Priya Punatar

Amy Stewart

<p>After conducting user research, interviewers document observations, facts, quotes, and impressions shared by customers. As the information grows, key themes, patterns, and relationships start to emerge. We learned that people often feel stressed and alone in managing their finances and financial challenges, and that <a href="https://www.accion.org/five-reasons-small-merchants-arent-using-financial-services-in-chile" target="_blank" rel="noopener noreferrer">microentrepreneurs tend to keep track of their finances mentally</a>. These insights highlight the drivers of customer behavior and were used to guide the product concepts.</p>
<p>With Caja Popular Cerano, we conducted a co-creation session with potential users, empowering them as active participants in the design process. Typically, co-creation works the best when you have a very narrow problem you are trying to solve. In this instance we worked with small groups of youth to explore how financial service providers could build better trust relationships with young customers. Through co-creation sessions, participants discussed how trust emerges from healthy relationships, and developed a marketing campaign with the hashtag #FinancialLoveExists.</p>
<h3>Test products with customers in the field to see how they really react</h3>
<p>Speaking with customers will only get you so far in developing a sustainable product. Institutions should quickly move to translate insights into prototypes, giving form to product ideas so that they can move out of the office and into the reality of customers’ lives. Initial prototypes should be “quick and dirty,” allowing teams to explore and get feedback on many options before investing in detailed design and development. Prototyping is an opportunity to gather customer feedback and to assess their behavior. Beyond asking for reactions, likes, and dislikes, we also ask customers to share how, when, and where they would use the prototyped product.</p>
<p>As opposed to early prototypes, which are usually drawn or presented on paper, later-stage ‘usability’ prototypes are close to final fidelity and allow customers to interact with and explore the product flows. Ideally, these prototypes are hosted on the final technology platform and can be tested in a user’s environment. Interviewers simply provide the customer with the prototype and see how they interact – this helps the team get a sense of whether the product is intuitive, how long it takes to complete certain tasks, and what additional features might be required.</p>
<p>For example, microentrepreneurs reviewing the Organizame mobile application told us that when inputting the price of their products into the application, it would be useful to have the option to choose whether that particular product is sold with VAT (value added tax) or not. The development team is now working to build out this option.</p>


Brief

<em>Photo caption: By keeping desirability, feasibility, and viability in mind in product innovation, Accion worked with institutions across Latin America to develop scalable and sustainable products, including a financial health portal with </em><a href="https://www.accion.org/fintech-founders-have-a-formula-for-building-financial-health" target="_blank" rel="noopener noreferrer"><em>Destácame</em></a><em> in Chile. </em>

The financial services landscape is crowded with a wide array of offerings, but vulnerable and low-income people across the globe still struggle to find products that are designed to meet their needs. This gap has been amplified though the economic fallout from COVID-19, which has disproportionately affected those without the access, resources, or network to weather the storm. Now more than ever, low-income populations need customized and responsive financial products and services to recover from the crisis and restart in the new normal.

To address this gap, in recent years many financial service providers have turned to human-centered design (HCD) methodologies to better understand their clients’ wants, needs and aspirations, hoping to update their product offering and drive usage. While many organizations have this goal, very few have been able to deliver on it. Many human-centered products are based on thoughtfully designed and innovative ideas, but ultimately do not end up gaining traction with customers or are disbanded when institutional priorities shift. Sometimes institutions focus on customer needs but overlook real operational and business constraints. Others design from the board room, without taking into account the customer’s life and the complexities around financial decision making and end up solving for the wrong problem. To be sustainable, innovative digital products must balance the customer’s needs with organizational capacity and should be built upon a solid business case to ensure that the product is supported in the long term.

Accion, <a href="https://www.accion.org/accion-and-metlife-foundation-announce-expanded-partnership-to-advance-financial-inclusion" target="_blank" rel="noopener noreferrer">in partnership with MetLife Foundation</a>, is committed to delivering high quality, affordable solutions for the billions of individuals who are still underserved by the financial sector. We do this by working alongside financial institutions to design, build, launch and optimize innovative products, services, and experiences for low-income customers that are desirable (wanted by and useful for clients), feasible (achievable given the institution’s operations, technology and resources), and viable (make business sense)—so that the products make it from concept to commerce.

<img class="wp-image-22353 alignleft" src="https://content.accion.org/wp-content/uploads/2020/09/accionGraphics_Aug26_Key-Tenets.png" alt="Key tenets of innovation: feasibility, desirability, and viability" width="436" height="314" />

This paper outlines how financial institutions can develop innovative and sustainable financial solutions. It draws on our recent experiences working with financial services providers and fintechs in <a href="https://www.accion.org/achieving-financial-health-in-mexico-and-chile">Chile and Mexico</a> over the last two years to design and launch behaviorally-informed products that build customers’ financial capabilities and ultimately improve their financial health. While the products were not specifically designed to respond to the impacts of COVID-19, they aim to build resiliency to financial shocks and enable users to pursue opportunities over time.

This paper will cover how we leverage human-centered design and a strong focus on behavior to create more desirable products, how we evaluate institutional capacity to ensure feasibility, and how we get the business model and KPIs right to ensure the product is viable and justifiable for the business for the long term—even during economic shocks. For customers, this approach translates to more intuitive financial products and services that are aligned with their behaviors and help build their financial health. For financial service providers, this approach leads to innovative products that are sustainable, use internal resources efficiently, and achieve business goals.

<em>Using this approach in Chile, we developed a business management application with </em><a href="https://www.accion.org/this-new-app-is-helping-small-business-owners-build-financial-health-and-resilience" target="_blank" rel="noopener noreferrer"><em>Organizame and Banigualdad</em></a><em>, a financial health portal with </em><a href="https://www.accion.org/fintech-founders-have-a-formula-for-building-financial-health" target="_blank" rel="noopener noreferrer"><em>Destácame</em></a><em>, and a crowd-funding platform for microentrepreneurs with </em><a href="https://redcapital.cl/" target="_blank" rel="noopener noreferrer"><em>RedCapital</em></a><em>. In Mexico, we developed a savings product for youth with </em><a href="https://www.accion.org/young-people-in-mexico-need-finance-that-fits-their-lives" target="_blank" rel="noopener noreferrer"><em>Caja Popular Cerano</em></a><em>, and a supply chain finance product with </em><a href="https://www.ahorrosbienestar.com/" target="_blank" rel="noopener noreferrer"><em>Caja Bienestar</em></a><em>. </em>
<h2>Desirability — are we solving customer problems?</h2>
To combat the persistent issue of dormant accounts, financial service providers must design <strong><em>desirable</em></strong> products that people will want to use, that are intuitive, and that will generate value. Desirable products solve customer problems, and to identify the right problem, institutions need to go to the customer. HCD methodologies stress talking to and observing potential customers to gain perspective and empathy for their lives. We’ve found it just as important to analyze how customers make decisions — both consciously and subconsciously — and how they behave, using qualitative and quantitative data.
<h2>How can we ensure products are desirable?</h2>
<h3>Conduct client-centric user research that seeks to understand customer behavior</h3>
We begin every design process by conducting user research to understand what customers want and <em>why</em> they act the way they do. Interviewers are trained to take note of physical and emotional reactions, feelings, and expressions as well as customer surroundings, observing their daily lives and understanding their broader context.

While social distancing measures make in-person interviews difficult, we found that this can also be done remotely.  In Mexico, the team conducted remote video interviews with youth customers, and found that they were still able to capture non-verbal cues and build trust. Questions explore underlying attitudes that inform client decision-making. We listen closely to understand when participant behavior may have been affected by emotion, stress, or biases. This process helps us to ensure that we are building products that accommodate client realities, will align with how customers actually behave, and will make their lives easier.

To succeed, innovative financial products must be desirable, feasible, and viable

metlife-foundation

MetLife Foundation logo

Article

Since the COVID-19 pandemic brought economies to a screeching halt in early 2020, microbusinesses around the world have been forced to close their doors and many people’s financial lives have become uncertain. However, one thing is certain — men and women who own businesses are experiencing the pandemic and the subsequent economic fallout differently, and women are bearing the brunt of the crisis. Women are more likely to <a href="https://reliefweb.int/report/world/covid-19-and-women-s-economic-empowerment" target="_blank" rel="noopener noreferrer">participate in informal, low-wage work</a> in industries that are vulnerable to disruption during the pandemic and women-owned businesses are <a href="https://data.unwomen.org/resources/surveys-show-covid-19-has-gendered-effects-asia-and-pacific" target="_blank" rel="noopener noreferrer">less likely to have the reserve funds</a> necessary to help them survive a prolonged economic shock. Entrenched gender inequalities leave women and men with different resources available to them to plan for, manage, and recover from shocks.

At the end of 2020, <a href="/how-we-work/advise/accion-global-advisory-solutions" target="_blank" rel="noopener noreferrer">Accion Global Advisory Solutions</a> conducted a survey of 2,600 microentrepreneurs in Mexico and Chile to help financial service providers understand how their micro and small business clients were faring nine months into the pandemic. The survey results provided significant insight into the challenges women-owned businesses are facing due to the pandemic. Based on the findings from our research, we’ve outlined five ways that financial service providers (FSPs) can support women as they adapt their business and their lives during the pandemic:
<h3>1. Help women build the digital skills needed to stay resilient.</h3>
Our results found that women are nearly 16 percent more likely to be sole proprietors, while businesses owned by men are more likely to have multiple employees. Though this means women entrepreneurs may have fewer employee expenses, it also means that, even in good times, they are often managing every aspect of their businesses completely on their own. Many of these sole proprietorships who were accustomed to selling and marketing their products in person were unprepared to operate digitally. We’ve found that when micro enterprises have digitized at least part of their business, or reimagined their business altogether, they are better off during the pandemic. Edtech platforms and programs, such as <a href="/how-the-pandemic-is-spurring-microentrepreneurs-to-go-digital" target="_blank" rel="noopener noreferrer">Accion’s Ovante</a>, offer quick and easy-to-follow lessons that equip women entrepreneurs with the digital skills and confidence to move their businesses online, retain their loyal clientele, and potentially expand their operations during lockdown.
<h3>2. Incorporate “tech and touch” into products.</h3>
We know that building trust between financial institutions and their customers <a href="/in-a-no-touch-world-tech-cant-leave-low-income-people-behind" target="_blank" rel="noopener noreferrer">through human connection</a> is essential to client retention and product adoption. As many FSPs have moved their operations online during the COVID-19 crisis, they’ve risked leaving some clients behind — in particular, those who have lower levels of education and are less familiar with digital products and services. In our survey, women entrepreneurs reported lower education levels than their male counterparts, especially for technical school or higher education completion. We found that these lower education levels are correlated with greater distrust in digital financial products.

