.org/wp-content/uploads/2023/01/FFTP-ep3_1-1024x576.png" alt="FFTP-ep3 graphic" width="1024" height="576" />

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Combating Climate Risk with Agriculture Finance

<span data-contrast="auto">Entrepreneurs are working worldwide to build financial solutions across credit, payments, and insurance so small business owners can better access financial services. Embedded finance is evolving quickly, and its capabilities are widening. In this episode, Amee Parbhoo sits down with four CEOs at the </span><a href="https://www.accion.org/fintech-for-inclusion-global-summit-2022" target="_blank" rel="noopener noreferrer"><span data-contrast="none">Fintech for Inclusion Global Summit</span></a><span data-contrast="auto"> to hear how their companies are building embedded finance solutions that uniquely reach underserved populations across the globe.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:276}"> </span>

<span data-contrast="auto">Each panelist shares why they chose to develop embedded finance solutions and how it gives small business owners access to credit and payment solutions. Then, they discuss the importance of transparency around pricing and between partners, how to combat the risks around data privacy, how to make the value proposition work for end </span><span data-contrast="auto">customers and</span><span data-contrast="auto"> offer solutions that simplify the technical integration processes.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:276}"> </span>

<span data-contrast="auto">To learn more about Accion Venture Lab, visit our </span><a href="https://www.accion.org/how-we-work/invest/accion-venture-lab" target="_blank" rel="noopener noreferrer"><span data-contrast="none">website</span></a><span data-contrast="auto"> and follow us on </span><a href="https://twitter.com/accionvlab" target="_blank" rel="noopener noreferrer"><span data-contrast="none">Twitter</span></a><span data-contrast="auto"> and </span><a href="https://www.linkedin.com/showcase/accion-venture-lab/" target="_blank" rel="noopener noreferrer"><span data-contrast="none">LinkedIn</span></a><span data-contrast="auto">.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:276}"> </span>

<a href="https://link.chtbl.com/6MpJqLHi" target="_blank" rel="noopener noreferrer">Listen here</a>.

<img class="size-large wp-image-27357 aligncenter" src="https://content.accion.org/wp-content/uploads/2022/12/FFTP_ep1_3-1024x576.png" alt="podcast graphic with headshots" width="1024" height="576" />

How platforms fuel the adoption of embedded finance

Inclusive fintech CEOs work in the most highly-regulated sector on earth. They have to hire talented teams, navigate opaque regulations, and work hard for funding. In addition to entrepreneurial challenges, they’re also trying to create impactful businesses that help build a financially inclusive world.

That doesn’t overwhelm the founder-CEOs that we work with. Being in a room with roughly 50 of the most innovative fintech CEOs and company leaders at the Inclusive Fintech CEO Forum in The Hague was absolutely thrilling: they’re all working on a common mission and trying to bring new financial tools to people who need them.

[caption id="attachment_18223" align="alignleft" width="500"]<img class="wp-image-18223" src="https://content.accion.org/wp-content/uploads/2019/04/FintechForInclusionGlobalSummit_2019_NicoAlsemgeest_0116-1-1024x708.jpg" alt="" width="500" height="346" /> <em>At the Inclusive Fintech Summit, leaders came together to discuss how we can drive financial inclusion.</em>[/caption]

Hosted by <a href="https://www.accion.org/how-we-work/invest/accion-venture-lab">Accion Venture Lab</a>, <a href="https://quona.com/">Quona Capital</a>, and <a href="https://www.fmo.nl/">FMO</a>, the Forum allowed CEOs to learn from one another: whatever a CEO’s top problem was, someone else there had solved it, thought about it, or, at the least, could commiserate about it.

More often than not, their conversations returned to basic issues like hiring staff, creating an effective corporate culture, overcoming adversity, or engaging customers. These issues are more important today than ever before: by understanding peoples’ behavior, needs, and goals, we can use technology to provide more customers with better, faster, cheaper, and safer financial products and services. Knowing our customers is the only way to develop a scalable, sustainable, and impactful company — and building those companies is how we’ll create a financially inclusive world.

