COVID-19 impacts every one of us, transforming economies, healthcare and education. Our communities are forever changed, and it’s up to world leaders, organizations, governments and businesses to act quickly to help mitigate the negative impacts of this crisis and urgently attend to the needs of the most marginalized and affected communities.

As an organization that provides financial, health and education services to underserved women in Latin America, Pro Mujer is adapting. Our health and financial teams across the region are quickly developing new ways to meet the needs of our beneficiaries, while building short- and long-term strategies to ensure women continue to receive support, so they can stay healthy and address the economic impact of stay-at-home policies.

We are already seeing how inequalities become exacerbated as health and economic resources become strained. Projections are showing that poverty and unemployment will continue to increase as many businesses shut down. In Latin America, <a href="https://www.cepal.org/en/pressreleases/covid-19-will-have-grave-effects-global-economy-and-will-impact-countries-latin">unemployment could rise by 10 percentage points</a>, and we could see <a href="https://dialogochino.net/en/trade-investment/34547-coronavirus-takes-toll-on-latin-american-economies/">poverty expand</a> from 35 million to 220 million people.
<h2>Marcela’s Story</h2>
Marcela Castrillo is one of millions of women in the region who are being significantly impacted by this pandemic. As an owner of a small handicrafts manufacturer in Argentina, Marcela depends largely on sales to tourists who pass by public markets, fairs, and train stations. With the suspension of travel and a nationwide stay-at-home order in Argentina, she has lost her income.

Marcela, like so many other Pro Mujer women, are concerned as they struggle to find financial support from the government or elsewhere. Since 2008, Pro Mujer has provided Marcela with microloans to help her keep and grow her business. She and her family have also had access to basic health care at Pro Mujer’s clinics, including pediatric care for her children and gynecological care for her teen daughters.

“We understand that our health comes first. Without health, you can’t do anything. But it is really hard when you have to tell yourself that if you do not go out to work, you will not have food to put on the table. And if you go out, you could get really sick,” Marcela said. This is a recurring concern among low-income individuals across the region.

In cases like Marcela’s, our financial team is building short and long-term strategies to make sure our beneficiaries can provide for their families and do not lose their businesses. We are delaying as many loan payments as possible and reassessing our clients’ financial needs individually, a labor intensive but worthwhile process. Once mandatory lockdowns are over, our beneficiaries will also need capital to restart their businesses. Pro Mujer will be there to support them.
<h2>Accelerating a Digital Transformation</h2>
COVID-19 has had a direct impact on how we engage with our clients and patients. While Pro Mujer has been undergoing a process of digital transformation, the crisis has accelerated projects that allow us to serve our beneficiaries digitally. In Nicaragua, for example, we have ramped up our efforts to promote our digital wallet to facilitate payments among our financial services clients and to strengthen our financial support during the crisis.
<blockquote>We have ramped up our efforts to promote our digital wallet to facilitate payments.</blockquote>
Our health workers are using WhatsApp to connect with patients and provide virtual counseling sessions to answer any questions women might have about the virus or their overall health. We have already seen the spread of false information that preys on people’s levels of stress and anxiety, and we are seeing a disturbing upward trend in domestic violence and femicides during this time. This is why we have prepared our <a href="https://www.youtube.com/watch?v=f8YGfXk10SU">health staff</a> on how to provide relevant information to help our beneficiaries and their families cope with this pandemic, both physically and emotionally.

We are also putting additional resources into digitizing educational materials and fast-tracking initiatives – including trainings for our entrepreneurs on how to market and sell on Facebook – and digitizing material on health and wellbeing to engage our community through video and interactive content. Despite the fact that some of our clients – and a <a href="https://es.weforum.org/agenda/2019/03/cuantas-personas-usuarias-de-internet-hay-en-america-latina/">huge portion</a> of the Latin American population – do not have access to the internet, we are seeing a clear willingness among our clients and patients to adopt digital channels to stay connected.
<h2>A Time for Learning, Creative Solutions and Dignity</h2>
When Bolivia went on lockdown, Benigna Quisbert, a 73-year-old Pro Mujer client, had to close down her clothing shop. Like Marcela, she was left with no income. Worried about how she was going to provide for her grandchildren and about the health crisis in her community, Benigna decided to use her skills to produce face masks. She was able to secure a contract with a public hospital in El Alto, the city where she lives, to make these masks for health workers.

All of us are learning how to navigate an entirely new environment. At Pro Mujer, we are taking this moment to act quickly and at the same time reflect on what has worked for us and what needs to change so that we can build a more resilient organization that can quickly adapt to women’s changing needs.

Today, more than ever, we are seeing the critical need to build systems and structures that guarantee human rights, including equal access to fundamental resources – like health care, education, and food – and systems that allow for gender equality.