Human touch can be critical to lowering barriers to entry for these important resilience-building products, and many FSPs have found ways to cultivate personal connections with their customers despite social distancing measures. Financial service providers can utilize call centers or assisted onboarding to reach customers one-on-one to explain the value of digital products, teach them how to use them, and engage customers in a more meaningful manner. Investing in strategies that combine human interaction with technology will ensure that more women entrepreneurs join the wave of digitization. With access to and support in using digital tools, they’re better equipped to navigate the new normal, rethink or restart their businesses, and build their financial health so that they can be resilient to any future crises.
<h3>3. Prioritize savings products that meet the needs of women.</h3>
Global trends indicate that women are stronger savers than men, with <a href="https://www.findevgateway.org/paper/2020/11/gender-data-financial-inclusion" target="_blank" rel="noopener noreferrer">lower loan-to-deposit ratios</a>. At the same time, they’re also <a href="https://media-weconnectinternational-org.s3.amazonaws.com/2020/10/COVID-Infographic-Q2-Final.pdf" target="_blank" rel="noopener noreferrer">less likely to have reserve funds to help their businesses survive economic shocks</a>. Our own findings in Chile and Mexico show that the women entrepreneurs surveyed had on average 10 percent fewer reserve funds available for emergencies than men. This means that although women have a higher propensity to save, they face barriers doing so formally through savings products, making them more vulnerable during crises. To prepare their women clients for future economic downturns, financial service providers need to design savings products that specifically meet the needs of women and incentivize the opening of savings accounts. This incentivization might involve the launch of a savings product — like <a href="https://financialallianceforwomen.org/news-events/bank-al-etihad-amplifies-impact-jordanian-women/" target="_blank" rel="noopener noreferrer">Shorouq by Bank al Etihad</a> — that is coupled with a rewards program which recognizes the financial goals of women like saving for children’s education or owning a home.
<h3>4. Engage women entrepreneurs with practical advice on business survival.</h3>
During this crisis, many women are experiencing a disappearance of sales, forcing them to dip into savings to rescue their business, or take on more debt to keep their business afloat. These women entrepreneurs in our survey reported being more focused on their businesses’ survival than business growth and more likely to indicate they are exploring other sources of income or have thought about shuttering their businesses. Male respondents, though also seeing disappearing sales, were more likely to consider expanding their businesses or to rethink their business models in response to the crisis. These findings emphasize that women business owners are struggling to keep their businesses afloat and need guidance to weather this tough time. While pivoting business models and implementing marketing techniques might be key to keeping business doors open, women often lack the time, resources, and support needed to undertake these activities. Financial service providers can play a critical role in helping women entrepreneurs find innovative ways to pivot and strengthen their business during this time.
<h3>5. Meet women where they are by recognizing their day-to-day responsibilities and stressors.</h3>
<blockquote class="pullquote--right">49 percent of women reported spending more time tending to children since the onset of the pandemic, while only 7 percent of men reported the same.</blockquote>
Nearly two-thirds of women surveyed reported feeling more tired since the pandemic struck, and more than half reported greater emotional distress. Our survey analysis indicates that women entrepreneurs are spending significantly more time taking care of their children than their male counterparts. Forty-nine percent of women reported spending more time tending to children since the onset of the pandemic, while only seven percent of men reported the same. Women entrepreneurs who are also caretakers need convenient and easy-to-use financial and business management products that allow them to stay home while tending to their businesses. That being said, reports have also shown <a href="https://www.theguardian.com/society/2020/mar/31/call-for-uk-domestic-violence-refuges-to-get-coronavirus-funding" target="_blank" rel="noopener noreferrer">sharp surges in reported domestic violence</a> around the world as a result of the lockdown. Offering non-financial services — such as hotlines to connect with experts in gender-based violence or telehealth services — has been found to be highly impactful among women.

The vulnerabilities of women during a crisis like COVID-19 are significant and concerning. With this in mind, <a href="/eight-ways-financial-service-providers-can-drive-economic-recovery" target="_blank" rel="noopener noreferrer">Accion Global Advisory Solutions is creating products</a> that help women stay safe and financially healthy during this trying time. We created new modules focused on the crisis for Accion’s interactive edtech platform, Ovante, to help microentrepreneurs adapt their businesses without ever leaving home. This type of flexible education is perfect for women entrepreneurs, who are — as we have seen — strapped for time due to an increase in household responsibilities, and less likely to understand or trust financial products and business strategies that are essential for business survival.

Accion continues to work closely with our financial service provider partners to design additional products that meet the everyday needs of women and equip women entrepreneurs with the knowledge and tools they need to survive this pandemic and build resiliency for the future.

5 ways to help women entrepreneurs adapt during COVID-19

Cecilia Polanco Tueros is a picture of resilience.

Even before the pandemic, she was no stranger to overcoming adversity. After a bad robbery, her family lost everything and went bankrupt. Her husband had to seek out a new job where he could bring in more income, and Cecilia took over the corner store that had previously been run by her mother-in-law.

Running her store keeps her busy every day, but she’s always working to balance the needs of her business and her family. While her three sons are now in their teens and twenties, Cecilia still makes time to be in their lives as much as she can — stepping away from the store to make breakfast for everyone and reconvening the family for lunch each day. She takes particular care to be there for her oldest son, who has Autism Spectrum Disorder. Before the pandemic, she arranged for him to get the therapy and support he needed over the years, and she is proud of the independent young man that he’s growing into. Being able to work close to home and tend to her family’s needs is important for Cecilia since she has to work such long hours, from before sunrise until late into the evening.

Cecilia and her family quickly felt the effects of the pandemic when it reached them in Lima, Peru. “COVID-19 was and still is very hard on us, as a family and as a business. Thank God neither me, nor my immediate family got infected. Sales are down, people are not coming as much, and they do not have money to spend,” she says. Though her store sells food and everyday essentials, many people in her community are struggling and buying less.

One thing that’s helping her manage while her sales have dropped is working with Tienda Pago. Accion partner Tienda Pago provides working capital for small merchants in Peru and Mexico so they can manage their inventory needs without being at the mercy of cash flows. This allows them to buy what they need and take advantage of busy times to sell more merchandise and grow.

“Tienda Pago is a solution,” says Cecilia, a smile breaking over her face. “It’s like a salvation, you might say!” She wasn’t so sure about trying it at first — “I hate taking a bank loan. I never do it,” she explains. But with Tienda Pago, the credit is so short-term she repays within a week and doesn’t lose a sense of control over her finances. Even though the loans are small, she’s still able to come out ahead.

Cecilia hasn’t been able to stock as many items in her store in the past year because of her decreased sales. The support she receives from Tienda Pago has helped her to stay afloat. “Tienda Pago helped a lot and keeps helping us. Tienda Pago did not charge me interest or late fees for the period we were in quarantine and not buying products.” Their team is staying in touch with Cecilia through phone calls and their digital app while they’re unable to visit in-person during the pandemic. <a href="https://www.accion.org/what-it-takes-for-one-family-business-to-stay-open" target="_blank" rel="noopener noreferrer">Tienda Pago is focused on helping small shop owners</a> like Cecilia through this crisis so they can stay in business long-term.

While Cecilia is still fighting to get through the challenge of COVID-19, she’s holding onto her dreams for the future. Access to working capital opens opportunities for small business owners to endure challenges and grow when sales rebound. Since she began using Tienda Pago’s services, Cecilia has found she can stay afloat during difficult times, and when things are good, she can order more merchandise for the shop and have money to spend on the things her sons need. Her oldest son has taken workshops to help him gain more skills and independence, her middle son has begun working as a dental technician, and her youngest is doing well in high school. “I want to grow, I want to expand,” she says, looking ahead to the future. Her dreams are growing bigger, too, as she envisions college degrees and professional careers for her sons, and hopes they’ll be able to support and take care of each other. Cecilia’s store is more than a job; it’s a pathway to a better future for her entire family.

A family business offers renewed hope and resilience

When I reflect on 2020, I’m struck by the resiliency we’ve seen at every turn — from our employees, our partners, and especially, from the end clients that they serve. The obstacles have often felt insurmountable: there are predictions that anywhere between 20 and 30 percent of micro, small, and medium enterprises (MSMEs) in emerging markets will permanently close. Yet so many of these entrepreneurs are working hard to recover or to reinvent themselves.

While there is still a long road ahead in economic recovery from the COVID-19 pandemic, we have reasons to be optimistic about the coming year and the ability of our partners in financial inclusion to adapt and support their clients. A few of our partners — Kshama Fernandes, Managing Director and CEO of <a href="https://www.northernarc.com/" target="_blank" rel="noopener noreferrer">Northern Arc</a> in India, Taiwo Joda, Managing Director of <a href="https://www.accionmfb.com/" target="_blank" rel="noopener noreferrer">Accion Microfinance Bank</a> in Nigeria, and Kurt Koenigsfest, CEO of <a href="https://www.bancosol.com.bo/" target="_blank" rel="noopener noreferrer">BancoSol</a> in Bolivia — <a href="/leadership-in-the-time-of-covid-19-navigating-the-next-chapter" target="_blank" rel="noopener noreferrer">recently gathered</a> to reflect on the past nine months. They discussed how they have continued to adapt since the beginning of the pandemic, the difficult lessons they’ve learned <a href="/how-do-we-drive-an-inclusive-recovery-from-covid-19" target="_blank" rel="noopener noreferrer">since we first convened this group for a webinar in June</a>, and how they plan to meet the needs of their low-income clients in 2021.
<h2>How Accion Microfinance Bank, BancoSol, and Northern Arc are meeting the needs of small businesses</h2>
Small businesses have always played a crucial role in economies around the world, and supporting them has never been more urgent for our microfinance partners. BancoSol and Accion Microfinance Bank (Accion MfB) have many years of experience providing high-quality microfinance services to their clients through various challenges, but the COVID-19 pandemic has forced these banks to be flexible in new ways.

In addition to offering <a href="/how-do-we-drive-an-inclusive-recovery-from-covid-19" target="_blank" rel="noopener noreferrer">extra support with banking services</a>, BancoSol provided food staples, such as rice and sugar, to all clients who made voluntary repayments during the country’s 180-day moratorium. In Nigeria, Accion MfB also provided food to those whose likelihoods were affected. Additionally, to help clients pivot and succeed, Accion MfB started a special training program with experts on small businesses to engage their clients on how to restart or reinvent their businesses and partnered with online, commercial stores, and digital merchant platforms to enable about 4,000 of their customers to sell their products and services online.

Our partner Northern Arc is a financial inclusion platform that offers credit to the underbanked by supporting more than 150 financial institutions that serve millions of low-income borrowers all over India. They’ve provided loan repayment moratoria to support many of their clients. When financial institutions can take some pressure off of small business owners who are struggling with liquidity issues, these entrepreneurs can focus on meeting the needs of their community. Northern Arc shared that they’ve even seen interest in entrepreneurship increase during the pandemic as people seek new opportunities to replace the livelihoods they’ve lost.
<h2>Lessons learned since the start of COVID-19</h2>
While all three of these partners have been working on <a href="/data-is-crucial-for-driving-inclusive-growth" target="_blank" rel="noopener noreferrer">digital strategies</a> for several years, the pandemic pushed them to evolve at a faster pace to meet increasing client needs in an environment with new challenges, including lockdowns, moratoria, and public health concerns. As Taiwo noted, “The pandemic created a high level of urgency for us to continue on our <a href="/accion-microfinance-bank-adopts-risk-management-systems-in-nigeria" target="_blank" rel="noopener noreferrer">digital journey</a>.”

To make it easier for clients to access funding remotely during the pandemic, Accion MfB initiated an agent banking initiative, began using additional digital channels, and creating digital loan products where clients, especially those located in remote areas, can apply for loans. BancoSol also expanded the rollout of their virtual lending app so that more people could access banking services from their phones rather than rely on branches during Bolivia’s lockdown Between September 2019 and September 2020, transactions on BancoSol’s app increased by 141 percent.