Our CEOs’ energy and passion were inspiring; I’m still impressed by some of the highlights from their conversations:
<h2><strong>It’s all about people – not technology </strong></h2>
Companies everywhere are wrestling with how to use technology to achieve scale and efficiency while meeting customers’ preferences for <a href="https://www.accion.org/does-human-touch-still-have-a-place-in-a-high-tech-world/">human touch</a>. Being well-informed about and responsive to your customers is the only way to come up with appropriate solutions:
<ul>
 	<li><strong>Technology is not the product. </strong>Instead, it’s a background layer that should enable product delivery. For financially underserved customers, the technology tends to work best when it automates internal operations in the background — not when it’s foregrounded as the product itself.</li>
 	<li><strong>Don’t assume. </strong>Talk to prospective clients first. What technology do they use? How do they use it? What are they willing to try?</li>
 	<li><strong>Shrink your time zones</strong>. Have your tech team near your customers so they can respond quickly. Create a feedback loop where both your tech team and customers inform one another.</li>
 	<li><strong>The more your team knows your clients, the better</strong>. Make sure your entire team knows who your customers are. Arrange client visits or allow back-office staff to join customer calls.</li>
</ul>
<h2><strong>Tips for hiring teams in emerging markets </strong></h2>
Hiring is the only challenge that gets more difficult with time: as roles become more complex and as an organization takes on more work, hiring the right candidates becomes harder and inhibits companies’ ability to scale.

This is a challenge for startups everywhere — but it’s particularly pronounced in emerging markets, where top talent can be difficult to recruit and retain. Here are some of the ways our CEOs address this:
<ul>
 	<li><strong>Always be recruiting</strong>. Extend your talent pipeline as far as it can go, because even if the seats aren’t open today, they will be soon.</li>
 	<li><strong>Treat recruiters as business partners</strong>. Ultimately, you’re both working to build a better organization.</li>
 	<li><strong>Value the right attitude and generalists over specialists</strong>. Specific skill requirements can change over time, so it’s better to get someone who can adapt to multiple future needs. And attitude should count as much as skills: <a href="https://news.harvard.edu/wp-content/uploads/2015/11/16-057_d45c0b4f-fa19-49de-8f1b-4b12fe054fea.pdf">Harvard Business School</a> found that avoiding toxic employees is worth twice as much as the returns that top workers produce. Toxic workers also diminish productivity and drive out other employees.</li>
</ul>
<h2><strong>Corporate culture results from CEOs’ choices and behavior</strong></h2>
[caption id="attachment_18217" align="alignright" width="500"]<img class=" wp-image-18217" src="https://content.accion.org/wp-content/uploads/2019/04/Fintech-For-Inclusion-Global-Summit-2-1-1024x678.jpg" alt="" width="500" height="331" /> <em>CEOs’ actions and choices have an outsized role in creating corporate culture.</em>[/caption]

High-performing organizations have great corporate culture: it gives them a competitive advantage.

CEOs’ actions and choices have an outsized role in creating corporate culture; the values they exhibit and the behaviors they reward shape an organization’s character:
<ul>
 	<li><strong>Explain what you believe. </strong>Every organization should explain its values in concise, memorable language. Those values should factor into hiring new employees or evaluating current employees.</li>
 	<li><strong>Cultivate psychological safety. </strong>The feeling that a team “is safe for risk-taking” was the biggest contributor in <a href="https://rework.withgoogle.com/print/guides/5721312655835136/">Google's</a> review of successful team dynamics. Psychologically safe teams brought in more revenue and were twice as effective as ‘unsafe’ teams.</li>
 	<li><strong>Develop <a href="https://www.accion.org/hiring-and-talent-employee-value-proposition">employee value propositions</a></strong>. These identify why a prospective employee should work for a given startup. They elevate the organization’s mission and explain how an employee could grow from their work at a particular company.</li>
</ul>
<h2><strong>How to help your team get through a crisis </strong></h2>
One session on overcoming adversity resonated with many in the room. Founder-CEOs routinely face any number of crises; professionally, there’s nothing harder than trying to lead your team through a major challenge.