Pro Mujer’s team understands this is also a great opportunity for organizations to look at different ways of thinking and doing, to explore new horizons and prioritize the delivery of services for underserved communities around the world, and to ensure they live with dignity.

&nbsp;

The Pandemic Will Not Deter Us

Argentina

Latin America and The Caribbean

Bolivia

Test of a Lifetime: COVID-19 and Financial Inclusion

Challenges and Crises

Enabling Environment

Blog Post

Federico  Gomez Romero

Latin America Investment Officer

Chile

Colombia

Ecuador

Guatemala

Mexico

Paraguay

Peru

Uruguay

Financial Technology

MSME/SME Finance

Press Release

Article

<em>Buenos Aires, Argentina, December 3, 2020 –</em> <a href="http://www.soyhenry.com" target="_blank" rel="noopener noreferrer">Henry</a> (YCombinator company), an online computer science school that trains software developers at zero upfront cost, announced that it has raised US $1.5 million in seed funding in a round led by Accion Venture Lab. Emles Venture Partners, Noveus VC, well-known edtech angels investors and tech-entrepreneurs from Latin America also participated in the round.

Henry aims to broaden access to high-quality technical education and improve long-term earning potential in Latin America, where extreme income inequality, high unemployment, and a skilled worker shortage have created a dire need for such efforts. Only 14% of the population has access to higher education. The COVID-19 pandemic has caused unemployment in the region to rise from 8.1% pre-pandemic to 12.3% in July 2020, further widening the income gap and providing significant barriers to education. Henry estimates that there are more than 1 million software engineering job openings in Latin America, but less than 100,000 professionals with the training necessary to fill those roles.

Henry offers virtual coding courses to students in Latin America in exchange for graduates’ future income, also known as an income-sharing agreement (ISA). Once a student completes the coursework, Henry helps them get placed in a technology career. There are no upfront costs to the course, and students only start making payments once they get a job after graduating.

“Henry was founded to challenge the status quo of education in Latin America by giving access to high quality tech education to anyone who's willing to participate” said Martin Borchardt, CEO and Founder of Henry. “Our model aims to close the inequality gap in the region, by allowing anyone to have a career in software development no matter their location, gender, or background. Bringing onboard strategic partners will allow us to scale our business and keep on delivering our impactful mission in Latin America.”

Since its launch in March 2020, Henry has enrolled more than 800 students, and Henry graduates earn on average more than three times more than their previous incomes. Once graduates are employed, they are only charged 15% of their salary for two years, with a maximum total of US $4,000. Henry’s innovative and responsible approach to the ISA model has a lower impact on graduates’ salaries compared to similar offerings, and eliminates the potential for students to incur debt from the program.

“Henry’s role in providing affordable financing for high quality technical education can help address the multifaceted challenges of persistent income inequality, high unemployment, and a skilled worker shortage facing both students and employers in Latin America," said Michael Schlein, CEO and President of Accion.

“Henry is emblematic of what Accion Venture Lab sees as the next phase of inclusive fintech – startups that are thoughtfully and responsibly embedding financial services into their product offerings that address a real societal need,” said Vikas Raj, Managing Director of Accion Venture Lab.

“We invested in Henry because the team is talented and mission-driven," said Tim Brady, YC Group Partner. "Given the large unmet demand for software engineers, creating a school in Latin America to develop those engineers is a big opportunity, and this is the team to succeed.”

"Emles Venture Partners is proud to invest in Henry. We are dedicated to empowering companies that will positively change society - and Henry’s mission of providing high quality technology education in an emerging region is exactly what we look for in a partner.” said Emanuel Zareh, senior Vice President, Emles venture partners.

Henry’s completely remote courses allows students to continue their education during the COVID-19 pandemic, and graduates have been able to secure remote employment at leading tech companies across Latin America and the US. The virtual model has also allowed Henry to expand beyond its headquarters in Argentina to Latin America Henry currently offers a four-month full stack developer career program, which covers fundamental coding tools such as Javascript and front and back-end development, and gives students experience solving coding problems for real companies. The course is completely online but is interactive with classes occurring live, instead of pre-recorded and self-paced.