As digital financial tools become more essential, all of our partners emphasized the need to combine tech and touch to reach customers where they are. As Kurt put it, “I think technology is going to help. It’s a powerful tool, but microfinance is a high-touch model.” Both Kurt and Taiwo stressed the importance of having staff guide their clients through the process of setting up digital accounts so they have the skills and confidence to use them effectively. Companies that find ways to continue to improve on efficiencies that can be gained from today’s digital world while still cultivating a personal relationship with their clients will ultimately have the best chance of succeeding in the long term.
<h2>Looking ahead to the next chapter of recovery</h2>
<blockquote class="pullquote--right">“Very quickly we saw that life must move on, and we just sort of kept at it…this was the momentum that kept us going, one foot after another”</blockquote>
As we’ve walked through this crisis with our partners, we’ve witnessed their resiliency and optimism. Because institutions like BancoSol, Accion MfB, and Northern Arc were prepared and flexible prior to the pandemic, they were able to quickly pivot and adapt as they were faced with challenges they had never encountered before. “The beginning of the pandemic, it seemed a little bit like doomsday. Very quickly, we saw that life must move on, and we just sort of kept at it, whether it was at the institutional level, the investor level, the client level, the employee level, and I think this was the momentum that kept us going, one foot after another,” said Kshama.

Though financial service providers have already made significant changes to adapt during the pandemic, much work lies ahead. COVID-19 continues to fuel uncertainty around the globe and has an outsized impact on vulnerable populations, but our partners are up to the challenge of helping people and small businesses most in need of support. Accion is working with our partners to provide the best solutions for these entrepreneurs to stay financially resilient and take their next steps to recover. We believe our partners, especially those that leverage data and technology effectively, will emerge with a better understanding of how to best meet their clients’ needs.

<a href="/leadership-in-the-time-of-covid-19-navigating-the-next-chapter" target="_blank" rel="noopener noreferrer">Hear more from Kshama, Taiwo, and Kurt here</a>, and learn about challenges and success stories from our partners around the world <a href="/covid19" target="_blank" rel="noopener noreferrer">here</a>.

Moving beyond “doomsday”: Inclusive finance in the time of COVID-19

Despite the great strides made to accelerate global financial inclusion in recent years, women are still more excluded and harder to reach with financial services than men in most developing countries. Many women run small businesses from their homes and are more likely to be shut out of the formal economy. Women often have <a href="https://www.poverty-action.org/sites/default/files/publications/Womens-Economic-Empowerment-Through-Financial-Inclusion-Web.pdf" target="_blank" rel="noopener noreferrer">fewer opportunities</a> to gain an education, earn an income outside of their household, own land, inherit assets, and control their own income and financial futures.

In many developing countries, social norms continue to hold women back. From beliefs that women are meant to be caregivers and shouldn’t spend their time running a business to a reluctance to trust women to make financial decisions at all, these norms perpetuate gender gaps. In many Middle Eastern countries, opening an account requires approval from a male guardian. Furthermore, while mobile phone access continues to grow rapidly across the developing world, women are less likely than men to be digitally and financially literate or to own phones.

When it comes to lifting families out of poverty, fighting hunger, and educating the most vulnerable children, it’s crucial that we find ways to support women microentrepreneurs and small business owners. When women are able to earn a secure income, they are <a href="https://res.torontocentre.org/guidedocs/Barriers%20to%20Womens%20Financial%20Inclusion.pdf" target="_blank" rel="noopener noreferrer">more likely</a> than men to spend it on child welfare, including school tuition and medical care, household utilities, and food. Financial security also tends to empower women, giving them a role in the decision-making process in their households. Beyond empowerment and poverty reduction, supporting female entrepreneurs boosts economic growth, with estimates suggesting that advancing women’s equality can add <a href="https://www.mckinsey.com/featured-insights/employment-and-growth/how-advancing-womens-equality-can-add-12-trillion-to-global-growth#" target="_blank" rel="noopener noreferrer">$12 trillion to the global economy</a>.

Innovative products and services, including new digital financial service offerings, can help us reach more women and close the financial inclusion gender gap. Fintech is already playing a <a href="https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2020/06/29/The-Promise-of-Fintech-Financial-Inclusion-in-the-Post-COVID-19-Era-48623" target="_blank" rel="noopener noreferrer">major role</a> in closing gender gaps in Middle Eastern and African countries. In Côte d’Ivoire, for example, women are <a href="https://deeply.thenewhumanitarian.org/womensadvancement/articles/2018/04/19/gender-gap-in-bank-account-ownership-hasnt-shifted-in-seven-years" target="_blank" rel="noopener noreferrer">just as likely</a> as men to have a mobile money account, while men are twice as likely as women to have a traditional bank account.

However, in many Asian and Latin American countries, traditional financial inclusion services tend to do more to close gender gaps than digital ones. Part of the variation across countries can be explained by obstacles that digital tools cannot directly overcome, such as social and cultural norms. Regulators can play a role in shifting norms by introducing legislation promoting gender equality while taking into account the beliefs and the contextual constraints that shape those norms. For example, they could remove any regulatory barriers that restrict women from having their own bank accounts.

Nevertheless, digital solutions appear particularly well adapted to the other constraints women face. We’re supporting an array of financial service providers that bundle digital financial products with the educational services needed for women to gain the skills and comfort needed to use them properly.

Our partner DAWN Microfinance in Myanmar — where the population has rapidly adopted smartphones in recent years — embraced their own digital transformation and is now implementing digital field applications to help loan officers better serve their clients, most of whom are women. DAWN is also leading training sessions to reach the women-led businesses that lack access to formal financial services. No longer having to undertake much of the loan process manually, loan officers can spend more time finding and supporting clients.

[caption id="attachment_22007" align="alignright" width="356"]<img class="wp-image-22007 " src="https://content.accion.org/wp-content/uploads/2020/08/Daw-Amar-Myint_3-Swenyein-Swenyein-1-300x225.jpeg" alt="" width="356" height="267" /> <em>Daw Amar Myint prepares delivery meals from her restaurant in Yangon, Myanmar.</em>[/caption]

“Finally, I can spend more time with my customers,” DAWN loan officer Aye Aye Myint <a href="/women-entrepreneurs-empowered-by-technology-in-myanmar" target="_blank" rel="noopener noreferrer">tells us</a>. “The women we are helping now are running their own businesses. They are standing on their own two feet … some women can now rent and open big stores when they used to have just small shops.”

Daw Amar Myint, a client of DAWN, owns a small restaurant serving up traditional Myanmar cuisine in Yangon, Myanmar. When the pandemic hit, she was forced to close her doors and <a href="/digital-tools-open-opportunities-for-struggling-business-owners" target="_blank" rel="noopener noreferrer">turned to social media to sell delivery meals online instead</a>. Because she’s able to sell online, she’s better positioned to withstand the pandemic. DAWN is giving their small business clients like Daw Amar increased support and flexible payment options so they can overcome this crisis and thrive into the future.

Ovante, our <a href="https://www.worldsummitawards.org/2019/12/10/meet-the-40-winners-of-2019/" target="_blank" rel="noopener noreferrer">award-winning</a> digital business education platform has made a major impact on the lives of women entrepreneurs across Latin America. Using interactive tools, including videos and techniques like gamification, Ovante helps users become more financially and digitally savvy. 92 percent of its users say it is their first time using a digital platform.

Margarita, one of over 12,700 woman entrepreneurs Ovante has supported, significantly <a href="/margarita-prepares-her-business-for-the-digital-age" target="_blank" rel="noopener noreferrer">improved her florist business</a> using the financial and digital concepts she learned from the platform. Ovante is providing her with exposure to digital technology as she learns how to organize her finances, reach new customers, and use social media marketing and branding. Entrepreneurs can complete Ovante’s online modules at home at a time that best suits their schedule. In discussing why flexibility matters to her, Margarita exclaimed, “I think it is very helpful that Ovante is digital because you can use it anywhere! It also solves the problem of limited availability of time because there is no set time to use this platform, which makes it more convenient.”

<img class="aligncenter wp-image-17329 size-large" src="https://content.accion.org/wp-content/uploads/2019/01/2018_Accion_Ovante_0083-1024x683.jpg" alt="" width="1024" height="683" />

Karen Yesenia Torres Villamizar and her family own a bakery in Bucaramanga, Colombia. Because her business had always been cash-based, and Karen only sold to her customers in-person at her physical store, she had to adapt quickly during the pandemic. Because she gained the knowledge and confidence to use digital tools from Ovante, <a href="https://www.accion.org/how-the-pandemic-is-spurring-microentrepreneurs-to-go-digital" target="_blank" rel="noopener noreferrer">Karen found a way to keep her business open</a> for delivery by promoting and selling her sweets online.

Innovative financial products and services can help women entrepreneurs like Daw Amar, Margarita, and Karen overcome the digital and financial literacy barrier that many women face. When financial service providers can develop digital tools that can be used entirely from home, without the need for face-to-face interactions that might otherwise prevent women from accessing them, more doors open for women entrepreneurs. However, providers must consider how they can develop products to reach women who don’t have reliable access to smartphones and digital tools, otherwise, they risk worsening the digital gender divide. As women become financially empowered by new opportunities, they can break through arbitrary barriers they have faced because of their gender. While financial providers may not be able to address cultural and social norms head-on, they can play a critical role in helping women overcome them.

Digital tools open opportunities for women to thrive

Small businesses play a vital role in communities around the globe, not only by providing goods and services, but by creating jobs. In fact, <a href="https://www.worldbank.org/en/topic/smefinance" target="_blank" rel="noopener noreferrer">half of the world’s jobs</a> come from micro, small, and medium enterprises (MSMEs). Small businesses alone account for <a href="https://www.worldbank.org/en/topic/smefinance" target="_blank" rel="noopener noreferrer">half of the global GDP</a>. For many of these businesses, accessing finance is a struggle. We’re constantly working to find and invest in financial service providers that empower the world’s MSMEs, especially in the poorest regions. As access to mobile phones and the internet grows, digital financial services have the power to bring much-needed support to the most vulnerable communities and ultimately open opportunities for new jobs.

Digital financial tools that are accessible via mobile phone have been a game-changer for financial inclusion. In sub-Saharan Africa, the percentage of adults with bank accounts increased from <a href="https://globalfindex.worldbank.org/sites/globalfindex/files/referpdf/IFC088%20-%20FINDEX%20Note%201_DRAFT%202.pdf" target="_blank" rel="noopener noreferrer">34 percent to 43 percent between 2014 and 2017</a>, and the majority of these gains can be attributed to mobile money accounts.

<a href="https://www.gsma.com/newsroom/press-release/gsma-5g-moves-from-hype-to-reality-but-4g-still-king/" target="_blank" rel="noopener noreferrer">GSMA estimates</a> that, by 2025, over 70 percent of the world’s population will have mobile phones. This growth will be driven by developing countries with the most underbanked populations, creating vast potential to bolster MSMEs and ultimately boost job creation.
<h2>Helping microentrepreneurs embrace digital tools</h2>
Still, barriers stand in the way of some MSMEs’ ability to embrace technology. Young microentrepreneurs tend to be tech-savvy but older ones tend to be less confident transitioning to new, unfamiliar tools. We’re investing in financial service providers (FSPs) with innovative strategies to train microentrepreneurs to confidently use digital tools that will help their business survive and grow.

Helping microentrepreneurs is especially urgent as COVID-19 has wreaked havoc on traditional, in-person businesses. MSMEs that have at least partially digitized their business and can accept digital payments have proven to be more resilient. Our FSP partners are on the frontline of the pandemic supporting the most underserved essential businesses — including mom-and-pop shops that sell food and medicine. , These institutions are accelerating their own digital transformations and helping their customers to embrace digitalization as well. They are rapidly designing new digital products and training clients to use digital tools so that these vital businesses can stay open and keep providing jobs in their community.

