Accion Venture Lab

Toolkits and Guides

&gt; Posted by Nancy Widjaja and Maelis Carraro, Accion Venture Lab and BFA

<a href="http://catalyst-fund.org/"><img class="alignright wp-image-24047" style="margin-bottom:5px;border:0 solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2017/08/1-h0i-i3udbpuhq9hi8pyodg2x.png" alt="" width="397" height="74" /></a>When we met Miguel Duhalt, CEO of <a href="https://4uno.org/landing">Comunidad4Uno</a> in Mexico City, he was working day and night to launch a company that sought to change the financial lives of domestic workers. His goal was building a platform that could offer financial services such as insurance, direct payments, and bank account access to low-income domestic workers in Mexico. With Comunidad4Uno, people who employ domestic workers in their homes would be able to sign up for the service and, with a small annual fee, insure their domestic workers and give them access to medical check-ups. They would be able to pay their employees electronically via a smartphone app into a newly-opened bank account. Leveraging technology and the personal relationships between workers and employers, Miguel wanted to formalize access to insurance and other financial services for domestic workers in Mexico.

But to achieve his ambitions, Miguel needed two things: to raise enough capital to take his enterprise off the ground and to validate his idea in the market with more users. Like many other startup founders, he faced a Catch-22. Investors wanted to see traction and a proven business model before endorsing his company, but his small team had a hard time focusing on reaching proof points because they needed to raise capital to keep the lights on. Raising seed funding is particularly challenging in Mexico and many other emerging markets. Moreover, challenging regulatory environments, inefficient infrastructure and connectivity, costly supply chains, and consumer distrust add to the operational difficulties.

So Miguel, like other talented entrepreneurs, needed to find an aligned investor who could look beyond quick financial returns and help meet important milestones to attract institutional funding at a later stage.



Catalyst Fund: Catalyzing investments in inclusive fintech

This is where the <a href="http://www.catalyst-fund.org/">Catalyst Fund</a> came in. Catalyst Fund is a $2 million program of <a href="http://bfaglobal.com/">BFA</a>, funded by the Bill &amp; Melinda Gates Foundation and JPMorgan Chase &amp; Co. <a href="https://www.accion.org/venturelab">Accion Venture Lab</a> is a founding member of the Fund’s Investor Advisory Committee. It aims to help ‘pre-seed’ inclusive fintech startups like Comunidad4Uno address barriers to early venture development, while demonstrating how the financial products and services of these ventures can serve and benefit underbanked customers. Investees receive grants up to $100,000 (no strings attached), tailored technical assistance, and mentoring from a group of impact and mainstream investors.

One year down the road, Catalyst Fund has provided grant funding and technical advice to 10 investees. Investees’ innovative business models range from insurance and payment services in Mexico, to pay-as-you-go gas cooking stoves in Kenya, to a peer-to-peer lending insurance platform for low-income farmers in Ghana, mobile-based micro-credit for middle and low-income households in India, to alternative credit scoring in Chile.

What we learned about how Catalyst Fund best supports startups 

We want to arm our Catalyst Fund investees with the data points they need to prove to their next round of investors that the risks they are being asked to take on are commensurate with potential returns. To do so, we help startups reduce a number of risks typical of early stage ventures, such as value proposition risks, execution risks, financing risks, and technology risks. Of course, developing our approach to technical assistance and mentoring has been a process. We built on initial ideas and continually refined what kind of support was most appropriate. Here is what we learned so far.

There are no cookie-cutter solutions to make startups investment-ready - tailor-made and hands-on support work best in the early days. At the outset, we run through a risk framework to identify which risks the company is facing and how we can best support them. Do they know their customers well enough? Is their technology solid? Is the team capable of executing and working efficiently together? Getting to “key milestones” and reaching proof points means different things for various startups and business models, and they uniquely require myriad resources and support to do so. Some examples of our tailored support include:
<ul>
 	<li>Perfecting the startup’s technology by <a href="http://bfa.works/medium-worldcover">crafting product and service roadmaps</a> and <a href="http://bfa.works/medium-paygo-CTO">sometimes serving as </a><a href="http://bfa.works/medium-paygo-CTO">interim CTOs</a></li>
 	<li><a href="http://bfa.works/medium-escala">Identifying opportunities for behavioral nudges in their customer journeys</a></li>
 	<li><a href="http://bfa.works/medium-destacameML">Testing the performance of machine learning algorithms</a></li>
 	<li><a href="http://bfa.works/medium-worldcover">Building customer service blueprints</a></li>
 	<li><a href="http://bfa.works/medium-trust">Engendering customer trust</a> by integrating elements like transparency and proper data management</li>
</ul>
Startups are better positioned to take advantage of Catalyst if they have already piloted with at least one client and generated initial data for analysis. We help startups run lean startup experiments as early as possible to validate learning, even with very rudimentary value propositions. We’ve worked with companies to identify best market fit for their product or conduct early customer discovery to refine their core offering and communication strategy. With Comunidad4Uno, for example, we visualized core customer personas, building each customer journey and tweaking the product, marketing, and user experience for each persona.

B2C and B2B startups exhibit different operational models, requiring different technical support and knowledge resources. Creative partnerships are emerging that leverage the respective strengths of incumbents and innovators. But companies need support on how to best forge successful partnerships. Accion Venture Lab created a primer to advise B2B startups on forming partnerships with banks (see <a href="https://www.accion.org/venturelab/resources">“Enterprise Sales for Fintech Products and Services”</a>). For investee Escala Educación, which provides long-term savings plans for higher education tailored to lower and middle income individuals in Colombia, we helped think through what financial services partner would be best for a painless customer experience and for their long-term business goals. For Atikus, we helped build an ROI simulator to show microfinance banks in Rwanda the value of using the Atikus loan management platform and worked on KPIs to track bank performance over time.

Given the common challenges faced by many of our startups, we are now also packaging what we learned into practical <a href="https://www.cftoolkit.org/">toolkits designed for early-stage companies</a>. These toolkits help management teams think through how to build trust with low-income customers, how to manage their internal and external risks and how to achieve product-market fit in emerging markets.

So, has it worked? Has Catalyst Fund’s combination of philanthropic capital and TA been enough to make our startups investment-ready?

<img class="alignright wp-image-24062" style="border:0 solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2017/08/pull-quote-v-21.png" alt="" width="340" height="284" />The $100,000 grant seed funding, coupled with the tailored technical support, makes a big difference in the trajectory of a startup at this early stage. It helps keep the lights on and allows the management team to focus on running the startup and gaining traction. Catalyst Fund’s investees have been using the capital to reach important milestones, ranging from hiring a capable sales team to financing data collection efforts or pilot projects. While we’re flexible about how the funding is spent, we fully expect each investee to have a clear, transparent plan on the use of the grant capital. Moreover, funding is connected to certain milestone achievements, in conjunction with the TA plan.

And some startups have quickly received follow-on investments. <a href="https://www.destacame.cl/">Destácame</a>’s successful achievement of milestones through Catalyst Fund eventually convinced Accion Venture Lab to invest in a seed round. ESCALA Educación was able to <a href="https://www.crunchbase.com/organization/escala-educacion#/entity">close a seed round led by Mountain Nazca</a>, a prominent Latin American venture capital firm. <a href="http://catalyst-fund.org/news-home/2017/4/25/paygo-energy-cooking-on-your-terms">PayGo Energy</a> closed a round with a key investor in Kenya.

However, there is still a persistent gap in the funding continuum for these startups after they graduate from Catalyst Fund. Currently only a limited number of seed stage fintech investors exist, underlining the need for more creative ways to bring funding into this space. Commercial investors often wait until they can make bigger ticket investments and startups, quickly find themselves back in a dire funding environment. To help address this issue, Catalyst Fund has created the <a href="http://catalyst-fund.org/circle-of-investors">Circle of Investors</a>, a group of investors who follow the startups’ progress and are matched with firms that fit their investment criteria. Some 19 mainstream (e.g., Index Ventures) and impact investors (e.g., Goodwell) have already joined this group and we hope to see many introductions turn into real investments.

Measuring the impact of our kind of model on a startup’s trajectory is not easy. Catalyst Fund is not a typical accelerator and there are no directly relevant benchmarks. While Catalyst Fund can certainly reduce a number of risks for a company on its growth journey, we don’t solve all of them. But after over a year, we are ever more convinced that against the backdrop of an investment continuum, de-risking early-stage startup trajectories is critical for attracting investors and capital to inclusive fintech. For now, we’ll continue to unpack the indicators and feedback sessions about how Catalyst Fund makes a difference in the life of the startup and their likelihood to thrive.

Visit our <a href="https://medium.com/catalyst-fund">Catalyst Fund blog</a> or sign up for our mailing list to follow the progress of our investees!

<a href="https://www.accion.org/content/venture-lab-team">Nancy Widjaja</a> is the Principal Manager of Knowledge and Industry Engagement at Venture Lab, leading the team’s efforts in identifying, analyzing, and articulating key trends and lessons emerging from the work of Venture Lab and our portfolio, as well as in engaging with the industry and stakeholders to amplify the reach and scale of our efforts in service of positive and innovative sector development.

<a href="http://bfaglobal.com/people/maelis-carraro/">Maelis Carraro</a> is an Associate at BFA. She manages Catalyst Fund, an innovative fintech fund supporting early stage inclusive fintech startups with grant capital, mentorship and technical advisory services. Her work focuses on exploring innovative business models to further financial inclusion, supporting early startups to reach scale and advising financial institutions on alternative delivery channels, digital processes and better product design for low-income customers.

Have you read?