But it’s something that every entrepreneur needs to be prepared for. And while there’s no one way to overcome adversity, CEOs did reflect on a few measures that helped:
<ul>
 	<li><strong>Keep the right people with you.</strong> Rely on the team you trust to help turn the ship around. Promote them if that’s what it takes to retain them.</li>
 	<li><strong>If bad news is coming, you want to be the one sharing it.</strong> Don’t let someone else tell your story. This is true for your investors, employees, and family.</li>
 	<li><strong>It’s important to be honest and transparent.</strong> In good times — and especially in bad times — let people know what’s really happening. That said, you don’t need to bring everyone through every twist and turn. Focus on the most important issues and communicate them well.</li>
 	<li><strong>Protect your health. </strong>Founders emphasized basic self-care, including exercise, sleep, cutting alcohol and sugar, and seeking advice from mentors.</li>
</ul>
By focusing on our users and understanding their needs, behaviors, and goals, we’re more likely to create valuable financial products and services. And by building teams that know their end-clients, founder-CEOs can create impactful and successful companies.

That’s easier said than done. But after meeting and speaking with so many extraordinary people who are all working so hard to pursue a common vision and change the world, I’m more optimistic than ever about our chances.

<em>Many thanks to CGAP, Catalyst Fund, Triodos, Citi Inclusive Finance, Mastercard Foundation, and Community Investment Management for helping to convene the Inclusive Fintech CEO Forum.</em>

The fintech event that puts people first

Today, <a href="https://www.newsdeeply.com/womensadvancement/articles/2018/04/19/gender-gap-in-bank-account-ownership-hasnt-shifted-in-seven-years">980 million women</a> around the world still don’t have access to financial services. And even though that number is lower than it was four years ago, the financial inclusion gap between men and women globally has nonetheless <a href="https://www.newsdeeply.com/womensadvancement/articles/2018/04/19/gender-gap-in-bank-account-ownership-hasnt-shifted-in-seven-years">stayed steady at 7 percentage points since 2011.</a> Why does this gap persist and how can we move the needle on closing it? At <a href="https://fof.fmo.nl/gender-finance-panel">FMO’s Future of Finance Conference</a> last month, I had the opportunity to ask these questions to experts in the field including Saskia Vossenberg of FMO, Elisabeth Ballreich of <a href="https://www.womensworldbanking.org/">Women’s World Banking</a>, Mulenga Silwamba of <a href="http://www.cavmont.com.zm/">Cavmont Bank</a>, and Anna de Lanoy Meijer of <a href="https://www.anna-nina.nl/en/">Anna + Nina.</a>

How can we begin to eliminate the gender gap? All of the panelists agreed that financial institutions aren’t doing enough to understand the banking needs of female clients. As Elisabeth put it, “most traditional banking products weren’t specifically designed with women’s needs and constraints in mind.” In an example given by Mulenga, creditors in Zambia often ask women for proof of address to open a line of credit, disregarding the fact that the household’s official documentation is typically in the name of their husbands. Elisabeth also noted that being approached by male bank agents has been found to dissuade female clients from using financial products.

Women themselves are not a homogeneous group. “Female entrepreneurs come in many colors, shapes, sizes, and backgrounds,” Saskia emphasized, and more effort is needed to better segment and understand the particular needs of female clients. All panelists agreed that first understanding and then building trust with female clients is key to closing the gender gap.

While it has been widely proven and accepted by those in the international development field that investing in women is a critical component to poverty alleviation, the business case for doing so is often not sufficiently understood or accepted by financial service providers. Facing pressure to meet short-term financial returns, bank managers may lack the long-term perspective needed to realize some of the gains that can accrue from reaching more women. The panelists I spoke with were eager to discuss building a more convincing business case for financial service providers.