In early 2020, Henry raised an angel round from investors including Y Combinator, the world’s largest accelerator that invested in Rappi and Airbnb, and Tim Draper, who has invested in SpaceX, Skype and Tesla.
<p style="text-align: center;"><strong>###</strong></p>

<h2><strong>About Henry</strong></h2>
<a href="https://www.soyhenry.com/" target="_blank" rel="noopener noreferrer">Henry</a> is a computer science online and live school. In LATAM, the demand is high for technical workers. However, there's a small number of coding schools and a lack of technical talent. Henry's zero cost model provides opportunities for people to land high-paying jobs that pay on average 3x more — a life changing opportunity for a region that has the world's highest income inequality rates. Henry was founded to challenge the status quo of education in LATAM by giving access to anyone who's willing to participate in their intense curriculum. (Only 3% of Henry's applicants are admitted to the program.) Backed by Accion, YCombinator, Draper and other Lambda School investors, the company has raised US$ 1.5M to invest in talent throughout LATAM, it has more than 800 students enrolled, and graduates are already working remotely for companies in the US, Europe and all around LATAM. For more information, visit: <a href="https://www.soyhenry.com/" target="_blank" rel="noopener noreferrer">https://www.soyhenry.com/</a>
<h2><strong>About Accion Venture Lab</strong></h2>
Accion’s seed-stage investment initiative Accion Venture Lab provides capital and extensive support to innovative fintech startups that improve the reach, quality, and affordability of financial services for the underserved and have the potential to scale. Backed by commercial and impact investors since the launch of its third-party fund in 2019, Venture Lab has invested in more than 40 early-stage startups that operate in 30 countries worldwide. Venture Lab is a part of Accion, a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. Accion catalyzes financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of – or poorly served by – the financial sector. For nearly 60 years, Accion has helped tens of millions of people through our work with more than 160 partners in 55 countries. For further information, visit <a href="https://www.accion.org/venturelab" target="_blank" rel="noopener noreferrer">https://www.accion.org/venturelab</a>.
<h2><strong>About YCombinator</strong></h2>
Y Combinator (YC) is a startup fund and program. Since 2005, YC has invested in over 2,000 companies, and the combined valuation of YC companies is over $155B. YC has programs and resources that support founders throughout the life of their company. Startup School teaches the basics of starting a company. The YC batch program helps founders as they build their product, talk to their customers, and raise funding. Work at a Startup makes it easy for founders to find their first engineers. YC Series A helps founders launch their A round. YC Growth Program provides founders with resources to scale their companies and hire an executive team, and YC Continuity invests in their later stage rounds.

Henry closes US $1.5 million seed round led by Accion Venture Lab to provide technical education to students in Latin America

Most of Mexico’s people lack access to a formal bank account. Accion has worked in Mexico for decades to create a thriving and competitive financial sector that embraces innovation and protects its clients.

Around the world, small and medium businesses (SMEs) are the engine of economic growth and employment. Given the importance and market potential of SMEs, <a href="http://cfi-blog.org/2014/10/30/fueling-the-economic-engine-global-experiments-in-small-enterprise-lending/" target="_blank" rel="noopener noreferrer">a variety of new fintech players</a> have begun providing much-needed debt capital to a sector excluded from many formal financial services. There is a global <a href="http://www.worldbank.org/en/topic/financialsector/brief/smes-finance" target="_blank" rel="noopener noreferrer">SME credit gap of $1 trillion</a>, and within Latin America there is an <a href="http://inclusionhub.mastercardcenter.org/features/6007/reaching-the-last-mile-sme-finance-in-latin-america/" target="_blank" rel="noopener noreferrer">estimated gap of $250 billion</a>, with 2 million SMEs reported as unserved or underserved.

As new financing opportunities emerge to fill this gap, we at Accion Venture Lab and Quona Capital have seen interesting growth in startups innovating within the invoice financing space, more specifically in the well-established and expanding form of SME financing known as factoring. These startups include companies such as Bluevine, Fundbox, Finvoice, and Taulia in both the U.S. and Europe. Through our experience with strategic partners and startups in the sector, we are particularly excited about developments in Latin America, where regulators throughout the region are advancing a progressive financial policy shift unseen elsewhere on the globe.  As a result of mandating the use of electronic invoicing (e-invoicing), which enables the digital recording and verification of invoices for tax purposes, Latin American regulators are facilitating the emergence of digital solutions within financial services to help resolve the SME finance gap. We believe that regional policies such as e-invoicing are laying the rails for innovation in Latin America, resulting in an incredibly unique environment to build the future of digital invoice financing for the underserved.
<h2>What is factoring?</h2>
<a href="http://tfig.unece.org/contents/factoring.htm" target="_blank" rel="noopener noreferrer">Factoring</a> allows suppliers of goods and services to satisfy working capital needs by selling a percentage of their invoices at a discounted price to lenders (or “factors”) for cash. These specialized financial firms called factors calculate their discounted price offers based on suppliers’ credit, invoice validity, and the reputation of the buyer. After buying the invoices, the factors are paid the original invoice balance by the buyer of the goods or services at a later date. Factoring offers suppliers a way to eliminate the need to use high-cost financing options like asset-based lending to obtain cash liquidity and stronger balance sheet positions. It also mitigates the uncertainty surrounding the timing and amount of payments, allowing for superior cash flow forecasting capabilities.