In Nigeria, our partner <a href="https://www.accionmfb.com/" target="_blank" rel="noopener noreferrer">Accion Microfinance Bank</a> has helped ensure that MSMEs can continue to sustain local economies and create jobs. Their digital products and services include a mobile app that allows customers to access financial services remotely, which has seen broader use after a recent marketing boost. Interbank transfers and mobile airtime purchases made through the app have increased far beyond pre-pandemic levels. Accion Microfinance Bank sends agents to support customers who can’t access digital channels or safely visit a branch, and hosted a series of well-attended free webinars to support their customers. They're now working to expand their agent network even further to bring financial services to customers in hard-to-reach locations.
<h2>Leaning on fintech innovation to close credit gaps</h2>
As established financial institutions are driving financial inclusion by creating useful digital financial tools, fintech startups are also helping to close gaps in underserved communities through innovative products and services. In Mexico, there are over 5 million MSMEs, but commercial banks often refuse to serve them because they are small, informal, and not seen as profitable, or because their owners lack credit history. Informal lenders exist but often charge exorbitant interest fees. Our fintech partners in the region, however, have developed innovative digital lending services that can close the credit gap.

<a href="https://konfio.mx/" target="_blank" rel="noopener noreferrer">Konfio</a> is an online lending platform that uses innovative credit algorithms and alternative data analysis to help MSMEs in Mexico obtain affordable working capital loans. Along with investing in them, Accion Venture Lab sent a team to help them define priority geographic areas and customer segments so that they could identify where to focus their marketing efforts and expand their product offering. By creating products that respond to customer needs, Konfio has grown from serving a few hundred businesses in 2014 to being the leading online lending platform for small businesses in Mexico and a global model for how inclusive fintech can be successful.

<a href="https://www.tiendapago.com/" target="_blank" rel="noopener noreferrer">Tienda Pago</a> is another fintech partner that currently operates in Peru and Mexico. They use a digital platform to provide digital supply chain finance services to underserved small businesses. They’re supporting mom-and-pop stores to help finance the upfront purchase of the goods they sell. Tienda Pago’s agents work with existing supply chains and provide one-on-one guidance through onboarding before their algorithm analyzes data collected by the agent to produce a credit score and loan amount. While the management of the loan payouts and the payments for consumer goods deliveries is through their digital app, the Tienda Pago staff is only a call or text away if needed.

When small businesses have access to high-quality and fair financial services, they are better able to survive the shocks of crises like the COVID-19 pandemic, keep the employees they’ve hired, and eventually create more jobs. Digital technology, along with proper training and customer support, has proven to be an indispensable facilitator when it comes to supporting underserved microentrepreneurs in the world’s poorest regions. As mobile phone and internet access spreads, we’ll continue working to open opportunities to underserved small businesses so that they can thrive and help their communities prosper.

Opening opportunities for job creation in developing countries

Read stories and insights that show why financial inclusion is more critical than ever.

Responding to COVID-19

Listen to our podcast exploring how entrepreneurs and investors are navigating COVID-19.

VentureKast: Rebuild

Learn how digital supply chains support merchants while driving financial inclusion.

Supply Chain Finance 

Stories, videos, and photos show how financial inclusion has helped people across the globe.

The real impact of financial inclusion

Meet the women at Accion and our portfolio partners who are helping empower women globally.

Women building a better future

Series

Guangwen Liu started his sportwear business with one shop and a dream to expand his business to a chain of retail stores in Inner Mongolia. By partnering with <a href="http://grassfin.com/" target="_blank" rel="noopener noreferrer">Grassland Finance Limited</a>, a financial service provider focused on micro and small businesses across China, he grew his business from eight stores to 43 in ten years. But his business success hit a major obstacle when the coronavirus outbreak escalated and lockdowns went into place, forcing his storefronts to close and cashflow to plummet. When his sales dried up, Guangwen needed to find a way to pay for his rent, staff, and loan repayments.

Without any foot traffic in his stores, Guangwen had to explore new sales and marketing channels to continue getting his products in front of consumers. With encouragement from Grassland and inspiration from the rising trend of using streaming to sell products, he quickly decided to hire an online streamer and employees began livestreaming product demonstrations from inside the stores to engage with customers remotely. Across China, livestreaming has gained huge popularity, thanks to new platforms like Taobao, TikTok, Kuaishou, and Huoshan. Guangwen’s business gradually build a firm footing on livestreaming platforms. Many businesses have joined their customers online and began using these popular livestreaming platforms to showcase their products and answer customer questions in real time. Even farmers are using livestreaming to promote and sell agriproducts in China, especially flowers and fruits, during the pandemic.
<h3>Grassland evolves to support small business clients</h3>
Many of Grassland’s small business clients have quickly adapted their businesses to solve for coronavirus-related challenges, from livestreaming products like Guangwen to opening online stores on e-commerce platforms. To help these clients succeed, Grassland itself also needed to adapt in order to support these small businesses in new ways. They began offering increased business advisory services to help their clients generate sales and rebuild their cashflow during China’s lockdown and reopening.

[caption id="attachment_21880" align="alignleft" width="355"]<img class=" wp-image-21880" src="https://content.accion.org/wp-content/uploads/2020/07/grassland2.jpg" alt="" width="355" height="514" /> <em>Limin Liu’s shops sell specialty foods and snacks in an airport in Inner Mongolia.</em>[/caption]

Grassland client Limin Liu owns several specialty food stores located at airports in Inner Mongolia. When airport traffic stopped at the beginning of the year, he was forced to close his stores and all staff stayed home for safety. With no ability to sell goods in airports without any travelers, Limin found himself with a sudden need to pursue multiple sales channels. For the first time, he is selling online. Grassland helped Limin transition to digital sales by connecting his business with local e-commerce platforms. As air travel slowly resumed in China, the Grassland team advised the business to attract customers back into stores by offering free masks with each purchase and services to assist senior travelers with filling out the new required health check forms. Store traffic improved with these new services.

While Grassland supports microentrepreneurs like Limin on an individual basis, they’re also considering the impact of the pandemic on broader client segments. Grassland conducted an analysis with the support of Accion to identify the best ways to serve their clients across different industries during this difficult time. As a result, they’ve implemented other measures to help their clients, like offering flexible loan repayment terms and restructuring, applying to waive COVID-19-induced delinquency from client’s credit record, and increasing digitalization of their products. Entrepreneurs are finding new ways to survive in our new normal, but they need support from their financial providers to succeed.

Entrepreneurs get creative to rebuild their businesses in China

Accion’s partners have always used innovative approaches to bring financial inclusion to underserved people and businesses in emerging economies. The coronavirus pandemic has put their spirit of innovation to the test as they must find new ways to continue serving clients while protecting their wellbeing and that of their employees.

We’re sharing examples of adaption from our partners around the globe that we hope will be helpful for all organizations to keep in mind when considering client and staff safety and business continuity during a time of constant changes.
<h3>1. Ensure staff has the equipment and education to do their jobs safely.</h3>
Our partner <a href="https://www.accion.org/this-company-is-making-healthcare-more-accessible-in-emerging-markets" target="_blank" rel="noopener noreferrer">Field Intelligence</a> is a startup operating in Nigeria and Kenya that uses data-driven supply chain management software and highly efficient distribution service to help pharmacies operate more efficiently. Their pharmacy clients remained open throughout the pandemic to provide necessary services in their communities. As a preemptive measure, Field Intelligence completed a handwashing and safety campaign to encourage 150 pharmacies to use safe practices that prevent the spread of the virus. They also supplied and trained all of their delivery staff on proper personal protective equipment usage. By tapping into their existing network, they were able to quickly provide training to their staff. These steps were critical for keeping essential workers safe over the past few months. As many countries begin to reopen and ease restrictions, businesses should prioritize safety above all else and provide the training and equipment that staff and clients need.
<h3>2. Enable staff to provide customer support remotely.</h3>
<a href="http://apolloagriculture.com" target="_blank" rel="noopener noreferrer">Apollo Agriculture</a>, another startup in Kenya, partners with small-scale farmers to help them access everything they need to maximize their profitability, from financing and insurance to farming products and optimized advice. These <a href="https://www.accion.org/this-agricultural-fintech-empowers-the-farmers-who-feed-the-world" target="_blank" rel="noopener noreferrer">farmers are facing great challenges</a> during the pandemic and Apollo empowers them to be productive and sustainable. To continue providing customer support to farmers, Apollo faced a major challenge: transitioning their call center of over 150 people to remote work. Most of their call center agents did not previously have internet or a computer in their home. Despite these challenges, Apollo successfully transitioned the entire team to remote operation and equipped all staff with reliable internet in a matter of days — all during their busiest time of year and the COVID-19 crisis. As remote work may continue for some time, staff need to be fully equipped to work remotely to make these solutions sustainable in the long-term.
<h3>3. Innovate to meet customer's needs digitally.</h3>
In Bolivia, <a href="https://www.accion.org/transforming-finance-low-income-people-bolivia" target="_blank" rel="noopener noreferrer">BancoSol</a> — a regulated commercial bank dedicated to serving micro and small entrepreneurs — knew that their customers needed urgent services to stay afloat during the pandemic and that digital tools would be crucial for reaching them. BancoSol launched a pilot of a remote lending program and is also working on revamping their existing mobile application to serve more clients digitally. Additionally, tellers are encouraging clients to sign up for online banking services and begin using them to minimize face-to-face contact and continue to be able to manage their businesses and connect with customer service representatives. So far, results from BancoSol’s initiative have been encouraging — in the first ten days of their efforts, online transactions increased by five percent, and transactions have continued to rise since then.
<h3>4. Make a plan to keep your team safe and productive in the long-term.</h3>
As China has reopened its economy and more people have returned to work, conversations with our partner <a href="https://www.accion.org/giving-customers-a-reason-to-trust-digital-finance-in-china" target="_blank" rel="noopener noreferrer">Grassland Finance Limited</a> have given us a glimpse into what many of our other partners may experience in the coming weeks and months. Grassland shared with us that their staff is:
<ul>
 	<li>Practicing social distancing in the office. Staff continue to work in shifts and will do so until the situation improves.</li>
 	<li>Wearing protective masks and regularly monitoring for symptoms to ensure those coming into the office are healthy.</li>
 	<li>Avoiding in-person team activities and unnecessary travel.</li>
</ul>
For Grassland and other partners, the need to increase digital capacity to adapt to immediate challenges and to move into a new normal is a key theme. Seah Hooi Koon, Grassland’s COO, shared, “The disaster also showed again the importance of building up the digital capability of both our company and of our clients, and this will be key in our strategy going forward.”

Digital capability, adaptability, and a spirit of innovation will continue to guide companies forward as the situation evolves around the globe. At Accion, we will continue to stay in close contact with our partners to learn from them as they adapt and to provide resources to help them increase digital capabilities, keep staff safe, and continue to serve their clients.

Four examples show how businesses can stay safe and effective right now

As the global coronavirus pandemic threatens the livelihoods of millions around the world, our mission to give people the financial tools they need is more urgent than ever. The populations we serve are particularly vulnerable right now, without access to affordable healthcare, savings, or loans to stay solvent in a crisis. As the whole world faces this challenge, we have an opportunity to learn from each other and improve how we offer inclusive financial services to those who need them. We’re committed to sharing the knowledge we have to help our global community remain resilient.

While we aggregate and <a href="https://www.accion.org/responding-to-the-pandemic-guidance-for-financial-service-providers">share resources</a> across the globe, we’ve been working closely with two of our partners in China, <a href="http://grassfin.com/#/" target="_blank" rel="noopener noreferrer">Grassland Finance Limited</a> and <a href="https://www.cdfinance.com.cn/en/index" target="_blank" rel="noopener noreferrer">CD Finance</a>, and learning from their experience. Before the coronavirus pandemic spread across the globe, it hit China, devastating some areas and creating challenges for small businesses everywhere. After a two-month nationwide lockdown to contain the virus, businesses have reopened across China. Though China is very unique in many aspects, as other nations are facing this same contagion, we can learn from China’s experience.