First of all, some panelists noted that women are often more loyal customers, as demonstrated by higher retention rates than those of men. This is particularly true when their needs are being met with both quality service and appropriate terms and conditions. <a href="https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/02/GSMA-mWomen-Visa_Unlocking-the-Potential_Feb-2013.pdf">A study conducted by GSMA</a> found that women are often loyal customers for businesses that properly meet their needs, providing free word-of-mouth advertising and drawing new customers. As mentioned by Elisabeth, “Women rely a lot on peer-to-peer reviews. One woman recommending a product to another woman is really powerful.”

Mulenga said that in her experience, women are generally more creditworthy than men. She noted that making investments in women is typically less risky because of the many responsibilities women have — they’re more likely to be caretakers in their home and merchants in their communities — and thus less likely to take risky investment decisions themselves. In many African societies, in particular, women actively manage the household finances — and yet <a href="https://www.newsdeeply.com/womensadvancement/articles/2018/04/19/gender-gap-in-bank-account-ownership-hasnt-shifted-in-seven-years">45 percent remain unbanked</a>. This leaves a large portion of a market untapped, a population that if better understood could offer significant growth prospects for a financial service provider.

These reflections only begin to define the business case for investing in women, but more efforts are undoubtedly needed to see meaningful change. At Accion, we’re committed to working with financial service providers to find innovative solutions to the financial inclusion gender gap. Closing this gap will involve engaging with women in their local communities, bringing them into the conversation, and building trust. One institution that has made strides to close this gap is <a href="http://www.swadhaar.com/">Swadhaar</a>, a <a href="https://www.accion.org/her-dream-seemed-impossible-but-she-persisted-and-750000-indians-benefited/">business correspondent serving the unbaked in India</a>. The business makes it a priority to <a href="http://www.swadhaar.com/wp-content/themes/swadhaar/SwadhaarLessons_Learn_Brief_Final.pdf">gather feedback from women entrepreneurs</a> and refine products and processes to attract new and maintain current female clients.  Only with this type of relationship-based business model will we drive account access and usage among women and create a financial system that works for all people.

<em><a href="https://www.accion.org/bio/robin-brazier">Robin Brazier</a> contributed to this article.</em>

How can we close the gender gap in financial services?