<a href="http://tfig.unece.org/contents/reverse-factoring.htm" target="_blank" rel="noopener noreferrer">Reverse factoring</a> operates similarly to factoring, except that larger buyers guarantee payment of the invoices to lenders, and they negotiate credit lines that are made available to their suppliers for invoice financing. Reverse factoring is a more recent practice than traditional factoring; however, it is significantly more beneficial to SMEs, as the terms of the invoice financing are based on the credit of the buyer rather than the supplier. Because buyers typically have better credit than their suppliers, reverse factoring allows suppliers to access enhanced credit and terms that they otherwise would never have.
<h2>Latin America leading the innovation</h2>
As <a href="http://www.economist.com/news/finance-and-economics/21602274-reduce-tax-fraud-governments-encourage-automated-accounts-electronic" target="_blank" rel="noopener noreferrer"><em>The Economist</em></a> noted, “neither tax collection nor technology is an area in which one would expect Latin America to be a global trendsetter. But when it comes to mandatory e-invoicing—that is, forcing buyers and sellers to register invoices with the tax authorities electronically when a transaction takes place—the region is blazing a trail that others, from the European Union to China, are considering following.” This simple requirement has opened the floodgates of innovation, and there are many tech-enabled factoring and reverse factoring business models that embrace these e-invoices emerging in Latin America. The region is taking shape as a global leader in invoice financing, with Chile, Brazil, and Mexico already mandating e-invoicing and Guatemala, Ecuador, Uruguay, and Peru not far behind.

E-invoicing enhances transparency and efficiency of invoice processing. It removes manual invoice processing costs, decreases the time needed to send and receive transaction information, and reduces exposure to risks historically associated with manual processes, such as fraud. This technology has allowed factoring and reverse factoring businesses to dramatically decrease approval and processing times, a key value-add for SMEs with imminent liquidity needs. Additionally, because of a reduction in transaction costs, digital invoice financiers are able to serve SMEs typically deemed too small and unprofitable for traditional factors.
<h2>Startups jumping on the opportunity</h2>
Unsurprisingly, startups have seen e-invoicing as a huge opportunity to build better and faster invoice financing platforms. A few companies we have seen that are trailblazing in this space are:
<ul>
 	<li><a href="http://trefi.pe/" target="_blank" rel="noopener noreferrer">TREFI (Peru)</a> – The TREFI platform allows fiduciary agents to purchase SME’s accounts receivable at discounted rates while managing the risk held between the SME’s and the fiduciary agents, thereby strengthening the SME’s liquidity and enabling it to extend credit to its clients.</li>
 	<li><a href="https://www.mesfix.com/" target="_blank" rel="noopener noreferrer">Mesfix (Colombia)</a> – Mesfix is a marketplace that connects investors with SMEs wanting to sell their invoices and allows for multiple funders to finance a part or all of a certain invoice.</li>
 	<li><a href="http://innovafunding.com/" target="_blank" rel="noopener noreferrer">Innovafunding (Peru)</a> – Innovafunding is an invoice discounting marketplace that connects investors with SMEs wanting to sell their full invoices.</li>
 	<li><a href="https://www.facturedo.cl/" target="_blank" rel="noopener noreferrer">Facturedo (Chile)</a> – Facturedo allows SMEs to participate in auctioning their invoices in an easy, flexible, and fully online manner. Buyers will bid their invoices between investors to, ensuring the best pricing option.</li>
 	<li><a href="http://www.invoinet.com/english/index.htm" target="_blank" rel="noopener noreferrer">InvoiNet (Argentina)</a> – Invoinet is an open marketplace for reverse factoring electronic invoice financing. It connects suppliers and buyers with multiple lenders on a collaborative platform for electronic invoice management and financing.</li>
 	<li><a href="http://www.efactornetwork.com/" target="_blank" rel="noopener noreferrer">E-Factor Network (Mexico)</a> – E-Factor Network is a platform that enables electronic factoring services for participating suppliers who wish to discount account receivables.</li>
</ul>
We here at Accion Venture Lab and Quona Capital are convinced that some of the brightest innovation and strongest players in this new digital invoice finance space will emerge from Latin America. We are excited about these companies because they bring many of the exciting elements of fintech and financial inclusion into play: combining both data analytics and seamless user experience with enhanced credit accessibility for the underserved.

<em>By Jackie Hyland, Accion Venture Lab, and Adam Hartmann, director of operations at </em><em><a href="http://www.quona.com/" target="_blank" rel="noopener noreferrer">Quona Capital</a>.</em>

Innovating invoice financing: The future is now in Latin America

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Henry closes US $1.5 million seed round led by Accion Venture Lab to provide technical education to students in Latin America

Innovating invoice financing: The future is now in Latin America

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The Pandemic Will Not Deter Us