We recently hosted a webinar for our partners with Ms. Hooi Koon Seah, COO of Grassland Finance Limited, and Mr. Dongwen Liu, CEO of CD Finance, and they shared their top lessons learned from navigating this crisis:
<h2>Protect the wellbeing of staff and clients</h2>
Above all else, prioritize the safety of employees and clients. By taking the virus seriously and taking immediate action, organizations can protect both their business and their clients. Institutions must comply with all official quarantine requirements and health protocols to protect employees and customers. Grassland and CD Finance adjusted their budgets as needed to increase the number of protective masks and cleaning supplies available to staff in regions that were hit harder by the virus. “Most of all, we want our staff to know that they belong and that the company holds their wellbeing as the highest priority,” said Ms. Seah.
<h2>Communication is critical</h2>
While in-person contact is restricted, maintaining a close connection with employees through other communication channels ensures that they feel secure and supported. Good communication channels should be in place for both employees and clients to stay connected while working remotely. In China, the top digital communication platforms were already widely adopted and became critical for both employees and clients to stay in touch. Our partners in China found that using these existing platforms helped them stay connected to clients. Mr. Liu notes, “It’s really important for our clients to recover their business in the coming days. What we can do is to have a close connection with them and ask what kind of support we can give to them and help them to recover their abilities gradually.”
<h2>Develop and execute emergency plans immediately</h2>
Companies need to identify possible worst-case situations and determine how they will respond. Now is the time for the financial services industry to take this crisis seriously and make every effort to support their staff and clients. The crisis moves fast, and its effects are far-reaching. By being prepared in advance and unafraid to act quickly and boldly, financial service providers can help their customers stay afloat through an unprecedented challenge.
<h2>Evaluate risk by sector and develop segment-specific response plans</h2>
Due to dramatically reduced cash flow during and after the lockdown, overdue loan payments increased greatly. Grassland learned in an impact assessment conducted with support from Accion that the crisis hit certain sectors harder than others and required a differentiated strategy for each. Depending on the sector and market, Grassland Finance prolonged the payment period, granted additional loans, or deferred loan repayments.

The agricultural sector faced unique challenges during the lockdown, which occurred during the planting season. Farmers faced challenges in securing the agricultural inputs they needed, like fertilizers. CD Finance was able to disburse $5 million USD in loans for farmers to buy fertilizers through a partnership with an agricultural inputs company.
<h2>Focus on building digital capacity</h2>
As this crisis unfolded, China had several factors working in its favor for business to continue. Digital payment and e-commerce platforms like WeChat Pay and Alipay are widely adopted, reducing the need for cash. With good infrastructure in place, including electricity, telecommunications networks, and internet access, many employees were already equipped to work remotely.

During the national lockdown, loan officers were unable to visit clients, and clients were unable to visit banks. Mobile communications and digital payment options were critical. Educating customers about digital payment platforms reduces dependence on cash. CD Finance relied on their existing digital platform to manage payments. Based on previous loan history and credit assessments, they were able to make quick determinations on whether or not to offer credit and loan extensions through this digital channel.

Every market will face unique difficulties and China has some aspects that enable it to act faster and more effectively than other countries. Yet, these insights can help as financial service providers guide their clients through this hard time. As we continue to face daunting challenges, know that there will be a time for recovery. “Although the disaster remains a serious challenge for both financial institutions and small businesses, we should stay remain optimistic. We believe that things are slowly getting better in China, and it will be in the rest of the world as well. This can be an opportunity where we show our worth and commitment to our mission,” says Ms. Seah. We know that Accion’s mission is more urgent than ever, and we will continue to share as many resources as we can to help underserved populations to endure the pandemic.

<a href="https://www.accion.org/responding-to-the-pandemic-guidance-for-financial-service-providers"><em>View</em><em> Accion's recommendations for financial service providers on protecting customers, employees, and business operations during the COVID-19 pandemic.</em></a>

&nbsp;

Five crucial insights from China for facing the pandemic

In the last decade, China has emerged as a leading market for digital financial services. The government has encouraged this growth by limiting regulation, and while innovation has flourished in this environment — so has malpractice. Millions of people have lost their life savings in the severely unregulated person-to-person (P2P) lending and digital lending industries. Now people find it hard to trust the digital financial tools that were supposed to improve their lives.

Liang Zhanli runs a small business in Inner Mongolia, selling local specialties like mushrooms and beef jerky. She knows first-hand the harm caused by irresponsible digital financial services. Several years ago, when she decided to try her hand at investing, Ms. Liang used her savings and even borrowed money from friends and family to make investments. She used a P2P platform, which takes capital from individual investors and lends it to another party. But when the P2P platform she used shut down, her investment failed. She had to sell her apartment to repay her friends and relatives.

This experience could have soured Ms. Liang on all financial service providers — leaving her without funds or the tools she needed to rebuild. Fortunately, even in her moment of hardship, Ms. Liang knew she could still trust Accion partner <a href="http://grassfin.com/en/home">Grassland Finance Limited (GFL)</a>. She had been working with the microcredit company for three years to support her business. Now, she plans to leverage capital from Grassland to invest in and grow her business to generate savings and buy a new apartment. From now on, she says she’ll only trust financial service providers that have a physical presence and staff she can meet in person.

Grassland Finance Limited is celebrating its 10<sup>th</sup> anniversary this month — a decade of supporting entrepreneurs like Ms. Liang with credit for <a href="https://www.accion.org/grassland-filling-gap-chinas-microcredit-industry">advancing their lives and businesses</a>. Unlike digital financial companies, microcredit companies are closely regulated – from interest rates to capital requirements to geographic expansion, but Grassland has managed to grow, even as competition increased. One key to Grassland’s success is the institution’s ability to <a href="https://www.accion.org/the-tech-touch-balance">balance human interaction and technology</a>.

Earlier this year, Accion worked with Grassland staff to interview customers to understand the needs, aspirations, and emotions of Grassland’s client base. Several customers told us that they didn’t want to rely on only digital finance products because they found them difficult and uncomfortable to use. However, once they understand how to use digital products, customers also told us that they like the convenience and ease these products offer with the onboarding and ongoing support from loan officers Grassland is moving towards digitization but will continue to offer a human touch to customers through loan officers and branches.

Grassland’s digitization efforts include designing and piloting a mobile app that allows clients to submit loan applications and sign contracts digitally and securely. Grassland is also working with Accion to build a credit model and automate the underwriting process. Throughout the credit process, loan officers serve as financial advisers to clients. They provide hands-on support, including teaching clients how to use digital channels for loan repayment and how to distinguish between reliable and dubious providers. One of the primary reasons that clients like Liang remain loyal to Grassland is out of trust for the institution’s loan officers, who are often seen as “old friends” they can turn to when they have finance-related questions or challenges.

Many clients are excited for the Grassland mobile application since they trust the institution and its staff. Take, for instance, Qin Xiaobo, who told us he is always cautious with digital finance. Nevertheless, he’s eager for Grassland to become more digitized because he feels it will continue to improve his experience.

Grassland is also moving towards digitizing customer education and support processes. For example, the organization has set up a corporate account with WeChat (similar to a corporate blog) and leverages the platform to publish financial education content regularly. Through insights collected from client interviews, Grassland recognizes that its clients lead busy and stressful lives, so it’s hard to make time to learn about financial management. To make learning more accessible, the institution is planning to leverage a <a href="https://walkthechat.com/wechat-mini-programs-simple-introduction/">WeChat mini program</a> to design interactive financial education activities, embedded in the WeChat corporate account. The game would encourage clients to learn and practice financial concepts in an engaging way and share their newfound expertise with their social networks. Grassland is also planning to partner with colleges to develop games and activities for clients’ kids so they can build financial literacy early. The institution intends to prototype these ideas soon.

It is increasingly evident that outside of major cities, digitization is unlikely to drive sustainable impact for low-income clients in China — unless it incorporates strategic human interactions. For a decade, Grassland has enabled people like Ms. Liang and Mr. Qin to seize business opportunities, increase income, endure economic shocks, and manage their households. While China’s digital financial services and microfinance industries remain <a href="https://www.accion.org/financing-chinas-smallest-businesses">fraught with challenges</a>, Grassland has proven that balancing tech with a human touch is good for business and good for customers.

<em>Arisha Salman and <a href="https://www.accion.org/bio/yiran-lu">Yiran Lu</a> also contributed to this article.</em>

Giving customers a reason to trust digital finance in China

<span style="font-weight: 400;">As I prepared for my first visit to China, I was curious about what I would discover and hoping that what I learned would help me in my work to build more inclusive financial systems in Africa. I would be joining a delegation of digital finance professionals in Africa, including Tunde Kehinde, co-founder of Accion Venture Lab portfolio company </span><a href="http://lidya.co/"><span style="font-weight: 400;">Lidya</span></a><span style="font-weight: 400;">. The trip was organized by the Mastercard Foundation</span><a href="https://www.financedigitalafrica.org/blog/2018/07/eight-things-we-learned-in-china-driving-fintech-fortune/"> <span style="font-weight: 400;">Partnership for Finance in a Digital Africa</span><span style="font-weight: 400;"> (FiDA)</span></a><span style="font-weight: 400;">  to learn about the ecosystem in China and bring insights and inspiration to our workplaces. </span>

<span style="font-weight: 400;">Tunde and I both live and work in Lagos, Nigeria, home to over 20 million people — one of the world’s megacities. We were fascinated to see how China has galvanized their government, businesses, and citizens to adopt financial products and services and how they’re creating a more seamless financial ecosystem for all. During the trip, we took note of everything we discovered and we’ve distilled our findings into lessons for inclusive finance in Nigeria. </span>
<h2><b>From big data to bigger data</b></h2>
<span style="font-weight: 400;">Tunde and I were both impressed by the tremendous amount of valuable data sources companies could tap into for lending decisions. As we met with business leaders from companies such as JD Finance, Ant Financial, and WeBank (the first Internet-only bank in China), we were surprised to learn that they leverage from 30,000  to 100,000 data points on consumers and merchants in their underwriting process. As a comparison, Lidya uses 100 data points, and that’s a pretty robust data set in a region where high-quality and consistent data can be hard to obtain. Despite their advances, one Ant Financial Executive we met claimed that they are “still in the small data age of big data”, and that in 50 years we will look back and laugh at the datasets we have at our disposal today. </span><b> </b>
<h2><b>Payments as the underbelly of a rich dataset</b></h2>
<span style="font-weight: 400;">During the trip, we saw how a strong payment infrastructure is crucial for collecting data to build successful customer profiles to lend to the underserved. China’s impressive data collection starts when customers make a payment. The QR code system has been widely adopted for transactions in China, making it extremely simple for consumers to scan and pay. The low cost of implementing QR code payment infrastructure at the merchant level has led to high adoption rates, rich data sets, and </span><a href="https://www.techinasia.com/fake-qr-code-scams-china"><span style="font-weight: 400;">minimal fraud</span></a><span style="font-weight: 400;">. In comparison, Nigeria has two primary approaches to payment facilitation: point-of-sale (POS) devices and USSD payments. Unfortunately, high costs, and inconsistent internet connectivity meant that POS devices are hard to come by or unreliable. </span>
<h2><b>Collaboration for advancement</b></h2>
<span style="font-weight: 400;">One thing that Tunde and I both found surprising was the </span><a href="https://www.financedigitalafrica.org/blog/2018/08/you-cant-clap-with-one-hand-how-collaboration-drives-chinas-fintech-success/"><span style="font-weight: 400;">high level of collaboration in the Chinese fintech sector</span></a><span style="font-weight: 400;">. We expected companies to be highly competitive, secretive, and unwilling to work together in their race to the top. Surprisingly, that couldn’t be further from the truth. Instead what we learned is that many share potential customer pipelines. These companies have started to specialize in finance offerings for clients at various income levels and businesses of different sizes, and they found that it was more productive to share a pipeline so each customer segment gets the most valuable experience from the optimal provider for them. </span>