<div class="byline"><em class="markup--em markup--p-em">Recently, we traveled to Myanmar to see for ourselves how the arrival of technology is changing the long-isolated country. We followed Aye Aye Myint, a loan officer at our partner DAWN Microfinance, as she made her rounds checking in with clients. Watch the video above to see how her work is already being transformed by new systems in place in her office, and then read on for more from our Yangon-based colleague Jason Loughnane about the next steps in bringing the benefits of digital finance to the women entrepreneurs DAWN serves.</em></div>
<div class="byline">
<p id="67d5" class="graf graf--p graf-after--p">The future of finance in Myanmar is digital. The population has rapidly adopted smartphones, while the economy continues to operate almost entirely in cash. The mobile money ecosystem, while still nascent, is attracting attention from investors and journalists alike. Accion believes that mobile money will enable microfinance providers to substantially increase financial inclusion in Myanmar, and we will continue supporting our partner, DAWN Microfinance, to realize the substantial benefits of this digital transformation.</p>
<p id="68d0" class="graf graf--p graf-after--p"><strong class="markup--strong markup--p-strong">DAWN’s Founding and Accion’s Involvement to Date</strong></p>
<p id="f546" class="graf graf--p graf-after--p"><a class="markup--anchor markup--p-anchor" href="https://www.facebook.com/DAWNMicrofinance/" target="_blank" rel="nofollow noopener noreferrer">DAWN Microfinance</a> was founded by <a class="markup--anchor markup--p-anchor" href="https://myanmar.savethechildren.net/what-we-do/livelihoods" target="_blank" rel="nofollow noopener noreferrer">Save the Children Myanmar</a> in 2002 to provide loans to groups of pregnant women, enabling them to afford prenatal care. Over the next 12 years, DAWN grew to become the third-largest microfinance institution in Myanmar, one with a strong reputation for client service and social mission, providing group-guaranteed loans to low-income women running small businesses from their homes.</p>
<p id="44c7" class="graf graf--p graf-after--p">When Accion began working with DAWN in 2014, the institution served just 25,000 clients, had a loan portfolio of approximately $2 million, and employed 60 loan officers across 11 branches. The loan operations process was highly time-intensive: loan officers visited groups of clients each morning to collect weekly loan installments, then spent their afternoons at the branch completing paperwork and manually preparing their “collection sheets” for the next day. New client training, marketing, assessments, and appraisals were reserved for Fridays, when no loan collections or disbursements were scheduled.</p>
<p id="9b2f" class="graf graf--p graf-after--figure">As an investor and partner, Accion worked to overhaul DAWN’s operational efficiency by implementing a basic core banking system that generates daily collection sheets for each loan officer. After twelve months of process design, piloting, training, and implementation, DAWN successfully completed the transition to a computerized portfolio management system, helping to improve loan officer caseloads by more than 30%. In the nearly three years since Accion partnered with DAWN, the company has grown to serve over 94,000 clients with a loan portfolio of almost $15 million, and employs over 200 loan officers across 27 branches.</p>
<p id="e7de" class="graf graf--p graf-after--p">DAWN’s next ambitious project is to use digital financial services to eliminate cash from its lending operations. Loan officers continue to spend at least four hours per day collecting cash installments from borrowers, counting the cash multiple times, and preparing cash disbursements for new clients. DAWN is working with agent networks and mobile money companies to design and test solutions that would reduce time spent managing cash. If successful, this project would enable loan officers to spend considerably more time recruiting and training new clients, conducting more thorough assessments of client businesses, providing financial literacy training to existing borrowers, and working with clients who are struggling to repay their existing loans.</p>
<p id="f6be" class="graf graf--p graf-after--p"><strong class="markup--strong markup--p-strong">Smartphones and Mobile Money</strong></p>
<p id="2d8d" class="graf graf--p graf-after--p">According to the Myanmar Telecommunications Ministry, <a class="markup--anchor markup--p-anchor" href="http://www.mmtimes.com/index.php/business/technology/21466-ministry-puts-mobile-penetration-at-90-percent.html" target="_blank" rel="nofollow noopener noreferrer">over 90 percent of Myanmar adults</a> had a cell phone by the end of 2016 (up from just 7 percent in 2012), with smartphone penetration approaching <a class="markup--anchor markup--p-anchor" href="https://digitalinasia.com/2017/01/09/myanmar-33-million-mobile-users-smartphone-usage-80/" target="_blank" rel="nofollow noopener noreferrer">80 percent of all mobile phones</a>. Meanwhile, according to <a class="markup--anchor markup--p-anchor" href="http://www.lift-fund.org/making-access-possible-map-myanmar-demand-supply-policy-and-regulatory" target="_blank" rel="nofollow noopener noreferrer">UNCDF’s 2013 Making Access Possible Report</a>, only 6 percent of adults use a formal financial institution, and only 30 percent have access to a regulated financial service provider, such as a microfinance institution or credit union. Unregulated moneylenders and pawn shops are the most popular way for poorer Myanmar citizens to access credit. A <a class="markup--anchor markup--p-anchor" href="https://myanmar.savethechildren.net/sites/myanmar.savethechildren.net/files/library/Lives%20on%20Loan_3.pdf" target="_blank" rel="nofollow noopener noreferrer">2015 Save the Children survey</a> of three low-income areas in Yangon found that 85 percent of the population relied on short-term loans, and half of these loans were for food and basic needs. These unregulated sources of credit come at a steep cost — <a class="markup--anchor markup--p-anchor" href="http://www.mmtimes.com/index.php/opinion/19326-maturing-microfinance-in-myanmar.html" target="_blank" rel="nofollow noopener noreferrer">10–20 percent per month for an unsecured loan</a> and 3–5 percent per month if the borrower offers collateral, typically a small piece of jewelry, but pawn shops will also accept the family’s cooking pans. Digital loans, disbursed to a smartphone, can give low-income clients access to credit in cases where they would otherwise be forced to rely on a high-interest moneylender.</p>
<p id="fb58" class="graf graf--p graf-after--p">Simultaneously, Accion is helping DAWN design loan products to reach higher-income microentrepreneurs whose businesses are too large to benefit from a group-guaranteed microloan, but not large enough to qualify for a loan from a commercial bank. Using tested cash-flow analysis tools developed and implemented by Accion’s partner institutions around the world, DAWN will be able to offer uncollateralized loans to higher-value borrowers, enabling them to hire more staff, grow their businesses, and reach more customers. With the right partnership in place, these borrowers may be able to depend entirely on mobile money to transact with DAWN, freeing them to focus on managing their business instead of visiting their bank branch.</p>
<p id="a1a7" class="graf graf--p graf-after--p">The confluence of high smartphone penetration with limited access to financial services presents an ideal proving ground for microfinance institutions and mobile money providers to offer digital financial services to Myanmar’s poor and underserved. In partnership with Myanmar’s emerging mobile money providers, Accion and DAWN Microfinance are working to capitalize on this unique moment in Myanmar’s economic development to ensure that financial services become as ubiquitous as the smartphone.</p>