<a href="https://cfi-blog.org/2017/02/27/kopo-kopo-building-on-the-rails-of-mobile-money-in-kenya/">Kopo Kopo: Building on the Rails of Mobile Money in Kenya</a>

<a href="https://cfi-blog.org/2016/08/29/goldilocks-and-the-just-right-credit-market/">Goldilocks and the "Just Right" Credit Market</a>

<a href="https://cfi-blog.org/2016/03/15/mexico-financial-diaries-reveal-how-households-use-credit-to-stretch-budgets-and-bridge-gaps-in-income/">Mexico Financial Diaries Reveal How Households Use Credit to Stretch Budgets and Bridge Gaps in Income</a>

Catalyst Fund: Lessons on Getting Early-Stage Fintech Startups Investment-Ready

Agent Banking

Fintechs

PayGo

Blog Post

The following post was <a href="http://blogs.accion.org/features/7-fintech-trends-to-watch-in-2018/">originally published</a> on the Accion blog.
We’re in the middle of a fintech boom that <a class="markup--anchor markup--p-anchor" href="https://medium.com/accion/trends-that-may-change-the-world-c00f4e500a8c" target="_blank" rel="noopener noreferrer">could change the world</a>. As a seed-stage investor in fintech for the underserved, Accion Venture Lab continues to see innovative startups increasing access to, reducing the cost of, or improving the quality of financial services for underserved individuals and small businesses around the world.
As we kick off a new year, we’re particularly excited about seven areas of startup-led innovation.

<h4>Digital neobanks</h4>
[caption id="attachment_24930" align="aligncenter" width="616"]<img class="wp-image-24930" style="border: 0 solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2018/01/appsm_mockup2.jpg" alt="" width="616" height="411" /> SmartMEI is a digital neobank serving small businesses in Brazil[/caption]
In the last few years, we’ve seen the emergence of a number of digital neobanks. Neobanks offer a user-friendly digital interface and a platform for financial services without maintaining their own banking licenses. With a focus on user experience and digital applications, neobanks stand to offer faster and better service to the underserved. Moving forward, neobanks will need to provide both a compelling product for a targeted customer segment and a suite of offerings that go beyond basic accounts or credit cards to retain customers and improve unit economics. Innovators in this space include <a class="markup--anchor markup--p-anchor" href="http://nowmoney.me/" target="_blank" rel="nofollow noopener noreferrer">NOW Money</a>, which offers migrant workers in the UAE a platform to more efficiently transfer remittances and access to other products and services over time, and <a class="markup--anchor markup--p-anchor" href="https://www.smartmei.com.br/" target="_blank" rel="nofollow noopener noreferrer">SmartMEI</a>, which offers small businesses in Brazil a free tax tool and access to a broader set of financial services.

<h4>Next gen small business finance solutions</h4>
Around the world, micro, small, and medium enterprises (MSMEs) struggle to access capital. Estimates suggest that <a class="markup--anchor markup--p-anchor" href="https://www.ifc.org/wps/wcm/connect/4d6e6400416896c09494b79e78015671/Closing+the+Credit+Gap+Report-FinalLatest.pdf?MOD=AJPERES" target="_blank" rel="nofollow noopener noreferrer">200 to 245 million formal and informal small businesses</a> either don’t have a loan or have one but are still constrained by their access to financing. Startups have been developing creative ways to acquire, underwrite, and fund these businesses. Some of the most innovative models today are embedding themselves into supply chains and working with a partner in that supply chain to identify MSMEs in need of financing and to obtain existing data that can support credit decision-making. These companies include <a class="markup--anchor markup--p-anchor" href="http://www.tiendapago.com/en/" target="_blank" rel="nofollow noopener noreferrer">Tienda Pago</a>, which partners with major consumer good distributors in Peru and Mexico to extend short-term working capital to small stores for inventory purchases, and <a class="markup--anchor markup--p-anchor" href="https://lidya.co/" target="_blank" rel="nofollow noopener noreferrer">Lidya</a>, which works through partners in Nigeria to provide invoice discounting and supply chain financing to small businesses.

<h4>Insurtech for the underserved</h4>
Low-income consumers in emerging markets need insurance products to manage and mitigate financial risks, but serving those customers poses significant challenges — from cost-effectively reaching and educating consumers, to accurately assessing and pricing risks, to efficiently managing claims. Startups can play a critical role in solving those challenges with products intended to address specific risks for underserved communities, new distribution channels to reach these populations, and new streams of data to more effectively assess and price risk. Insurtech innovators include <a class="markup--anchor markup--p-anchor" href="https://lumkani.com/" target="_blank" rel="nofollow noopener noreferrer">Lumkani</a>, which sells a low-cost heat detector bundled with insurance to households in South African informal settlements that protect against loss of life, shelter, and assets, and <a class="markup--anchor markup--p-anchor" href="https://togarantido.com.br/" target="_blank" rel="nofollow noopener noreferrer">Togarantido</a>, which serves as an online-based insurance broker focused on the underserved in Brazil.

<h4>Financial services for smallholder farmers</h4>
Smallholder farmers remain notoriously difficult to reach and are often considered high-risk clients since their incomes are tied to unpredictable harvests. An estimated <a class="markup--anchor markup--p-anchor" href="https://www.raflearning.org/post/inflection-point-unlocking-growth-era-farmer-finance" target="_blank" rel="nofollow noopener noreferrer">270 million smallholder farmers around the world face a financing gap of $170 billion</a>. Innovators addressing this need can provide real value — by helping farmers finance irrigation pumps, combat pests, or address climate risks. Startups in this space include <a class="markup--anchor markup--p-anchor" href="https://apolloagriculture.com/" target="_blank" rel="nofollow noopener noreferrer">Apollo Agriculture</a>, which leverages satellite imagery, data science, and mobile money to finance fertilizer and seeds needed to increase crop yields, and <a class="markup--anchor markup--p-anchor" href="https://www.pula-advisors.com/" target="_blank" rel="nofollow noopener noreferrer">Pula</a>, which works with large seed and fertilizer suppliers across Africa to bundle crop insurance in with product purchases.

<h4>Asset finance</h4>
[caption id="attachment_24931" align="aligncenter" width="615"]<img class="wp-image-24931" style="border: 0 solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2018/01/kn_pg_2016_25.jpg" alt="" width="615" height="410" /> The Paygo team at work on their smart meter for cooking gas[/caption]
Individuals and small businesses require financing for assets like medical equipment, smartphones, and solar home systems to increase efficiency and improve lives. One promising innovation in this space is pay-as-you-go financing, which allows consumers and business owners to make small upfront payments and regular “top-ups,” usually sent via mobile money. The model has already led to a rapid expansion in solar home systems across emerging markets. Other scalable models for asset financing leverage new distribution and payment approaches like layaway solutions, leasing models, and peer-to-peer transfers. <a class="markup--anchor markup--p-anchor" href="http://paygoenergy.org/" target="_blank" rel="nofollow noopener noreferrer">PayGo Energy</a> is a promising company in this space; its pay-as-you-go financing model enables low-income customers in Kenya to pre-pay for cleaner and more affordable cooking gas.

<h4>All-digital consumer lending</h4>
Recent years have seen digital consumer lenders emerge and scale by using simple apps to collect and analyze customer data to provide access to credit for underserved populations. The speed and accessibility of digital platforms enable credit access for consumers who are underserved by traditional lenders and who might otherwise be too costly to serve. Innovators could add value to the sector with new approaches to credit underwriting and consumer engagement that lower defaults and improve retention — two of the critical challenges to the app-based lending model. <a class="markup--anchor markup--p-anchor" href="http://smartcoin.co.in/" target="_blank" rel="nofollow noopener noreferrer">SmartCoin</a> offers new engagement tools alongside its mobile lending platform to better understand and serve its customers in India, and <a class="markup--anchor markup--p-anchor" href="https://www.tezfinancialservices.pk/" target="_blank" rel="nofollow noopener noreferrer">Tez</a> provides an all-digital banking platform with a full suite of products to low-income consumers in Pakistan.

<h4>Consumer financial health</h4>
In 2016, the Federal Reserve revealed a concerning statistic about financial health in the U.S.: 46 percent of Americans said they could not pull together <a class="markup--anchor markup--p-anchor" href="https://www.washingtonpost.com/news/wonk/wp/2016/05/25/the-shocking-number-of-americans-who-cant-cover-a-400-expense/?utm_term=.893f79e72c4c" target="_blank" rel="nofollow noopener noreferrer">$400 to cover an emergency</a>. Startups are providing solutions that help consumers manage their day-to-day financial lives and rebound from shocks. There is significant potential for innovators to leverage behavioral science to design new solutions such as clever nudges, useful automation, gamification, or bundling across different financial products. Innovators in this space include <a class="markup--anchor markup--p-anchor" href="https://www.lendstreet.com/" target="_blank" rel="nofollow noopener noreferrer">Lendstreet</a>, which focuses on financial health by providing U.S. consumers a platform to restructure and refinance their distressed debt and rebuild their credit, and <a class="markup--anchor markup--p-anchor" href="https://www.destacame.cl/" target="_blank" rel="nofollow noopener noreferrer">Destacame</a>, which empowers users in Mexico and Chile with control of their data to build their financial capabilities and access better financial products.
Each of these areas of startup-led innovation offers significant potential for both social impact for underserved consumers and financial profit in 2018. We’re excited to see what’s next.
Image credits: Accion

Have you read?

<a href="https://cfi-blog.org/2017/02/27/kopo-kopo-building-on-the-rails-of-mobile-money-in-kenya/">Kopo Kopo: Building on the Rails of Mobile Money in Kenya</a>

<a href="https://cfi-blog.org/2017/08/28/catalyst-fund-lessons-on-getting-early-stage-fintech-startups-investment-ready/">Cataylst Fund: Lessons on Getting Early-Stage Fintech Startups Investment-Ready</a>

<a href="https://cfi-blog.org/2017/07/31/how-financial-institutions-and-fintechs-are-partnering-for-inclusion-lessons-from-the-frontlines/">How Financial Institutions and Fintechs Are Partnering for Financial Inclusion: Lessons from the Frontlines</a>

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7 Fintech Trends to Watch in 2018

Apollo Agriculture

Lidya

Pula

Alternative Data

Credit

Financial Health

Impact Investing

Insurance

Insurtech

MSME/SME Finance

Neobanks

Refugees and Migrants

Remittances

Smallholder Farmers

The following post was <a href="http://blogs.accion.org/fin-tech/kopo-kopo-mobile-money-kenya/">originally published</a> on the Accion blog.