<span style="font-weight: 400;">Tunde and I have both traveled a significant amount, but we both walked away transformed by our time in China. It was a thought-provoking trip — one that allowed us to see the tangible progress of a market that has made significant strides in fintech and financial inclusion. At one point I started to panic, wondering if any African nation, let alone the entire continent, could ever catch up. However, what I came to accept was that our collective goal is not necessarily to imitate China’s model but to forge our own path, centered on the needs of African consumers and small businesses. That path may look entirely different from China’s. There is no one solution for building a financially inclusive future, and each region and country will have their own challenges and successes along the way. While our visit to China inspired us, Tunde and I returned home most excited for what’s to come here in Nigeria.</span>

<em>This article was written with support from Tunde Kehinde, co-founder of Accion Venture Lab portfolio company Lidya. It is also published on the <span style="font-weight: 400;"><a href="https://www.financedigitalafrica.org/blog/2019/01/what-can-nigeria-learn-from-chinas-digital-economy-insights-on-big-data-mobile-payments-and-what-chinas-model-means-for-financial-inclusion-in-nigeria/">Partnership for Finance in a Digital Afric</a><a href="https://www.financedigitalafrica.org/blog/2019/01/what-can-nigeria-learn-from-chinas-digital-economy-insights-on-big-data-mobile-payments-and-what-chinas-model-means-for-financial-inclusion-in-nigeria/">a</a></span><span style="font-weight: 400;"><a href="https://www.financedigitalafrica.org/blog/2019/01/what-can-nigeria-learn-from-chinas-digital-economy-insights-on-big-data-mobile-payments-and-what-chinas-model-means-for-financial-inclusion-in-nigeria/"> (FiDA) blog</a>.</span></em>

What can Nigeria learn from China’s digital economy?

e.g. financial technology, credit, digital channels

Topics

e.g. South Asia, Nigeria, Mexico

Geography

e.g. reports, articles, case studies

Content Types

Browse by

Elizabeth Winters

monakapoor

<h3>Mona Kapoor, Senior Director, Digital Strategy and Transformation, Accion</h3>
<p><img class="alignright wp-image-23550" src="https://content.accion.org/wp-content/uploads/2021/03/mona-kapoor-accion-683x1024.jpg" alt="Mona Kapoor, Accion" width="450" height="675" srcset="https://content.accion.org/wp-content/uploads/2021/03/mona-kapoor-accion-683x1024.jpg 683w, https://content.accion.org/wp-content/uploads/2021/03/mona-kapoor-accion-200x300.jpg 200w, https://content.accion.org/wp-content/uploads/2021/03/mona-kapoor-accion-768x1152.jpg 768w" sizes="(max-width: 450px) 100vw, 450px" />When asked about the power of financial inclusion, Mona Kapoor says, “I believe that financial freedom comes from two aspects: the first is when you are really able to earn, and the second is when you really understand beyond just earning — it is about being able to invest, to transact, to understand.” While she believes that giving women digital financial tools can improve their lives, Mona wants digital products and services to go one step further and provide the education needed to make them more effective for women. As more and more women become breadwinners in their families, they need to be able to understand how financial products can meet their needs and help them reach new opportunities. “Women today are aspiring, they’re willing to commit, and to evolve,” she says.</p>
<p>Mona merges her deep experience in digital payments and transformation with her passion for microfinance — and the opportunities it can create for women — in her work at Accion. As <a href="https://www.accion.org/bio/mona-kapoor">Senior Director of Digital Strategy and Transformation</a> for Accion Global Advisory Solutions, she supports Accion partners as they develop digital financial products that help people to build better futures and small businesses to grow.</p>
<p>From her own personal experience, Mona knows that strong support systems can help women overcome challenges and thrive. “Women can really succeed when they get support from their mothers, sisters, daughters, the other women around them because that’s where they’re able to correlate and find strength. If she can do it, I can do it too. And let’s do it together. Women can and will find strength amongst women.” And with that support system, women can make an impact in whatever path they choose: “Women shouldn’t be held back in our ideation and thinking. Today’s world is such that if you can think it, you can do it. We should fearlessly go out there, express ourselves, make suggestions, and just jump into execution knowing and believing in ourselves, that we can do it.”</p>
<p>&nbsp;</p>


laurahemrika

<h3>Laura Hemrika, Global Head of Corporate Citizenship &amp; Foundations, Credit Suisse</h3>
<div id="attachment_23548" style="width: 510px" class="wp-caption alignright"><img aria-describedby="caption-attachment-23548" class="wp-image-23548" src="https://content.accion.org/wp-content/uploads/2021/03/laura-hemrika-credit-suisse.jpg" alt="Laura Hemrika" width="500" height="333" srcset="https://content.accion.org/wp-content/uploads/2021/03/laura-hemrika-credit-suisse.jpg 1200w, https://content.accion.org/wp-content/uploads/2021/03/laura-hemrika-credit-suisse-300x200.jpg 300w, https://content.accion.org/wp-content/uploads/2021/03/laura-hemrika-credit-suisse-768x512.jpg 768w, https://content.accion.org/wp-content/uploads/2021/03/laura-hemrika-credit-suisse-1024x683.jpg 1024w" sizes="(max-width: 500px) 100vw, 500px" /><p id="caption-attachment-23548" class="wp-caption-text"><em>Laura Hemrika poses with the teller team of the Opportunity bank at Mathambi Village, Malawi.</em></p></div>
<p>“From an early age, I felt a responsibility to have a career that had a positive impact on others, that enabled, at least, opportunity and agency for those who didn’t have it. But I also knew that whatever it was, it had to make business sense. Financial inclusion is all that – and more. The younger, quietly rebellious me secretly also loved the smart, disruptive character of microfinance in the early days. I was hooked, but my commitment to financial inclusion was really cemented by clients early on in my financial inclusion career at Accion.” Laura Hemrika’s early drive to make a difference in the lives of other people has carried on throughout her career. She now leads Credit Suisse’s global social commitments to financial inclusion, financial education, future skills, and disaster relief. <a href="https://www.accion.org/credit-suisse-and-accion-exploring-new-frontiers-in-financial-inclusion">Credit Suisse is a longtime partner of Accion</a>, and Laura’s team also leads Credit Suisse’s volunteer program where <a href="https://www.accion.org/partnering-for-a-better-view-of-accions-impact">Credit Suisse employees can volunteer with organizations like Accion</a>.</p>
<p>Laura believes that we must always focus first on the individual people that benefit from inclusive financial tools. “It is easy to lose sight of the fact that every transaction — every account — is a person, a life, a hope, a dream, but often, also a necessity. I remember meeting a female client who owned a small shop in the foothills of the Kilimanjaro and provided for her children and those of her brother who had died of AIDS several years before. Before starting her business, she had had to risk her life and her health to earn money for her family. Not out of ignorance — out of a lack of choice. Too often, millions of women and girls are still in situations or contexts where they are denied choice or opportunity. Access to well-designed financial services and financial education for them and their families can be such an important mechanism to overcome that. This is why Credit Suisse is committed to these two topics through our Financial Inclusion Initiative and our Financial Education for Girls Initiative.”</p>
<p>Laura is passionate about creating opportunities for other women, both through inclusive financial products and diversity in the workplace. “As women in leadership positions, we have a responsibility to continue creating opportunities for other women — whether our clients around the world or those in the organizations and sectors in which we work. Products and services, including technology, that specifically address the needs and interests of women are key, whether in crisis or not. Similarly, understanding the experience of women in companies and institutions is also key to ensure we develop and maintain a diverse employee base which in turn leads to better business decision-making.”</p>
<p>She encourages other women to be bold as they gain experience and grow in their careers. “To other women, I would say: dare to have an impact. Outside your comfort zone is where you will learn the most, so go for it. Strong professional skills are transferable, and our sector and our clients will only benefit from strong, talented female leaders.”</p>


Part of Accion’s annual series highlighting women working in financial inclusion

All around the world, basic financial services enable people to open their own businesses, educate their children, and provide for their families, but they aren’t within reach for everyone — including The COVID-19 pandemic has <a href="https://www.centerforfinancialinclusion.org/the-case-for-a-gender-intelligent-approach-an-opportunity-for-inclusive-fintechs">exacerbated inequalities that women face</a> and exposed how the <a href="https://www.womensworldbanking.org/insights-and-impact/womens-economic-empowerment-doorway-to-economic-recovery/">gender gap in financial inclusion</a> continues to hold women back.

This year, the <a href="https://www.unwomen.org/en/news/stories/2020/11/announcer-international-womens-day-2021">UN Women theme for International Women’s Day</a> is “Women in leadership: Achieving an equal future in a COVID-19 world.” We’re highlighting women leaders who are working to open opportunity for women and men through inclusive finance in our <a href="https://www.accion.org/series/women-of-accion">annual International Women’s Day blog series</a>. You can learn about more inspiring women in <a href="https://www.accion.org/women-leaders-open-opportunity-through-inclusive-finance-part-one">our first article</a> for this series.

Meet some of the women we’re inspired by:
<h3>Luz Borchardt, Co-founder of Henry</h3>
<img class="size-full wp-image-23551 alignright" src="https://content.accion.org/wp-content/uploads/2021/03/luz-borchardt-henry.jpg" alt="Luz Borchardt" width="450" height="510" />Luz Borchardt sees her work in Latin America’s education sector as a revolution. “The traditional education system is broken. At Henry, we are disrupting and kicking the paradigm of education as we know it. We challenge the status quo of education. We open opportunity by giving access to people who do not have the material resources, but do have the talent, by allowing them to defer the payment of the cost of their education until the person gets a job and becomes productive.” Luz and her co-founders started <a href="https://soyhenry.com/">Henry</a>, an Accion Venture Lab portfolio company, to make software development training more accessible to people in Latin America by embedding financial services into their education platform. Luz’s passion lies in <a href="https://www.accion.org/making-sure-fintech-is-an-equalizer-for-women-not-another-barrier">unlocking the talent of Latin American women</a> by bringing them into the booming tech industry. “Having more women in STEM would bring benefits for their professional development and economic autonomy, but also their communities and countries urgently require women’s contribution to find new solutions to the problems we face as a society,” she says. “Likewise, it is essential that every user finds their vision of the world represented at each table where a digital product is thought [of], designed, and developed. More women in technology is synonymous with a more egalitarian and inclusive society.”

Despite growing demand for technical skills, coding and software development are still not considered appealing careers for women in the region. “We have the great challenge of breaking down the stereotypes that we consume and creating a horizon of possibilities about what is expected of each gender to reduce the gap between men and women. These stereotypical representations operate from an early age and condition the future of many girls and women who do not believe they are ready to [become developers] in the tech sector.” When women in Latin America embrace tech as a career, more opportunities for jobs and financial stability open up to them. “When women become financially empowered, they invest most likely in education, food, and health, which has an impact on society in general and helps reduce social inequalities and boost economic growth.”

Luz is energized by the impact that she makes through Henry’s work. “I love it, it makes me feel well, we change the lives of a lot of people. And this fills us with pride and encourages us to continue working with great intensity, to be able to invest in more and more people.” She encourages more women to pursue entrepreneurship like she has. “I want to encourage every woman that wants to make an impact to act, to be the protagonist of this world that surrounds us. Entrepreneurship is a matter of attitude. If you find a problem you are passionate about, investigate it in-depth, prototype a solution, talk to many people to validate your idea, and execute it — and the show begins! The best way to start is to implement and navigate your idea. I deeply encourage women to start by doing, even if the idea or solution is not perfect.  I also encourage women to find their own voice in this conversation, too — whether that's in your home, in your workplace, or in your community. We need to expand women’s power and influence all over the world!”