[caption id="attachment_7848" align="aligncenter" width="1024"]<img class="wp-image-7848 size-large" src="https://content.accion.org/wp-content/uploads/2017/07/Copy-of-_42A5137-1024x681.jpg" alt="The Future of Finance in Myanmar is Digital" width="1024" height="681" /> DAWN loan officer Aye Aye Myint meets with beverage stand operator Daw Yin Yin Htwe[/caption]
<p id="63e5" class="graf graf--p graf-after--figure"><em class="markup--em markup--p-em">We thank FMO, MetLife Foundation, and the Keith V. Kiernan Foundation for their generous support for our work in Myanmar.</em></p>

</div>

The future of finance in Myanmar is digital

<div id="block-system-main" class="block block-system">
<div class="content">
<div class="content-node">
<p align="center"><em>The Accion Frontier Inclusion Fund, managed by Quona Capital, invests in companies that innovate to expand access to financial services to underserved consumers and businesses in</em><em>emerging markets</em></p>

<ul>
 	<li>Three billion people around the world are underserved by the financial sector, with limited or no access to quality savings, credit, insurance, and payments.</li>
 	<li>The Accion Frontier Inclusion Fund aims to address this solvable problem by catalyzing fintech innovations that can radically improve the quality and availability of financial services for the underserved.</li>
 	<li>Alternative credit, payments, small and medium enterprise (SME) finance, and insurtech are among the solutions the Fund aims to accelerate.</li>
 	<li>Global nonprofit Accion, the Fund’s sponsor and anchor investor, brings more than 50 years of experience in harnessing the capital markets to help provide people with the financial tools and services they need to build better lives.</li>
 	<li>Quona Capital – founded by a global team with deep entrepreneurial and investment experience in financial services and technology – is a venture firm specializing in fintech for inclusive finance in emerging markets.</li>
</ul>
<em>WASHINGTON, D.C. – March 5, 2017 –</em>Accion and Quona Capital announced today the final close of the Accion Frontier Inclusion Fund, the world’s first global fintech fund for the underserved. The oversubscribed Fund represents $141M in commitments from an array of leading institutional investors including global insurance companies, investment banks and asset managers, a university endowment, prominent foundations and family offices, as well as development finance institutions. The Fund will focus on emerging markets in sub-Saharan Africa, Latin America, and Asia (with a particular emphasis on India and Southeast Asia) that have demonstrated the greatest potential for inclusive fintech.

“Three billion people are left out of, or poorly served by, the global financial system. The Accion Frontier Inclusion Fund – the world’s first global fintech fund for the underserved – will help address this,” said Michael Schlein, CEO and President of Accion. “The Fund will support innovators using new technologies to help create a financial system that works for everyone. By focusing on both social impact and financial returns, we believe the Fund shows the importance of harnessing the capital markets to solve society’s most challenging problems.”

“The diversity and caliber of investors the Fund has attracted and the capital they have put behind it is an unambiguous validation of our investment thesis and a milestone for both financial inclusion and the impact investing industry,” said Monica Brand Engel, a founding partner at Quona Capital, the Fund manager. “By identifying and supporting the most promising business models, the Fund can produce a demonstration effect that inspires others to pursue inclusive new technologies and compete in traditionally underserved communities.”