The <a href="https://soundcloud.com/accioninternational/007-kopo-kopo-and-building-on-the-rails-of-mobile-money-in-kenya">seventh episode of VentureKast, Accion Venture Lab’s podcast series</a>, is a conversation between host Vikas Raj and Ken Kinyua, CEO of <a href="http://kopokopo.com/">Kopo Kopo</a>, at Venture Lab’s Washington, D.C. office.

Kopo Kopo began as a digital platform to enable small merchants in Kenya to accept digital payments, primarily for M-Pesa. When the company launched in 2012, the vast majority of mobile money transfers on M-Pesa were between individuals. Kopo Kopo <a href="https://www.accion.org/content/bridging-small-business-credit-gap-through-innovative-lending">addresses this challenge</a> by providing a merchant acquisition platform and proprietary application program interface for mobile money systems, enabling merchants to accept mobile money payments.

Kopo Kopo now leverages its digital footprint and understanding of customers’ businesses to provide merchants with <a href="http://blogs.accion.org/fin-tech/kopo-kopo-fintech-small-business-owners/">unsecured cash advances called Grow</a>. Kopo Kopo also provides merchants with a range of customer relationship management data tools to help better manage, track, and segment transactions across their business and to launch loyalty campaigns with their clients. The company’s story demonstrates how startups evolve to meet demand, and how other financial services products, like credit, can be built on top of payments infrastructure.

In this episode, Ken, with decades of experience in the Kenyan banking system under his belt, shares his story on how he made the jump from leading structured and established companies to managing a growing startup. Ken also shares his insights on the Kenyan digital finance space and his vision for Kopo Kopo as Kenya’s economy continues to grow.

Have you read?

<a href="https://cfi-blog.org/2014/11/05/accion-venture-lab-responds-to-the-great-competition-and-innovation-deficit/">Accion Venture Lab Responds to "The Great Competition and Innovation Deficit"</a>

<a href="https://cfi-blog.org/2016/02/02/tune-into-venturekast/">Tune into VentureKast</a>

<a href="https://cfi-blog.org/2015/04/16/picking-winners-in-the-great-remittance-disruption/">Picking Winners in the Great Remittance Disruption</a>

Kopo Kopo: Building on the Rails of Mobile Money in Kenya

Kopo Kopo

Kenya

Mobile Banking

&gt; Posted by Jeffrey Riecke, Communications Specialist, CFI

<img class="alignright size-full wp-image-21507" src="https://centerforfinancialinclusionblog.files.wordpress.com/2016/06/pay-bills.png" alt="" width="300" height="150" />This morning I had the luxury of splitting an Uber with my girlfriend for our to-work transportation. Neither she nor I are affluent by United States standards, but I would say we’re relatively financially healthy. Most months, our expenses like rent, food, medical bills, and student loans are low enough compared to our incomes that we have money left over for things like Uber rides, dinners out, and the occasional vacation. We have formal financial products and understand them well. Financial health for us means the combination of our financial flows and our financial products positions us for financial stability in the immediate and long-term, even as we grow older and our financial demands dramatically change.

Building financial health, for me, requires attention to my day-to-day financial activities that help build my resilience and allow me to take advantage of opportunities. It’s having savings quietly accumulating for a rainy day or for that bicycle purchase. It’s having access to loans that help if I want to go back to school, buy a house, or start a business. It’s the ability to pay up when an emergency visit to the hospital is necessary, and it’s the confidence that if my house is broken into I can replace my possessions.

My own financial health is very much related to the unique day-to-day financial needs, opportunities, and emergencies that exist in my life. Someone who is unemployed, or older, or supporting a child, or enrolled in school would have a much different assessment of their own health. Similarly, someone in a low or middle income country—where the Center for Financial Inclusion focuses most of its attention—would have different financial needs and therefore different financial health. Despite these differences, however, the thing I’ve noticed is that many of the big financial issues around the world are the same. As part of the Center for Financial Service Innovation’s (CFSI) <a href="http://www.cfsinnovation.com/finhealthmatters/">financial health blog contest</a>, I wanted to offer some observations along these lines.

Whether you’re in the United States or elsewhere, being financially healthy means having credit options that don’t carry scarily big strings attached. This is something I see in my own neighborhood. In the United States, most households have a bank account, but roughly <a href="https://www.whitehouse.gov/sites/default/files/docs/20160610_financial_inclusion_cea_issue_brief.pdf">20 percent</a> of these households are underbanked, meaning they have to resort to informal financial services for some of their needs. The payday loan industry in the United States, for example, has <a href="https://cfi-blog.org/2016/06/02/critical-regulation-the-consumer-financial-protection-bureaus-new-rules-on-payday-loans-and-short-term-credit/">grown robustly</a> in recent years, and is known for high interest rates and fees that trap borrowers into cycles of debt.

As an American, I’m constantly exposed to a barrage of advertisements for financial service providers including payday lenders and alternative financers. In that Uber ride this morning my girlfriend and I heard an ad on the radio for a rapidly-issued loan product. This spurred a conversation between she and I on the prominent U.S. mortgage lending company Quicken Loans. If their name isn’t enough to give you pause, I’m sure their <a href="https://www.youtube.com/watch?v=QlRm6Y5iVfw">Super Bowl spot</a> this past January is. <a href="http://blogs.accion.org/features/6433/">In the words</a> of Accion Venture Lab’s Amee Patel and Paul Breloff, “this ad basically turned the biggest household financial decision – i.e., whether to get a mortgage or home equity line of credit – into a Pavlovian-style autonomic response: ‘Push Button. Get Mortgage.’”

One might posit that this is an ill-conceived though not problematic advertisement as the country has surely wised up since the 2008 global financial crisis, but as only <a href="http://www.wsj.com/articles/get-ready-to-be-told-you-dont-know-money-1457321010#livefyre-comment">57 percent</a> of Americans are able to pass a basic financial literacy test, and the <a href="https://cfi-blog.org/2015/02/04/keeping-score-the-client-protection-principles-vs-the-u-s-subprime-auto-loan-market/">U.S. sub-prime auto loan market</a> is looking dangerously familiar to the pre-’08 mortgage market, it’s hard to feel comfortable with the fact that Quicken Loans is the name of the <a href="http://www.theqarena.com/">arena</a> where the recently crowned Cleveland Cavaliers NBA team plays, if not for Quiken Loans practices then for the flippancy in which they discuss mortgages.

On the whole, the average American household has <a href="https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/">over $15,000</a> in credit card debt.

In the United States and around the world, financial health means being able to make informed decisions to effectively navigate the financial services landscape and maintain an appropriate level of debt.

But I’d love to hear – what does financial health mean to you? Let us know in the comments.

Have you read?

<a href="https://cfi-blog.org/2016/04/12/a-change-in-behavior-innovations-in-financial-capability/">A Change in Behavior: Innovations in Financial Capability</a>

<a href="https://cfi-blog.org/2016/06/02/critical-regulation-the-consumer-financial-protection-bureaus-new-rules-on-payday-loans-and-short-term-credit/">Critical Regulation: The Consumer Financial Protection Bureau's New Rules on Payday Loans and Short-Term Credit</a>

<a href="https://cfi-blog.org/2015/06/09/considerations-for-the-pursuit-of-financial-inclusion/">Considerations for the Pursuit of Financial Inclusion - Beyond Account Access</a>

What Financial Health Means to Me

Consumer Credit

Financial Capability

Housing Finance

Risk Management

<a href="http://www.fi2020week.org/"><img class="alignright wp-image-19409" style="border: 0 solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2015/09/fi2020-week-logo.png" alt="" width="350" height="141" /></a>

 

Last week, <a href="http://www.fi2020week.org/">FI2020 Week</a> created a global conversation on the key actions needed to advance financial inclusion, grounded in the findings of the recently launched <a href="http://www.fi2020progressreport.org/">FI2020 Progress Report</a>. From November 2-6, 2015, stakeholders around the world participated in more than 30 events and shared their voices over social media, with #FI2020. As part of the week, global financial inclusion leaders offered calls to action. We started to provide highlights, but found that every single contributor had an important perspective to add, so this post includes all of their voices.

If there were any doubts about the potential to achieve global financial inclusion, it would be dispelled by the passion and sense of opportunity in the <a href="http://www.fi2020week.org/calls-to-action/">calls to action</a> that were posted last week as part of <a href="http://www.fi2020week.org/">FI2020 Week</a>. A visionary tone was set by the inaugural posting by Ajay Banga of MasterCard, who declared that “financial inclusion is both economic and social inclusion and necessary for the future well-being of our planet.” Jean-Claude Masangu Mulongo, former Governor of the Central Bank of the Democratic Republic of the Congo, draws the link between financial inclusion, economic growth, and poverty reduction, while also—appropriately, given his role--noting the link to financial stability. Yves Moury of Fundación Capital heightens the urgency by stating that “poverty is the greatest scandal of our times,” and Martin Burt of Fundación Paraguaya adds that “poverty elimination must be the endgame of all financial inclusion strategies.”