Women leaders open opportunity through inclusive finance, part two

Robin Brazier

Women are bearing the brunt of the COVID-19 crisis, and financial service providers have a responsibility to act

Amee Parbhoo

henry

<h2>Embracing tech to pursue new job opportunities in Latin America</h2>
<p>In Latin America, a fintech startup called <a href="https://soyhenry.com/" target="_blank" rel="noopener noreferrer">Henry</a> is working to <a href="/a-fintech-cultivates-tech-talent-in-latin-america" target="_blank" rel="noopener noreferrer">expand access to software development education</a> so that more people can receive the training needed for jobs in tech, no matter their background, income, or experience. Henry, an Accion Venture Lab portfolio company, has <a href="/what-does-embedded-inclusive-fintech-look-like" target="_blank" rel="noopener noreferrer">embedded financial services into their education product</a> to make it accessible to more people. Students enroll in Henry’s online coding bootcamp program at no cost until they’ve completed the program and secured a job. Not only are they democratizing education in Latin America by opening opportunities to anyone regardless of their financial situation, but they are also working to bring more women onto their platform and into Latin America’s rapidly growing tech industry.</p>
<div id="attachment_23497" style="width: 352px" class="wp-caption alignright"><img aria-describedby="caption-attachment-23497" class="size-full wp-image-23497" src="https://content.accion.org/wp-content/uploads/2021/03/rocio-henry-client-testimonial.png" alt="Rocio, a Henry graduate" width="342" height="188" srcset="https://content.accion.org/wp-content/uploads/2021/03/rocio-henry-client-testimonial.png 342w, https://content.accion.org/wp-content/uploads/2021/03/rocio-henry-client-testimonial-300x165.png 300w" sizes="(max-width: 342px) 100vw, 342px" /><p id="caption-attachment-23497" class="wp-caption-text"><em>Henry spotlights women from their online community, like <a href="https://www.linkedin.com/feed/update/urn:li:activity:6729858752872288256/" target="_blank" rel="noopener noreferrer">Rocio on LinkedIn</a>, to inspire other women to explore careers in tech.</em></p></div>
<p>Co-founder Luz Borchardt’s ultimate goal is to include more women in tech by giving women a voice and fostering an inclusive community. There is a huge demand for tech skills in Latin America, and software development presents a great opportunity for people to build secure careers. By honing their technical skills through Henry’s platform, women gain the qualifications needed to join the tech workforce. But while the demand is growing, coding and software development are not viewed as appealing careers for women in the region. This social perception holds women back from considering tech as a stable way to earn a living.</p>
<p>Henry is working to overcome the belief that coding is a career for men through dedicated support and recruitment efforts tailored to women. They’re building a community that encourages women to pursue opportunities by facilitating meetups of women in tech, launching a dedicated blog with resources for women, representing women on their website, and featuring testimonials from female students on their social media pages. This community, called Henry Women, offers women support and empowerment to seize new opportunities they may have never considered before.</p>
<blockquote class="pullquote--right"><p>“The products of the future have to be built for everyone. Everyone has to be represented at the table and at the discussion when designing a product.”</p></blockquote>
<p>Luz and her team know that diversity is the way forward, and inclusivity is core to their work help everyone access the education needed to reach their potential. “The products of the future have to be built for everyone. Everyone has to be represented at the table and at the discussion when designing a product,” says Luz. As their students complete their curriculum, Henry helps them to find jobs in their new field. They are elevating the voices of their female students and advocating for tech companies to prioritize hiring women. Henry conducts diversity talks and with their tech company partners to stress how companies can perform better when they prioritize gender parity in the workplace and build diverse teams. Thirty percent of Henry’s own staff are women, and the majority of their instructors are women. So far, Henry has grown their percentage of female students from 20 to 25 percent — a significant number in Latin America, where only 10 percent of women college graduates were enrolled in engineering or technology courses in 2018, according to the company’s research.</p>


self

<h2>Community connections lead women to improve their financial health</h2>
<p>In the United States, millions of Americans struggle to make ends meet because of poor credit histories and overwhelming debt. Women in the U.S. often face additional barriers to economic security as they hold <a href="https://www.aauw.org/resources/research/deeper-in-debt/" target="_blank" rel="noopener noreferrer">two-thirds of all student loan debt</a> and continue to earn just <a href="https://www.cnbc.com/2020/09/18/new-census-data-reveals-no-progress-has-been-made-closing-the-gender-pay-gap.html" target="_blank" rel="noopener noreferrer">82 cents for every dollar</a> earned by men — and the numbers are even worse for women of color. Through a user-friendly digital platform, Accion Venture Lab investee <a href="https://www.self.inc/" target="_blank" rel="noopener noreferrer">Self Financial</a> gives Americans a <a href="/everyone-deserves-a-second-chance-to-build-credit-and-financial-security" target="_blank" rel="noopener noreferrer">pathway to build credit and savings</a>, so they’re better prepared to face life’s challenges and reach their dreams. Word of mouth has played a crucial role in Self’s growth as the majority of customers have found Self from friends, family members, and trusted communities. Self’s customer base has grown organically, and their customer base is comprised of 65 percent women, and over 60 percent people of color.</p>
<p>As more people have turned to the platform at the recommendation of others, Self sees the importance of trust and community for their customers. Self has used focus groups and psychographic research to develop educational content and messaging that resonates with their primarily female customer base, and they’ve shaped their customer experience to make users more comfortable as they begin their journey towards financial stability.</p>
<div id="attachment_23502" style="width: 310px" class="wp-caption alignright"><img aria-describedby="caption-attachment-23502" class="wp-image-23502" src="https://content.accion.org/wp-content/uploads/2021/03/jernessa-self-client-graduation-small-766x1024.jpg" alt="Jernessa and her son at her graduation" width="300" height="401" srcset="https://content.accion.org/wp-content/uploads/2021/03/jernessa-self-client-graduation-small-766x1024.jpg 766w, https://content.accion.org/wp-content/uploads/2021/03/jernessa-self-client-graduation-small-224x300.jpg 224w, https://content.accion.org/wp-content/uploads/2021/03/jernessa-self-client-graduation-small-768x1027.jpg 768w" sizes="(max-width: 300px) 100vw, 300px" /><p id="caption-attachment-23502" class="wp-caption-text"><em>Jernessa J. shares her story with other women whose poor credit history prevents them from reaching their dreams.</em></p></div>
<p><a href="https://www.self.inc/blog/jernessa-credit" target="_blank" rel="noopener noreferrer">Jernessa J. decided to take control of her future</a> after she found Self through an online community on Facebook. “Self was the first thing I used because it was the only thing that I could get approved for. Once I made several on-time payments, it better positioned me to get approved for lower limit credit cards. Self, coupled with proper management of those credit cards, were instrumental in my rebuilding of credit,” she says. After she transformed her financial situation, Jernessa became a financial coach to help other women access the tools and education to build their financial health. She shares her personal experience with Self to help others: “It is my ‘go-to’ resource to help get my clients on the right track the way that it helped me!” Now that Jernessa has improved her financial health, <a href="https://www.cnbc.com/2021/01/17/how-one-mother-is-building-generational-wealth-for-her-young-son.html" target="_blank" rel="noopener noreferrer">she’s working to build generational wealth for her son</a>, and has even launched a new online accessories business and earned another degree — all during the pandemic. When Jernessa and other influencers share their powerful stories, they encourage more women to control of their finances and build a better future.</p>
<p>By listening to their female customers and considering their unique needs and challenges from the beginning, companies like Self Financial and Henry are more effective in helping women embrace tech and digital financial tools. When inclusive fintechs and other social innovators recognize and address the difficulties that women around the world face through their product design, marketing, and customer support, the impact of their products can go much further. As we look toward rebuilding from COVID-19, we must ensure that women can find tools and resources they need to recover from this crisis and seize new opportunities.</p>


When fintech startups prioritize meeting the needs of their female customers through inclusive marketing, customer engagement, and community building, they open more opportunities for women

Digital financial services have changed the game when it comes to reaching low-income families, small businesses, and rural communities with the tools that can improve their lives. In particular, early-stage fintech startups have the <a href="/fintech-startups-are-small-yet-mighty-partners-in-building-resilience-but-they-need-to-grow-to-succeed" target="_blank" rel="noopener noreferrer">agility and innovation to leverage technology</a> to reach more people. The pandemic has underscored how fintech startups are positioned to help underserved people and businesses to build resilience, like <a href="/schools-go-virtual-with-fintech-support-in-indonesia" target="_blank" rel="noopener noreferrer">schools and students</a> in Indonesia who are adapting to remote learning, and <a href="/what-it-takes-for-one-family-business-to-stay-open" target="_blank" rel="noopener noreferrer">mom and pop shops</a> in Peru that need help stocking their shelves with food and essentials.

Innovative fintech products can even open opportunities for women, who have been <a href="https://www.centerforfinancialinclusion.org/building-resilience-how-to-ensure-women-are-not-left-behind-as-a-result-of-covid-19" target="_blank" rel="noopener noreferrer">disproportionately impacted by COVID-19</a>, to stay resilient — but they can also inadvertently increase gender gaps if they don’t address inequalities that women still face. In addition to being less likely than men to <a href="https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2018/04/GSMA_The_Mobile_Gender_Gap_Report_2018_32pp_WEBv7.pdf" target="_blank" rel="noopener noreferrer">own mobile devices</a> or have the <a href="https://data.worldbank.org/indicator/se.adt.litr.fe.zs" target="_blank" rel="noopener noreferrer">digital literacy needed</a> to use technology effectively, women also face cultural and societal barriers to embracing tech — for their careers, their businesses, and their financial health. When fintechs <a href="/want-to-fix-the-financial-inclusion-gender-gap-ask-better-questions" target="_blank" rel="noopener noreferrer">understand their female clients and find better ways to reach them</a>, they can create more inclusive and impactful products. Thoughtful customer engagement and marketing can cultivate trust and address societal barriers so that more women are empowered to adopt digital tools and seize new opportunities.