The Fund’s anchor investor, general partner, and sponsor is Accion, a global nonprofit committed to creating a financially inclusive world that benefits the three billion financially underserved people failed by the world’s formal economy. Over the last nine years, Accion has made more than thirty impact investments in startups that are finding new ways to meet the financial needs of the underserved. The Fund is managed by Quona Capital, a venture firm focused on inclusive financial technology in emerging markets. The Quona founding team has decades of experience as investors and entrepreneurs in financial services and technology in both emerging and developed markets and is passionate about making a lasting impact through its investments.

To-date, the Accion Frontier Inclusion Fund has invested in:
<ul>
 	<li>Konfio, which uses unique data analytics and an online platform to deliver affordable working capital loans to micro-businesses in Mexico</li>
 	<li>Creditas, an innovative provider of secured home and auto equity loan solutions for the emerging middle class in Brazil</li>
 	<li>Coins, a mobile payments platform leveraging the blockchain to provide a comprehensive suite of services for low income consumers in the Philippines</li>
 	<li>NeoGrowth, the first company to offer card and other electronic payments receivables financing to SMEs in India</li>
 	<li>Yoco, a mobile point of sale and value added service solution for micro and small merchants in Africa, to help expand the acceptance environment for digital payments</li>
 	<li>Invoinet, a reverse factoring platform for small and medium enterprises in Argentina and Brazil</li>
 	<li>Eseye, a global Internet of Things service provider enabling pay-as-you-go asset financing and access to prepaid utilities to underserved consumers in emerging markets</li>
 	<li>IndiaMART, India’s largest B2B listing and transactions platform for SMEs, which is making a strong foray into associated payment and financial solutions</li>
 	<li>CreditMantri, a credit advisory platform in India, utilizing traditional and alternative data to provide consumers enhanced credit profiles and access to improved credit options</li>
</ul>
The pipeline is dynamic and growing. The Fund plans announcements of additional investments in exciting innovators expanding the quality and availability of financial services in emerging markets.

The Fund’s investors include Accion; AXA Impact Fund; Blue Haven Initiative; Calvert Equity Portfolio; the Dalio Foundation; FMO (Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden); Heifer Foundation; IDP Foundation, Inc.; IFC (International Finance Corporation), a member of the World Bank Group; JPMorgan Chase &amp;amp; Co.; The Lemelson Foundation; Mastercard; MetLife; PG Impact Investments; Private Market Impact Fund; Prudential Financial, Inc.; Quona Capital; The Sandy River Charitable Foundation; Skopos Impact Fund; TIAA Investments, an affiliate of Nuveen; Triodos Fair Share Fund and Triodos Microfinance Fund, funds managed by Triodos Investment Management; Wallace Global Fund; and William A. Gee.
<p style="text-align: center">###</p>
&nbsp;

<strong>About Accion Frontier Inclusion Fund and Quona Capital</strong>

The Accion Frontier Inclusion Fund, managed by Quona Capital, is the first global fintech fund for the underserved, investing in innovative financial technology and services companies that promote financial inclusion for the three billion people around the world who are underserved by financial services. Quona Capital is an early growth-stage venture firm focused on financial technology for underserved consumers and businesses in emerging markets. The fund is sponsored by Accion, a global leader in inclusive finance with a rich history of double-bottom line investing, where its impact investments create positive economic and social returns. For further information, visit <a href="http://www.quona.com/">http://www.quona.com </a>and <a href="http://www.accion.org/frontier">http://www.accion.org/frontier</a>.
<p style="text-align: center">###</p>
<strong>Media Contacts:</strong>

Katie Mounts
<a href="mailto:kmounts@accion.org">kmounts@accion.org
</a>+1 202.280.5859

Allison Steitz
<a href="mailto:allison@quona.com">allison@quona.com
</a>+1 858.216.5709

</div>
</div>
</div>

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