This strong sense of social mission comes out in a call from Dr. William Derban of Fidelity Bank Ghana to “leave no one behind” in the march toward inclusion. Michael Miebach of MasterCard also talks about meeting the needs of all members of society, including women, and Bindu Ananth of IFMR Trust mentions smallholder farmers as another group that is often excluded. In light of breakthroughs in technology, Sonja Kelly of the Center for Financial Inclusion urges us to reach out to those who are traditionally excluded from technology, and not just early adopters. As Larry Reed of the Microcredit Summit Campaign puts it, “We need to approach the challenge with the end in mind, designing a system that can sustainably reach clients in the most remote areas and who transact in the smallest sums.”

For these leaders, the case for financial inclusion is clear—but Tom Sanderson of BBC Media Action, who also chairs the Financial Inclusion Forum in the U.K., believes the case needs to be made more strongly in countries where inclusion is low. He suggests an intensive public service broadcasting campaign to help raise awareness among consumers and build their trust.

But what do we mean by inclusion? Gloria Grandolini of the World Bank Group reminds us that a transaction account must be a gateway to other services – savings, insurance, and credit. It’s clear to all of the contributors that these services will be facilitated by technology. Michael Schlein of Accion encourages “experimentation and innovation in order to harness new digital technologies,” and a number of leaders call for a focus on technological innovations that can make a difference, such as biometrics (Rupert Scofield and Andrée Simon of FINCA); national identification systems (Omokehinde Ojomuyide of MasterCard/Nigera, Shamina Singh of MasterCard’s Center for Inclusive Growth, and Prabhat Labh of MasterCard Foundation); and last mile interfaces of mobile phones and agents. Daniel Monehin and Solana Cozzo of MasterCard focus attention on the risks of cash to customers and the great potential realized by going cash-free, which also resonates with the push to get smart about G2P payments, especially social benefits (Mark Elliott and Shamina Singh of MasterCard).

But Gabriela Zapata cautions that “The gush of now widely adopted technologies must be combined with a deeper understanding of low-income people’s financial lives, needs and desires so that client centricity is woven into financial product design and supply.” Stephen Kehoe of Visa frames this as an issue of delivering value: “If we are going to get to scale and sustainability, we must continue to innovate to deliver value that works for all stakeholders – in convenience, in affordability, in products and in reliability.” Likewise, Bindu Ananth of IFMR Trust calls for a “relentless focus on customers and customer needs” and Solana Cozzo talks about the need to bolster the usability of accounts. Alex Kreger of UX Design Agency says the key is facing the user and focusing on the user experience. Elisabeth Rhyne of the Center for Financial Inclusion makes a similar point about quality and usage, emphasizing that, amid the rush to scale, the financial inclusion sector must re-focus on quality and value for the customer.

But who is the financial inclusion sector? Perhaps the most striking theme in the calls to action was the need for partnerships across the diversity of stakeholders – including commercial banks, insurance agencies, microfinance institutions, mobile network operators/telcos, non-profits (international and local NGOs), multilateral development agencies, regulators, governments, national policy-makers, global bodies, and financial technology (fintech) start-ups, delineated by Paul Breloff of Venture Lab as including “upstart new entrants in mobile payments, alternative credit scoring, digital MSME finance, automated engagement platforms, and financial capability.” (Others calling for a focus on partnerships and collaboration, especially to reach last mile customers, include Ajay Banga, Louise Holden, Carlos Montaño and Daniel Monehin of MasterCard, Tim Adams of the Institute of International Finance, Dr. William Derban of Fidelity Bank Ghana, Nkosilathi Moyo of VisionFund Zambia, Yves Moury of Fundación Capital, Liza Guzmán of Accion/Latin America, Elisabeth Rhyne of the Center for Financial Inclusion, Andrée Simon of FINCA, and Sergio Navajas of the Inter-American Development Bank.)

At the same time, informal or semi-formal services still have their place. Dr. Man B. Bishwakarma of Jana Utthan Community Bank in Nepal calls attention to community-owned microfinance – known as community banking – while Prabhat Labh adds a note about the role informal savings groups can play, and Bunmi Lawson of Accion/Nigeria sees the potential for “microfinance to punch above its weight.”

There was also a call to broaden customers’ networks, with Juan Alberto Almonacid of Accion reminding us of the importance of small-scale workers getting access to markets with quality goods and services, while Jorge Ortega of Visa/Latin America and the Caribbean says that merchants are a forgotten piece of financial inclusion. Jorge’s comment calls attention to the win/win in which merchants benefit from access not only to customers (by serving as agents) but also as customers themselves. He calls us to do more “to bring merchants and entrepreneurs, particularly the small retail points where so many people shop, into the picture.”

What a difference a good government can make! Dr. William Derban of Fidelity Bank Ghana credits smart e-money regulation by the Bank of Ghana as one of the many factors that has led Fidelity’s financial inclusion portfolio to grow from 14,000 to 300,000 accounts in 2 years. Gerald M. Nyakwawa finds that government adoption of financial inclusion objectives in all aspects from education to usage is the key to unlocking inclusion. And Diego Guzmán of Accion/Latin America and Jay Chanda of Accion/Africa agree that government regulation and support must proactively evolve to enable microfinance, technology development, and innovation in channels and mobile money Louise Holden of MasterCard/Europe maps out a vision in which “national governments can enable a sensibly regulated ecosystem, drive initiatives, and invest in electronic disbursement solutions.”

There were some cautionary notes as well. María José Roa García of CEMLA calls on the community to pay more attention to impact, including through more baseline studies, and Liza Guzmán of Accion/Latin America reminds us of our responsibility of balancing financial and social returns, noting that everything we do to contribute to advance financial inclusion will impact a person and a family somewhere. Anne Hastings of the Microfinance CEO Working Group calls for “effective legal and regulatory frameworks that protect all banking clients, especially those most vulnerable and hard to reach.” Her full quote inspired a lovely email in response from Elijah Chol Yak of the South Sudan Microfinance Development Facility that is part of the Government of South Sudan, in which he expressed his commitment to look forward “to see how we can unite our ranks and use this week to sensitize our people about the needs to have a conducive regulatory and policy environment for the advancement of financial inclusion in South Sudan.”

For Matthew Driver of MasterCard, an essential piece of the puzzle is investing in financial literacy, echoed by Gerald M. Nyakwawa, and one example, as IFMR reminded us on Twitter, is assisted transactions. Recognizing the importance of financial infrastructure – not as exciting to discuss, but vital nevertheless -- Faisal Malik of KASHF/Pakistan calls out the importance of credit bureaus.

Who will make all of this happen? Valerie Kindt of Accion reminds us that complex technology and partnerships require capable people, with her call to improve organizational management, build operational capacity, and attract talent, and Tim Adams of the Institute of International Finance has a similar grounding in the realities of implementation when, from his perspective as CEO of a global association of the financial industry, he talks about the need to “identify current successes, assess best practices and then apply those experiences to help efforts in other parts of the world.”

We’ll give (almost) the last word to Ling Hai of MasterCard’s Asia Pacific region, who packs a lot into his comprehensive vision of what financial inclusion can do: “We need to ensure that all stakeholders are aware that providing people with the ability to save and borrow efficiently and securely improves well-being and encourages enterprise, ultimately reducing global poverty and increasing economic growth.”

As Sergio Navajas says, “It’s time.”

See a fun fast read of the full calls to action, complete with photos at <a href="http://www.fi2020week.org/">fi2020week.org</a>.

If you would like to add your own call to action, please email Allyse McGrath at <a href="mailto:amcgrath@accion.org">amcgrath@accion.org</a>. As well, we are compiling the calls to action that emerged from over 30 webinars, on-line conversations and in-person events throughout FI2020 Week, so stay tuned.

Have you read?

<a href="http://cfi-blog.org/2015/11/02/fi2020-week-is-underway-join-in/">FI2020 Week Is Underway! Join in</a>

<a href="http://cfi-blog.org/2015/11/04/fi2020-week-recap-1/">FI2020 Week Recap #1</a>

<a href="http://cfi-blog.org/2015/11/06/fi2020-week-recap-2/">FI2020 Week Recap #2</a>

100 Calls to Action: Highlights from FI2020 Week

Mastercard

Financial Inclusion 2020

Partnership for Responsible Financial Inclusion

Delivery Channels

&gt; Posted by Paul Breloff and Jeff Bond, Accion Venture Lab

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Remittances are big business. This year, customers will send <a href="http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1288990760745/MigrationandDevelopmentBrief23.pdf">$454 billion</a> to developing countries through formal channels alone. Developing countries’ income from remittances is three times bigger than the global aid budget. If you exclude China, remittance flows even outweigh foreign direct investment.

However, remittance services have never been known for great customer experience. Here’s why:

First, they’re expensive. At the end of 2014, the global average cost of sending remittances was <a href="http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1288990760745/MigrationandDevelopmentBrief23.pdf">just under 8 percent of the value sent</a>. For less popular remittance corridors, rates climb well into the double digits and can reach over 20 percent.

Second, they’re inconvenient. Coordination between senders/receivers, locating branches to send and receive cash, paperwork and red tape, and long lines – these and other factors often make the experience of sending remittances pretty miserable.

But the world is changing. A convergence of forces offers the opportunity to rethink the traditional remittance model, promising more money, time, and peace of mind for customers. What’s new?
 

<ul>
	<li>New technology. Cell phone penetration, mobile money, and the internet permit remote digital access to financial products in a way never before possible.</li>
	<li>New money. Cryptocurrencies like Bitcoin and related protocols like <a href="https://ripple.com/">Ripple</a> offer instant, point-to-point value transmission. This opens new possibilities for customers as well as alternative payment channels for providers, who have traditionally had to work through a highly intermediated correspondent bank network.</li>
	<li>New distribution. On the sending side, customers can manage transfers from their phone or PC without ever leaving their seats; on the receiving side, customers can have transfers land in mobile money accounts or as gift cards to be spent locally, as well as simply having their bills or purchases paid for directly. Cash is still important, but there are alternatives. Many recipients never need to actually hold currency in their hands.</li>
	<li>New players. The game is not dominated just by Western Union and Moneygram anymore. Incumbents are being challenged by a range of high-growth, well-funded new players, like <a href="http://www.xoom.com/">Xoom</a> (which went public in 2013), <a href="http://www.transferwise.com/">Transferwise</a>, <a href="http://www.worldremit.com/">WorldRemit</a>, <a href="http://www.azimo.com/">Azimo</a>, and others.</li>
</ul>
The opportunity to “disrupt remittances” has become fintech’s honey pot, luring entrepreneurs of all kinds to join the party and see if they can offer better pricing, better service, better experience, better everything. In the last couple of years we’ve learned about dozens of new entrants, including (alphabetically): <a href="http://www.goabra.com/">Abra</a>, <a href="http://www.bitpesa.co/">BitPesa</a>, <a href="http://www.bitx.co">BitX</a>, <a href="http://www.michapulin.com/">Chapulin</a>, <a href="http://www.hellobit.com/">Hellobit</a>, <a href="http://www.instarem.com/">Instarem</a>, <a href="http://www.isend.com/">iSend</a>, <a href="http://www.kipochi.com/">Kipochi</a>, <a href="http://www.kitiwa.com/">Kitiwa</a>, <a href="http://www.kwanji.com/">Kwanji</a>, <a href="http://www.kwikremit.com/">Kwikremit</a>, <a href="http://www.mergims.com/">Mergims</a>, <a href="http://www.getneema.com/">Neema</a>, <a href="http://www.niokobok.com/">Niokobok</a>, <a href="http://www.quippi.com/">Quippi</a>, <a href="http://www.regalii.com/">Regalii</a>, <a href="http://www.remit.ug/">Remit.ug</a>, <a href="http://www.remitix.com/">Remitix</a>, <a href="http://www.remitly.com/">Remitly</a>, <a href="http://www.saldo.mx/">Saldo.mx</a>, <a href="http://www.sikacash.com/">SikaCash</a>, <a href="http://www.simbapay.com/">SimbaPay</a>, <a href="http://www.tawipay.com/">Tawipay</a>, <a href="http://www.volabit.com/">Volabit</a>, <a href="http://www.sendwave.com/">Wave</a>, <a href="http://www.willstream.com">Willstream</a>. No doubt, there are others as well.

As investors, we’ve looked at dozens of pitch decks from these and other companies. Most of them start the same: “Western Union is gouging customers! Prices can be, will be lowered!” Yes, we agree – and most exciting, all of this promises benefits for the global poor and underserved (many of whom are active money transfer users), who will have options that are cheaper, better, faster, nicer, and more transparent.

But as investors, we’re finding it hard to back any of these opportunities – at least at the seed or startup stage.

Why?
<ul>
	<li>Remittance companies are all about trust; trust is all about brand; and brands are expensive. It’s not that remittances can’t be disrupted, but that’s already happening, with some very deep-pocketed challengers already out in the lead.</li>
	<li>Winning at remittances requires winning at customer acquisition: s/he with the customer wins. But at the startup stage, companies have very few customers and are not sufficiently established to allow an investor to determine who has legit customer acquisition prowess.</li>
	<li>A lower price is no longer a sustainable competitive advantage. Pricing is a race to the bottom. This is great for humanity, but bad for remittance companies who claim price as their primary differentiator. Startups may undercut traditional players now, but that’s probably not defensible long-term. An established player like Western Union can simply cut prices when specific markets, like the U.S. – Philippines corridor, grow crowded. The battle will likely be won on better customer experience, convenience, and brand – in addition to a great price.</li>
	<li>Cryptocurrencies like bitcoin may benefit the well-funded challengers more than startups. Traditional companies like Western Union and Moneygram may not easily figure out how to use these new currencies, given their legacy systems, but the more established among the newer players, like Transferwise, Xoom, and Azimo, are poised to take advantage of the cost and speed advantages of cryptocurrencies on the back-end, regardless of whether they choose to make them a direct part of the customer experience. Startups can do this too, of course, but we doubt a startup can create sustainable competitive differentiation on the use of cryptocurrencies alone.</li>
	<li>Similarly, user experience and design is very important, and we’re seeing great examples, but it’s not clear this can be a source of long-term competitive edge without brand and distribution.</li>
	<li>Finally, many of the strategies we’re seeing will be hard to scale (a pre-requisite in a high volume, low margin business like remittances):
<ul>
	<li>“Directed remittances” (e.g., remote bill pay, airtime purchasing, gift cards) may not get to scale quickly enough to result in viable businesses, because of reliance on local retailer, utility, and/or product distributor partnerships.</li>
	<li>Players focused on sending remittances to mobile money accounts will only be able to expand in those markets with robust mobile money ecosystems. However, few markets outside Kenya and Tanzania are ready for this, so scale will come slowly.</li>
	<li>Overall, remittance concepts with limited use cases or specialized corridors may never achieve escape velocity. The very things that make remittance startups valuable in specific markets make them less scalable and transferable: signing on local vendors, integrating with local partners, targeting local users or customers who are part of a specific diaspora. And nothing prevents competitors from doing the exact same thing.</li>
</ul>
</li>
</ul>
There will no doubt be some sizable winners in remittances – companies who break through the clutter and customers who benefit from superior products and lower prices. Capturing even a small slice of the remittance market could be very lucrative indeed. Ultimately, though, the winners will likely be the ones to break through on brand, customer acquisition (and how this compares to repeat usage and lifetime value), customer experience, and execution, not just price. These can be very hard to predict at a startup stage (when we at Venture Lab invest), before the real work has begun.

Paul Breloff and Jeff Bond work with <a href="https://www.accion.org/venturelab">Accion Venture Lab</a>, investing in innovative financial inclusion startups globally.

Have you read?

<a href="http://cfi-blog.org/2014/06/03/a-money-transfer-duopoly-that-fails-to-protect-clients/">Do African Remittances Services Providers Properly Protect Clients?</a>

<a href="http://cfi-blog.org/2014/05/07/walmart-joins-the-list-of-non-traditional-players-offering-remittances/">Walmart Joins the List of Non-Traditional Players Offering Remittances</a>

<a href="http://cfi-blog.org/2015/04/10/digital-financial-inclusion-in-india-taking-off-in-2015/">Digital Financial Inclusion in India - Taking off in 2015</a>

Picking Winners in the Great Remittance Disruption

Blockchain and Cryptocurrency

&gt; Posted by Rishabh Khosla, Senior Investment Analyst, Accion Venture Lab

The following post was <a href="http://social.yourstory.com/2015/04/digital-financial-inclusion/">originally published</a> on SocialStory.

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The Indian financial services landscape is undergoing a tectonic shift. The last few years have seen a renewed public focus on expanding financial inclusion. Building off prior programs, the government has invested in regulatory reform, improvements to the banking system, payments, and ID infrastructure. They have also announced a series of programs targeting the bottom of the pyramid (BoP) and micro, small, and medium enterprises (MSMEs). Simultaneously, we are beginning to see real shifts in the adoption of digital technologies and banking services (such as basic savings accounts and smartphones), driven by compelling use-cases, such as government subsidies, delivered directly into bank accounts, and rickshaw-hailing apps that use mobile wallets. Together these trends are unleashing tremendous innovation with the potential to speed financial inclusion for millions.

As <a href="http://www.accion.org/investments/" target="_blank">investors</a> in early and growth stage “social” enterprises that are speeding financial inclusion around the world, we believe startups are uniquely positioned to navigate this shifting technological, regulatory, and competitive environment. Indeed, financial sector reform in India has had many false starts, and there are still many regulatory and structural hurdles to be overcome. However, we believe India is nearing an inflection point with changes playing out in three areas that are giving birth to exciting startup financial services models: MSME finance, digital payments, and consumer services.

MSME Finance

As mainstream microfinance (targeting the poorest) has matured, focus has turned to the country’s chronically underserved MSMEs, where, according to an IFC estimate, there is a debt gap of over $60 billion. Already, innovative companies like Aye Finance, Varthana, Vistaar, and Kinara Capital have been serving this sector by partnering and building specialized acquisition and underwriting approaches. These changes are being accelerated by the government: last year, the RBI announced a new category of “small” bank that focuses on poorer customers. This year the government proposed the creation of a MSME bank (<a href="http://indianexpress.com/article/business/business-others/mudra-bank-to-be-launched-on-april-8/" target="_blank">MUDRA</a>) with a $3 billion capital allocation for the sector. Supported by these initiatives, over time, we expect to see more players and capital flow into the space, resulting in a greater volume of lending to the underserved.

In the <a href="http://cfi-blog.org/2014/07/24/the-implications-of-indias-2014-budget-for-financial-inclusion/" target="_blank">past</a>, we have highlighted the wholesale debt gap as a major pain point for these kinds of innovative startup lenders. Without demonstrating break-even and several years of track record, it’s very difficult to access affordable funding critical to scale. Players like <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=3&amp;cad=rja&amp;uact=8&amp;ved=0CC8QFjAC&amp;url=http%3A%2F%2Fcapital.ifmr.co.in%2F&amp;ei=UOIaVfn8DaLIsQTrnYDIDg&amp;usg=AFQjCNFij3EVgs8NVVeGqUHodrbKjl1Yaw&amp;sig2=WeqgLGDALZmLJ0XDfOnCDw&amp;bvm=bv.89744112,d.cWc" target="_blank">IFMR</a> and <a href="http://www.intellegrow.com/" target="_blank">Intellegrow</a> are supporting these lenders along with other entrants, though we think that plenty more can be done here.

On a more positive note, as e-commerce, internet, and smartphone penetration have grown, new data sources and channels are opening up, allowing companies to better reach and serve new customer segments. Companies like Capital Float partner with e-commerce marketplaces to access and assess small merchant vendors. SMECorner, IndiaLends, and Namaste Credit have gone completely digital: they acquire potential borrowers online, help them complete an application, and provide them with a range of credit options from different banks.

Digital Payments 

For a long time, India’s digital payments infrastructure languished, until efforts led by the <a href="http://www.npci.org.in/" target="_blank">National Payments Corporation</a>, an entity blessed by RBI and owned by leading financial institutions in India, began to knit together the plumbing that connected banks, points of sale, mobile wallets, and other financial accounts. These efforts have eased barriers to adoption and interoperability issues: volumes through IMPS, a system used to send smaller payments instantly between bank accounts and other digital wallets, reached $1.3 billion per month in February (up 13 times since September 2013).

The government has also encouraged a burst of private innovation by promoting "payments" banks, a new category of Indian banks. The new structure is designed to attract fresh players (that is, non-bank and non-NBFC actors), to hold and transfer money on the consumer’s behalf. Mobile operators, for example, have millions of distribution points for pre-paid credit around the country; they can now be used to load cash onto mobile wallets and sent across the country. Perhaps, the most recent visible successes in this space are third-party mobile wallet operators like Hermes, <a href="https://www.oxigenwallet.com/" target="_blank">Oxigen</a>, and <a href="https://paytm.com/" target="_blank">Paytm</a> (which recently received an investment from <a href="http://articles.economictimes.indiatimes.com/2015-02-06/news/58878976_1_paytm-alibaba-25-stake" target="_blank">Alibaba</a>). Paytm has made its platform interoperable with IMPS (enabling instant transfers to bank accounts); and offers peer-to-peer transfers through mobile apps, and will soon launch a network of physical “cash-in and cash-out” locations.

These signs are encouraging, though the market is still nascent and fragmented. Most volume is from early adopters and wealthier users. To achieve real scale, players must look to ensure greater interoperability, and provide more relevant use-cases and value-added services that make digital payments convenient to mass markets, BoP, and micro businesses.

To read the rest of this post, <a href="http://social.yourstory.com/2015/04/digital-financial-inclusion/" target="_blank">visit SocialStory</a>.
<div>Rishabh Khosla is a senior investment analyst with Accion Venture Lab, supporting the team’s investment activity in India and the U.S. Rishabh also provides extensive support to Venture Lab’s portfolio engagement activities and fund operations. This article was written with input and support from Ganesh Rengaswamy, Managing Director at Accion’s Frontier Investments Group, and Vikas Raj, Director of Investments at Accion Venture Lab.

Have you read?

<a href="http://cfi-blog.org/2014/10/30/fueling-the-economic-engine-global-experiments-in-small-enterprise-lending/" target="_blank">Fueling the Economic Engine: Global Experiments in Small Enterprise Lending</a>

<a href="http://cfi-blog.org/2015/01/20/financial-inclusion-trends-and-innovators-2015/" target="_blank">Financial Inclusion Trends and Innovators - 2015</a>

<a href="http://cfi-blog.org/2014/11/05/accion-venture-lab-responds-to-the-great-competition-and-innovation-deficit/" target="_blank">Accion Venture Lab Responds to ‘The Great Competition and Innovation Deficit’</a>

</div>

Digital Financial Inclusion in India – Taking Off in 2015

Data Analytics

Digital Financial Services

Payments

Policy, Regulation and Government Initiatives

<h4>The most exciting trends and startups in inclusive finance this year</h4>
&gt; Posted by Vikas Raj, Director of Investments, Accion Venture Lab

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There has been a lot of buzz in the financial technology (FinTech) space over the last several months, with a <a href="http://www.bloomberg.com/news/2014-12-10/lendingclub-poised-for-cash-infusion-of-its-own-to-fund-growth.html">high-profile IPO, several more apparently on the way</a>, and more and more venture funding flowing into FinTech startups. Bold ideas for financial services innovation are getting more visibility - just this month, Australian Wealth Index (AWI) listed the <a href="http://fintechinnovators.com/about-awi" target="_blank">50 Best FinTech Innovators</a>, and CFI’s Elisabeth Rhyne <a href="http://cfi-blog.org/2015/01/08/the-twelve-days-of-fintech/#more-16946" target="_blank">conveniently categorized</a> the list so it’s easy to see at a glance where the innovations are.
At <a href="https://www.accion.org/venturelab">Venture Lab</a>, we found the AWI list interesting but also felt it missed something significant: namely, that one of the biggest opportunities for FinTech is figuring out new solutions to include the billions of lower-income people who are today excluded from formal financial services. And it’s not charity that compels us to reach these customers – it’s good business. These customers represent a big market. In fact, they’re such a significant part of any emerging market’s customer base that any global providers with dreams of international expansion must cater to them if they want to succeed. 
It’s a particularly exciting time because the traditional bottlenecks to reaching these customers – the need for high-touch models and small value transactions, the need for cost-effective means of education and engagement – are exactly the kind of barriers that technological advances can help tackle. As Elisabeth Rhyne <a href="http://cfi-blog.org/2015/01/08/the-twelve-days-of-fintech/#more-16946" target="_blank">laid out</a> in her challenge recently, what about the “top 50 financial inclusion innovators?” What about the new business models and technologies that are impacting the underserved? 
At Venture Lab, we are focused on investing in businesses that are innovating in big ways to get consumers and small businesses a wider range of financial products and services, and therefore giving them the tools they need to manage and improve their lives. The breadth of this challenge is so large, and the ways to chip away at it so varied, that we don’t think it makes a lot of sense to try to force rank the “best” financial inclusion companies.
Instead, we lay out below some of the key groundbreaking trends we see in the financial inclusion space right now, and some of the seed stage companies that are leading the charge. This is by no means an exhaustive list – of trends, and especially not of companies. However, from our seat as seed stage investors, these are some of the most exciting things happening in financial inclusion right now.
Digital Remittances – Companies are figuring out new ways to send money across international borders, dramatically improving the value proposition to senders and recipients, using mobile wallets to get money directly into recipients’ pockets and cryptocurrencies to execute transactions faster and cheaper.
<ul>
	<li>Coins.ph (the Philippines) – A Bitcoin mobile wallet that cuts transaction costs for Filipinos working abroad and sending money home. Also offers direct ATM withdrawal via partnerships with banks as well as merchant integration for e-commerce.</li>
	<li class="List_0020Paragraph">SimbaPay (U.K.) – Mobile app that allows Kenyans abroad to deposit money into Kenyan bank accounts instantly.</li>
	<li class="List_0020Paragraph">Send WAVE (Kenya) – Cuts transaction costs for Kenyans via software that automates remittances, only charging a foreign exchange rate fee. Users can instantly send funds via a mobile application.</li>
	<li class="List_0020Paragraph">Hellobit (San Francisco) – Uses Bitcoin to cut transaction costs for remittances by allowing anyone with a mobile phone to act as Bitcoin exchanger or delivery agent.</li>
	<li class="List_0020Paragraph">BitPesa (Kenya) – Uses Bitcoin to cut transactions costs for Kenyans working abroad and sending money home.</li>
	<li class="List_0020Paragraph">Volabit (Mexico) - Uses a Bitcoin backend for consumers to send money, shop online, and invest in Bitcoins via peer to peer lending.</li>
</ul>
Marketplace Lending 2.0 – With the Lending Club IPO starting 2015 off with a bang, we expect businesses that build online platforms that stand between borrowers and lenders to continue to be a core innovation area in 2015, particularly as new business models leverage motivated alternative capital sources to serve specific customers sets (small business, customers working through credit issues) with more relevant products.
<ul>
	<li>LendStreet (U.S.) – Using marketplace lending capital to allow distressed borrowers to refinance their debt and rebuild their lives.</li>
	<li class="List_0020Paragraph">StreetShares (U.S.) – Connecting small businesses to marketplace lending-sourced capital, with a focus on veteran-owned businesses and investors.</li>
	<li class="List_0020Paragraph">Bolstr (U.S.) – Expansion capital for small businesses with a focus on community support – revenue share-based repayments.</li>
	<li class="List_0020Paragraph">Intoo (Brazil) – Receivables financing for small and medium-sized businesses through FIDCs and other alternative financers.</li>
</ul>
New Data for Credit Scoring – We are more excited than ever about companies that identify and exploit new or never-before-used data pools to enhance lenders’ decision-making and allow them to expand their loan books downmarket.
<ul>
	<li>First Access (East Africa) – Leveraging cell phone data to more reliably gauge credit risk for borrowers in informal markets.</li>
	<li class="List_0020Paragraph">Destacame (Chile) – Uses individuals’ utilities and cell phone data to create and manage alternative credit scores and influence current credit scoring models.</li>
	<li class="List_0020Paragraph">AIRE (U.K.) - Alternative credit score for consumers who have no existing credit data.</li>
	<li class="List_0020Paragraph">Kopo Kopo (East Africa) – Using mobile money merchant data to provide financing to merchants that fits within their cash flow cycles.</li>
</ul>
eCommerce Merchant Lending – This could be seen as a sub-set of the category above, but we are particularly excited about companies that partner with existing eCommerce sites to gather crucial data and provide loans and other financial services to online merchants.
<ul>
	<li>Lendingkart (India) – Partnering with India’s eCommerce players to provide unsecured term loans to online merchants.</li>
	<li class="List_0020Paragraph">Mr Presta (South America) – Partnering with the largest eCommerce players in Mexico and Argentina to lend to small and medium-sized online businesses.</li>
	<li class="List_0020Paragraph">NeoGrowth (India) – Financing via online partners based around merchant cash advance.</li>
</ul>
Customer Engagement – Finally, we love the new breed of companies that are allowing lenders, and others, to better engage with their customers by helping them to better understand products and giving them core insights about customer behavior and risk. These companies run the gamut between financial literacy and credit enhancement tools, but they are connected by their core innovation around bringing customers into the financial system by engaging directly in new ways.
<ul>
	<li>Juntos (Global) – Mobile-based personal finance tools for cash-based households.</li>
	<li class="List_0020Paragraph">Revolution Credit (U.S.) – Online courses and videos that allow consumers to increase financial IQ and access better financial products.</li>
</ul>
This is hardly a complete inventory of all the cool stuff happening, but certainly enough to get excited about.
Have you read?

<a href="http://cfi-blog.org/2014/10/30/fueling-the-economic-engine-global-experiments-in-small-enterprise-lending/" target="_blank">Fueling the Economic Engine: Global Experiments in Small Enterprise Lending</a>

<a href="http://cfi-blog.org/2014/12/05/the-role-of-peer-to-peer-lending-in-financial-inclusion/" target="_blank">The Role of Peer-to-Peer Lending in Financial Inclusion</a>

<a href="http://cfi-blog.org/2014/11/05/accion-venture-lab-responds-to-the-great-competition-and-innovation-deficit/" target="_blank">Accion Venture Lab Responds to 'The Great Competition and Innovation Deficit'</a>

Financial Inclusion Trends and Innovators – 2015

First Access

Brazil

Chile

Philippines

Sub-Saharan Africa

United Kingdom

United States

&gt; Posted by Ariel Schwartz, Senior Editor, Co.Exist


The following post was <a href="http://www.fastcoexist.com/3039201/what-its-like-to-live-without-a-bank-account-for-a-day" target="_blank">originally published</a> on Fast Company's Co.Exist.

<a href="https://www.flickr.com/photos/pasa/9451807355"><img class="aligncenter wp-image-16866" src="https://centerforfinancialinclusionblog.files.wordpress.com/2014/12/9451807355_efcdc990b3_k.jpg" alt="" width="610" height="457" /></a>


The challenge was simple, or so it seemed: Pay my bills and complete a handful of money-related errands before my work shift began at noon. It was harder than I ever could have imagined.

In reality, I wasn't handling my own finances; I was participating in a <a href="http://www.fastcoexist.com/technology/simulation" target="_blank">simulation</a> of what it's like to be one of the underbanked—that is, to be one of the 7.7 percent of Americans with limited access to traditional banking services. The <a href="http://www.fastcoexist.com/organization/financial-solutions-lab" target="_blank">Financial Solutions Lab</a>, a <a href="http://www.fastcoexist.com/explore/spin-off" target="_blank">spin-off</a> of the <a href="http://www.cfsinnovation.com/" target="_blank">Center for Financial Services Innovation</a> (CFSI), put on the simulation for a group of entrepreneurs, nonprofit employees, and banking executives so that they could come up with new product ideas for addressing the challenges of <a href="http://www.fastcoexist.com/explore/cash-flow-management" target="_blank">cash flow management</a>.

During the two-hour simulation, the group was split up into teams and given a series of tasks to complete. These included buying a general purpose re-loadable card (GPR) and loading it up with cash, cashing a payroll check and a personal check, completing a money transfer and then picking up a money transfer card from another team, and paying the balance of a monthly rent bill.

My team—Paul Breloff, managing director of the <a href="http://www.fastcoexist.com/organization/accion-venture-lab" target="_blank">Accion Venture Lab</a>, Ethan Bloch, the CEO of <a href="https://digit.co/" target="_blank">digit</a>, and myself—walked around San Francisco's Mission District, popping into the payday loan and cash advance outfits, with names like Ace Cash Express and Money Mart, that I had passed so many times before without even a second glance.

Our first problem came at Ria's, a storefront where we planned to cash our checks and load up our GPR card. We ended up waiting for nearly half an hour while the store decided it couldn't cash one of the checks because we couldn't immediately get verification from the sender that it was legitimate.

Ace Cash was willing to take care of the checks and GPR quickly, but for a significantly higher fee. Still, Ace Cash refused to let us pay the $10 balance from our monthly rent bill. The transaction was "declined for unspecified reasons."

To read the rest of this post, visit <a href="http://www.fastcoexist.com/3039201/what-its-like-to-live-without-a-bank-account-for-a-day" target="_blank">Co.Exist</a>.

Image credit: <a href="https://www.flickr.com/photos/pasa/9451807355" target="_blank">Paul Sableman</a>

Have you read?

<a href="http://cfi-blog.org/2014/11/13/an-innocent-visits-the-pawn-shop/">An Innocent Visits the Pawn Shop</a>

<a href="http://cfi-blog.org/2014/11/04/a-financial-inclusion-research-agenda/">A Financial Inclusion Research Agenda</a>

<a href="http://cfi-blog.org/2014/11/05/accion-venture-lab-responds-to-the-great-competition-and-innovation-deficit/" target="_blank">Accion Venture Lab Responds to 'The Great Competition and Innovation Deficit'</a>

What It's Like to Live Without a Bank Account for a Day

&gt; Posted by&nbsp;Tyler Aveni, Research, PlaNet Finance China
[getty src="73103613?et=RA3szv4ATP1Af1iywmgGiw&amp;sig=2_6c-y2sOa0kaKcmNh4UHBbqm7E-IZNai36AfOcDQ2U=" width="594" height="368"]
Peer-to-peer (P2P) lending is on the rise – as evident by the hundreds of articles on the subject that have sprung up just this year. However, P2P, generally defined as individuals bringing together small sums of money to lend to other individuals, is hardly a new concept. Moreover, this process of lending amongst communities of small businesses and friends has been moving online for a decade now. And while money is now most commonly transferred between strangers, interconnectivity online has allowed the process to feel almost as intimate as lending among friends and family.

The two earliest entrants into the P2P industry have gained steady followings since their beginnings in 2005: Zopa, a large commercial P2P platform in the U.K. boasts high returns and low interest rates for participants; the U.S. non-profit Kiva facilitates philanthropic P2P lending, wherein microentrepreneur clients of “field partners” or local financial institutions in developing countries are paired with those willing to lend at a zero percent return (i.e. indirect P2P). Through nearly a decade of innovations and new players emerging, P2P has slowly become a disruptive force. Total origination remains moderate with some $2.4 billion originated through P2P in the U.S. last year, but growth has recently skyrocketed.The U.S. market is estimated to swell to$32 billion by 2016. By 2025, the global figure could be as much as one trillion.*

Why such fast growth?



The appeal of online lending is two-fold. First, humanizing the lending process draws on a public sense of community. Many people prefer supporting others in a transparent system of lending as opposed to relying on traditional investing and/or saving options offered by banks. Some borrowers say that knowing other individuals are on the hook, rather than a bank, has incentivized them to go the extra mile in making repayments. In this way, P2P is almost strikingly traditional in that it integrates elements of “group pressure”– a successful innovation in microfinance organizations throughout the world – into the lending process.

Second, P2P lending is often a cheaper form of lending. Online transactions mean little need for brick-and-mortar establishments. P2P lending in the West has developed advanced credit evaluation analytics, lowering default risk and, by extension, reducing costs further. The result is better returns and lower interest rates for most investors and borrowers. Consequently, existing borrowers and small and medium-sized enterprises have come in droves to refinance their debts via P2P platforms.

Rishabh Khosla of Accion’s Venture lab sees other innovations taking shape. One of these is “affinity based lending,” or lending amongst those of a particular group. At StreetShares, a U.S. P2P platform that targets veteran groups and veteran businesses, borrower and investor acquisition has taken on a new grassroots quality. Khosla notes that&nbsp;“The key to vastly lowering the cost and making this market happen is low-cost borrower acquisition, low-cost lender acquisition, and then a really good engine in the middle to assess and underwrite these borrowers.”

P2P lending is pushing financing toward greater credit accessibility in myriad ways. When defined broadly, financial inclusion has already felt the positive effects of P2P lending’s development. Credit for small businesses means economic growth, entrepreneur support, and potentially more employment. Consumers trapped into exploitative interest payments on credit card debt can find some reprieve with P2P refinancing. High-achieving students and P2P lenders are proving to be an especially attractive combination. Many borrowers voice their satisfaction with the entire process.

“Last-mile” borrowers are being affected as well, albeit at a slower pace. A reflection of the unique challenges in reaching poorer regions, a different sort of P2P business model has taken root in the developing world. Partnerships, such as Kiva’s, between microfinance institutions (borrower acquisition) and P2P portals (lender acquisition) have given a new swath of rural borrowers access to credit. Over-indebtedness caused by high interest rates and poor individual credit evaluation remains a concern. However, supporting the better-performing, lower-risk microfinance companies means formal loans are being made available, an attractive option to those who might otherwise resort to loan sharks.

In developing and developed markets alike, potential for high returns has attracted institutional investors who now see the industry as better-developed and less risky compared to its earlier years. As a result, institutional big money is pouring into the industry (both in the form of equity investments into platforms and total loan origination by them), adding to the rapid growth of P2P lending. China, home to the largest P2P market, serves as a good example: total loan origination via Chinese P2P companies has grown more than 200 percent in 2014.**&nbsp;This marks a global trend. With so many large investment firms getting involved, the industry looks distinctively more commercial.

But perhaps social and commercial interests stand to benefit from one another. A P2P industry with more visibility, even if primarily profit-driven, could benefit a whole range of P2P lending companies, from the philanthropic to the bank-like. After all, both types of platforms aim to improve on and fill gaps in current lending practices. The fact remains, however, that growing interest is moving the industry closer to institutional players. P2P companies and their business models may very well be absorbed by banks as part of a new age of efficient banking. What this would mean for P2P lending is unclear, but many are understandably wary of trusting big business to champion fair lending practices.

Regardless, authorities are clamoring to work out regulations for the nascent industry as P2P companies scale up. During this stage of rapid change in P2P lending, it will remain essential to keep track of where the industry is going and how best to try to shape it. Accordingly, Planet Finance will address some of the pressing topics in our upcoming research on P2P lending practices worldwide. The research comes as part of our Microfinance Robustness Program which promotes the sustainability of the microfinance sector and is supported by Credit Suisse, a partner of both Planet Finance and the Center for Financial Inclusion.

By exploring impacts of P2P lending in different communities and evaluating the potential it holds for extending financial inclusion, we hope to illuminate a socially minded narrative, one that discusses innovative bank to P2P company partnerships, and address concerns of P2P lending fueling over-indebtedness.There is currently a need to better define the P2P lending space, to better understand the complexities and risks of various business models, and to provide a more involved discussion of how the industry is progressing. Both the unfairly served and “underbanked” alike will ultimately benefit.

* Estimates from Research and Markets distributed report “Peer-to-Peer Lending: Global Facts and Figures 2014”

**Estimates from wangdaizhijia.com, a China P2P market monitoring website

Have you read?

<a href="http://cfi-blog.org/2014/09/23/chinas-microfinance-landscape-nonprofits-microcredit-companies-rural-financers-and-alibaba/">China’s Microfinance Landscape: Nonprofits, Microcredit Companies, Rural Financers, and Alibaba</a>

<a href="http://cfi-blog.org/2014/08/06/reality-check-three-ways-we-hype-up-financial-inclusion-break-throughs/">Reality Check: Three Ways We Hype Up Financial Inclusion Breakthroughs</a>

<a href="http://cfi-blog.org/2014/10/30/fueling-the-economic-engine-global-experiments-in-small-enterprise-lending/">Fueling the Economic Engine: Global Experiments in Small Enterprise Lending</a>

The Role of Peer-to-Peer Lending in Financial Inclusion

Ishan Mishra

India Investment Officer

Advisory Services

Appropriate Product Design and Delivery

Consumer Protection

Equity Investing

Financial Service Providers

Financial Technology

Governance

Human Centered Design

Initial Public Offering

Insurance Companies

A good product serves as an extension of your own team — your vision, mission, and values — and with any good organization, it deserves its own form of iteration and continuous improvement. But as an early-stage company, the balance between building a product that’s “good enough” and other competing interests can often result in poor product-market fit, or even worse, burned out and frustrated engineers. 

We’ve built <a href="http://content.accion.org/wp-content/uploads/2020/03/202003-Product-Testing.pdf">Product Testing: A Guide to Getting Started</a>, to help you navigate the important decisions around testing, iterating, and improving your products. We’ll walk you through some of the key aspects of:
<ul>
 	<li style="font-weight: 400;">Building a test-friendly culture in your organization</li>
 	<li style="font-weight: 400;">Using an experiment framework and prioritizing what to test</li>
 	<li style="font-weight: 400;">Building and implementing a testing plan </li>
 	<li style="font-weight: 400;">And, how to implement and share your findings.</li>
</ul>

Product Testing:A Guide to Getting Started

Entrepreneur

Research shows that engaged employees increase productivity and bottom-line performance while reducing turnover and costs. Although creating a corporate culture of engagement can sound elusive, an employee engagement survey is a good place to start. Employee engagement surveys ties to specific performance outcomes, so it gives a pulse read of current engagement levels and offers a way to spot areas for improvement to increase overall engagement. We’ve developed this resource to give you the right questions to ask on an employee engagement survey, and guide you through successfully launching it, analyzing results, and implementing next steps. Use this resource as a tool to manage the end-to-end process of running your next employee engagement survey.

How to successfully launch an employee engagement survey

Impact Investor

Technological advancements have made collecting, storing, and analyzing customer data easier than ever. While these advancements have unlocked large benefits for financial technology companies, they have also come with their own set of risks and challenges: with more data being collected and stored, the risk of information being hacked, stolen, or used without authorization has also increased.

Data protection, defined as both data security and data privacy, has become even more critical to maintain customers’ trust, avoid regulatory scrutiny, and keep companies running. This data protection resource helps fintech startups understand the policies, protocols, and practices that should be in place to protect their business, customers, and partners from potential data threats. 

In this resource, you’ll find:
<ul>
 	<li>Data audit and risk assessment workshop templates and guidelines</li>
 	<li>Data protection assessment, strategic initiative list, and implementation guide</li>
 	<li>Data policy template</li>
 	<li>Seed stage investor due diligence checklist and portfolio management guide</li>
</ul>

Data Protection

Financial Service Provider

As a company grows, employees benefit from performance management becoming less ad-hoc and more systematized. This guide provides a structure for growing startups to use as they evaluate their employees on their performance, and think about how to maximize the potential of employees at all levels of the organization.

Performance Management

Referral marketing programs generate new customers while keeping past customers active. This guide is useful for entrepreneurs seeking to launch their own referral marketing program in the B2C context. It includes a case study of the program launched by Lyft, a rideshare app.

Referral marketing program design and best practices

This template is meant to guide businesses through creating effective board decks.

Board deck template for startups

This guide outlines how to build and structure a board, including tactics on effectively leveraging board member expertise and networks. Also included are tips on planning effective board meetings.

How to leverage a startup board

This guide covers options plans, how much equity to offer, creating terms, and long-term strategies. It includes a <a href="http://www.accion.org/employee-stock-option-plan-model/">model example</a> and resource appendix.
<h3>Part I: Intro to Options Plans</h3>
<ul>
 	<li>What is an ESOP?</li>
 	<li>What is an Option?</li>
 	<li>Lifecycle of a Startup ESOP</li>
 	<li>Common Terms in an Options Package</li>
 	<li>Why Issue Options to Employees?
<ul>
 	<li>A Defining Characteristic of Startup Culture</li>
 	<li>A Necessary Part of the Capital Structure</li>
</ul>
</li>
 	<li>When to Create an ESOP?</li>
 	<li>Communicating Options to Employees: % versus $</li>
</ul>
<h3>Part II: How Much to Grant</h3>
<ul>
 	<li>Two Approaches</li>
 	<li>The Top-Down Process
<ol>
 	<li>How Much Equity to Set Aside in the ESOP?</li>
 	<li>A Typical Distribution Schedule</li>
</ol>
</li>
 	<li>The Bottom-Up Process
<ol>
 	<li>Segment Your Human Resources</li>
 	<li>Establish Pay Multipliers for Each Role</li>
 	<li>Determine the Dollar Value of the Options Grant</li>
 	<li>Determine the Current Share Price</li>
 	<li>Calculate the Options Grant</li>
 	<li>An Example: Hiring a CTO</li>
</ol>
</li>
 	<li>Important Takeaways</li>
</ul>
<h3>Part III: The Fine Print - Terms</h3>
<ul>
 	<li>Strike Price</li>
 	<li>Vesting Schedule</li>
 	<li>The Cliff
<ul>
 	<li>Example: Standard Vesting w/ a Cliff</li>
</ul>
</li>
 	<li>Vesting in a Liquidity Event</li>
 	<li>Exercising Options</li>
 	<li>Tax Considerations</li>
 	<li>Legal Advice</li>
</ul>
<h3>Part IV: ESOPs for the Long Term</h3>
<ul>
 	<li>Retention Grants</li>
 	<li>Discretionary Grants</li>
 	<li>Social Impact Considerations</li>
 	<li>Options Modeling – Overview</li>
 	<li>Options Modeling – A Detailed Example</li>
</ul>
<h3>Part V: Resources &amp; Further Reading</h3>

Startup employee stock option plans: Overview and best practices

This guide highlights best practices and sample job descriptions for key roles in early-stage financial inclusion startups. It is intended to serve as a starting point for your hiring process.

Hiring best practices and sample job descriptions for startups

Employee stock option plans (ESOPs) motivate startup employees by aligning their incentives with the growth of the business. This Excel model can help you calculate ESOP allocation. It is structured after the presentation model also available on our site: <a href="http://www.accion.org/startup-employee-stock-option-plans-overview-and-best-practices/">Startup employee stock options plans: Overview and best practices</a>.

Model: Employee stock option plan for startups

An employee manual details every aspect of company policy, the procedures for following those policies, and the forms needed to complete each process. This sample employee manual includes guidelines and prioritization recommendations for various policies. It can easily be customized for your organization.

Employee manual: Guide and template for startups

For software as a service (SaaS) businesses, determining the right pricing structure and setting price levels are critical decisions. This toolkit helps SaaS companies think about pricing based on value created for the customer and set pricing in a way that maximizes profitability. It contains a number of examples and tools to help with pricing decisions.

SaaS pricing framework and best practices

As a company grows, its leaders must decide how to structure its customer-facing functions: should a single team serve customers in perpetuity, or should Sales and Account Management roles be split into separate teams? This guide provides context for this choice and its associated tradeoffs, and includes case studies of other young companies’ structures.

How young companies can build their sales structure

After raising seed-round funding and further building the business, startups begin the process of raising their Series A round. This guide breaks down Series A fundraising best practicies.

Series A fundraising guide for startups

This guide contains the results of our survey on the best software, systems, and tools used for various functions across organizations. This data can be useful as startups explore other potential providers and evaluate options under consideration.

Software, systems, and tools for startups: Survey results

An effective sales team is the engine of growth for every early-stage business. To drive sustainable growth, leadership must make a number of strategic decisions. This guide helps uncover how much of the sales team’s compensation should be variable, which metrics should variable compensation be based on, and how leadership should communicate and implement the compensation plans.

Implementing an effective sales compensation plan

Raising wholesale debt is critical for businesses that are growing their loan portfolios. This guide can help lending businesses navigate the debt-raising process by providing best practices for selecting debt providers, applying for debt, and evaluating debt contracts and terms.

Raising debt and on-lending capital

Whether you have two employees or a thousand, an effective performance management program helps a business achieve results by ensuring all employees are performing at their best and connected with the overall company strategy. This guide helps companies think through how to design a performance management process. It includes sample processes and rating systems as well as evaluation templates.