Making sure fintech is an equalizer for women — not another barrier

ashleylewis

<h3>Ashley Lewis, Senior Investment Officer, Africa, Accion Venture Lab</h3>
<p><img class="alignright wp-image-23482" src="https://content.accion.org/wp-content/uploads/2021/03/ashley-lewis-accion.jpg" alt="Ashley Lewis" width="350" height="525" srcset="https://content.accion.org/wp-content/uploads/2021/03/ashley-lewis-accion.jpg 800w, https://content.accion.org/wp-content/uploads/2021/03/ashley-lewis-accion-200x300.jpg 200w, https://content.accion.org/wp-content/uploads/2021/03/ashley-lewis-accion-768x1152.jpg 768w, https://content.accion.org/wp-content/uploads/2021/03/ashley-lewis-accion-683x1024.jpg 683w" sizes="(max-width: 350px) 100vw, 350px" />From her early start interning in a bank at the young age of sixteen, Ashley Lewis witnessed how financial services improve lives. She met families who walked into her bank looking for support while they struggled with their financial health. “I saw how personal and important it is to have access not only to financial services, but also to have a financially prosperous life.” Ashley has now lived on four different continents since her beginnings in California, widening her perspective on the challenges that hold people back — and the resilience that financial tools can provide. Today, she&#8217;s based in Nigeria, investing in and supporting inclusive fintech startups throughout Africa as a <a href="/bio/ashley-lewis" target="_blank" rel="noopener noreferrer">Senior Investment Officer</a> with Accion Venture Lab.</p>
<p>As Ashley has helped social ventures around the world reach more people, she’s seen how inclusive fintech can change the lives of women and their families. “Most of the time, women have the greatest ambitions for their families and for themselves. By creating inclusive financial services for women, I’ve seen them invest in their businesses, invest in their children, invest in their households, and prosper.” When women have the right financial tools to build businesses and improve their financial health, their success creates a ripple effect in their families and their communities.</p>
<p>Ashley looks ahead to a future where more women have opportunities to lead and thrive. “What I’m really excited about is seeing so many women globally being put into places of power and leadership. We’re now starting to see this tide turn where more women’s voices are at the table. When women have a voice, we can ensure that women don’t get left behind.” As more and more women step into leadership roles, Ashley believes they should lean into their unique capabilities and strengths. “As women, we have our own superpowers deeply embedded in us, whether that’s our intuition, our creativity, our collaboration. It’s important for women to identify those unique skill sets in themselves and bring that into the environments where they operate. Instead of trying to mirror what we see as successful leadership — often from a masculine perspective — we should dive into our unique abilities as women and bring that forward because that’s really what the world needs right now.”</p>


luzurrutia

<h3>Luz Urrutia, Chief Executive Officer, Accion Opportunity Fund</h3>
<p><img class="alignright wp-image-23481" src="https://content.accion.org/wp-content/uploads/2021/03/luz-urrutia.jpg" alt="Luz Urrutia" width="500" height="333" srcset="https://content.accion.org/wp-content/uploads/2021/03/luz-urrutia.jpg 1201w, https://content.accion.org/wp-content/uploads/2021/03/luz-urrutia-300x200.jpg 300w, https://content.accion.org/wp-content/uploads/2021/03/luz-urrutia-768x512.jpg 768w, https://content.accion.org/wp-content/uploads/2021/03/luz-urrutia-1024x683.jpg 1024w" sizes="(max-width: 500px) 100vw, 500px" />Luz Urrutia’s passion for inclusive finance comes directly from her own personal experience. “When I moved to the United States to finish my undergraduate degree, I worked at a bank. I applied for a $500 credit card from the very bank I worked at and was turned down because, as an immigrant, I had no credit history. I realized that if I was having this problem, as a bank employee, there was a wider problem. I decided that one day I would build a company that provides financial services to folks that don’t have access to them. Folks like me.”</p>
<p>Luz went on to found El Banco de Nuestra Comunidad, a community bank in Atlanta, Georgia, that focused on serving the Hispanic population with little or no credit history. She’s since become CEO of <a href="https://www.opportunityfund.org/" target="_blank" rel="noopener noreferrer">Accion Opportunity Fund</a>, Accion’s partner in the U.S., which provides loans to low and moderate-income immigrants, women, and other underserved small business owners.</p>
<p>While there’s still work to be done to make financial systems open to more people, Luz and her team at Accion Opportunity Fund are excited by the possibilities that tech opens up for connecting more women and people of color to the capital needed to grow their businesses. “Despite the advancements made to accelerate financial inclusion, women, and especially women of color, are still excluded from access to financial tools around the world. To bridge this gap, fintech has played a considerable role in opening opportunities for women globally, by providing digital solutions that cater to the constraints women face. Fintech provides women with the flexibility to access the resources they need, allowing them to conveniently gain access to resources to effectively run their businesses.”</p>
<p>That ability to run businesses effectively is crucial as entrepreneurship is a particularly powerful tool for women to build better futures. As Luz points out, “Of the <a href="https://www.cnn.com/2021/01/08/economy/women-job-losses-pandemic/index.html" target="_blank" rel="noopener noreferrer">140,000 jobs</a> lost in the U.S. last December, all of these jobs were held by women, and mostly women of color. In order to ensure women aren’t left further behind, we must focus on giving women the tools they need to start and run their own businesses. Entrepreneurship is a way for women to build wealth. Indeed, <a href="https://prosperitynow.org/issues/entrepreneurship" target="_blank" rel="noopener noreferrer">entrepreneurship is second only to homeownership</a> in building wealth. What’s more, <a href="https://www.wsj.com/articles/is-it-insane-to-start-a-business-during-coronavirus-millions-of-americans-dont-think-so-11601092841" target="_blank" rel="noopener noreferrer">Americans are starting businesses</a> at a faster rate now than in years, and women of color are <a href="https://www.fastcompany.com/90408156/women-of-color-are-starting-businesses-faster-than-anyone" target="_blank" rel="noopener noreferrer">starting businesses</a> faster than any other group. Thus, women need access to the capital and support needed to start and run their businesses, especially during this particularly challenging time.” This belief in entrepreneurship and inclusive finance is what drives Luz in her work every day as she opens up more opportunities for women to thrive.</p>


All around the world, financial services like bank accounts, insurance, and credit products, can enable people to open their own businesses, educate their children, and provide for their families. But these basic financial tools aren’t within reach for everyone, including <a href="https://globalfindex.worldbank.org/" target="_blank" rel="noopener noreferrer" data-stringify-link="https://globalfindex.worldbank.org/" data-sk="tooltip_parent">980 million women</a> who don’t have a bank account or even the ability to send and receive money on their phones. The COVID-19 pandemic has <a href="https://www.centerforfinancialinclusion.org/the-case-for-a-gender-intelligent-approach-an-opportunity-for-inclusive-fintechs" target="_blank" rel="noopener noreferrer" data-stringify-link="https://www.centerforfinancialinclusion.org/the-case-for-a-gender-intelligent-approach-an-opportunity-for-inclusive-fintechs" data-sk="tooltip_parent">exacerbated inequalities that women face</a> and exposed how the <a href="https://www.womensworldbanking.org/insights-and-impact/womens-economic-empowerment-doorway-to-economic-recovery/" target="_blank" rel="noopener noreferrer" data-stringify-link="https://www.womensworldbanking.org/insights-and-impact/womens-economic-empowerment-doorway-to-economic-recovery/" data-sk="tooltip_parent">gender gap in financial inclusion</a> continues to hold women back.

This year, the <a href="https://www.unwomen.org/en/news/stories/2020/11/announcer-international-womens-day-2021" target="_blank" rel="noopener noreferrer" data-stringify-link="https://www.unwomen.org/en/news/stories/2020/11/announcer-international-womens-day-2021" data-sk="tooltip_parent">UN Women theme for International Women’s Day</a> is “Women in leadership: Achieving an equal future in a COVID-19 world.” We’re <a href="https://www.accion.org/series/women-of-accion" target="_blank" rel="noopener noreferrer" data-stringify-link="https://www.accion.org/series/women-of-accion" data-sk="tooltip_parent">highlighting women leaders</a> who are working to open opportunity for women and men through inclusive finance, and to rebuild a more equitable world for all.

Meet some of the women we’re inspired by:<span dir="ltr" data-sk="tooltip_parent"> </span>
<h3>Maria Otero, Former Under Secretary of State for Civilian Security, Democracy, and Human Rights, and Former President and CEO of Accion</h3>
<img class="wp-image-23480 alignright" src="https://content.accion.org/wp-content/uploads/2021/03/maria-otero.jpg" alt="Maria Otero" width="450" height="300" />

“I believe that all women are leaders and that all women can make an impact. And that impact operates not just at their family level, but at their community level, and in some cases, as their national level and internationally.” Maria Otero is adamant in her belief that all women can make a difference, and her own career has been a testament to what a determined and passionate woman can accomplish. Born in La Paz, Bolivia, Maria started her career working in women’s health. As she traveled around the world, she saw how women were held back by a lack of economic empowerment, and she pivoted towards a career in financial inclusion. “I learned a great deal about the women’s movement, about how it is that women were addressed throughout the world, the inequities that existed overall, the inability for women to be treated as citizens like men.”

When she later became President and CEO of Accion, she shifted the focus from microcredit to microfinance to financial inclusion and oversaw the creation of the Center for Financial Inclusion. During her time at Accion, Maria witnessed the remarkable difference that financial services can make in the lives of women: “Financial tools have been the gate through which women have been able to work, to expand their own opportunities, and to become more self-sufficient. There’s just absolutely no question that financial inclusion is one way to truly integrate women into society. It is also one way to help [women] educate their children so that they can grow into a different generation – especially their daughters. You can see this wherever you go.”

Maria believes that women have all around the world tenacity and determination to succeed. “I learned so much about being a confident and fearless woman from my mother who at 94 is still going strong,” she says. With the right tools, women open businesses, provide for their families, and build better futures. “It doesn’t matter if you’re talking about Brooklyn, New York, or Bangkok, Thailand, across the world you see that being able to believe in women and trust in women and give them opportunity allows them to demonstrate that they can pay all their loans back, they can manage their resources, and they can also take on other financial products.”

She brought her passion for social change and her global perspective into her work at the US State Department as Under Secretary for Civilian Security, Democracy, and Human Rights. In this role and her many other leadership positions, she’s fought to build an equitable world that creates opportunities for all people, including women.

Maria encourages younger generations to understand the work that has come before them as they continue striving towards gender equality. As digital tools and social media continue to change how we influence thinking, “it is really important to understand that even though we have different means of communicating [across different generations], we are building on the shoulders of much that came before us.”

Women leaders open opportunity through inclusive finance, part one

Digital solution Tienda Pago provides working capital for Cecilia and other small merchants in Latin America 

Michael Schlein

Financial service providers must stay focused on customers as they quickly embrace digital tools.

The pandemic has severely affected the world’s low-income populations. But by accelerating the pace of digitization, it has opened doors to financial services and the security and opportunities they provide. Digital financial services—and the tools needed to use them—are now vital for low-income families and small businesses to make it through this crisis and build resilience to future challenges.

Digitization is integrating financial services into nearly every aspect of life. <a href="https://www.accion.org/what-does-embedded-inclusive-fintech-look-like">Financial services can be embedded</a> into anything from utility payments to crop fertilizer subscriptions, which can help more people access credit, save money, and build credit histories that are essential for growth.

But digitization also risks worsening inequality, invading clients’ privacy, and taking advantage of people with less digital experience or poor access to the right tools, like mobile phones. Underserved people need new skills and expertise to successfully navigate the digital economy, and they need products that protect their privacy and personal information.

Accion has been working to ensure that innovations driving digital transformation and migration are inclusive, safe, and effective. Based on our experiences, here are three ways to ensure customers aren’t left behind amid accelerating digitization.
<h2>1. Expand digital access, fluency, and trust</h2>
Building customers’ trust in digital financial services, as well as their digital fluency, will be foundational an effective customer experience. It matters less where clients live, while it’s more important that providers can reach and stay in contact with them. Financial services providers need to rethink the purposes of physical interactions versus digital interactions so that the former occur less often and the latter become more frequent and more personal.

EdTech (education technology) can help underserved clients gain digital familiarity and learn how to accomplish a range of tasks, like setting up an online wallet or listing a product for sale. Accion has <a href="https://www.accion.org/how-the-pandemic-is-spurring-microentrepreneurs-to-go-digital">developed and deployed an interactive EdTech platform</a> called Ovante to help underserved entrepreneurs gain the management, financial, and digital expertise they need to succeed in our increasingly digital world. Ovante can help clients expand on their existing knowledge of social media to open new digital channels to selling their products and services.

Digital channels are a key conduit for financial service providers to improve their customer experience, and sometimes this means totally rethinking the customer experience. For example, many of Accion’s partners use group lending models to serve clients without any credit history by allowing people in the same communities to guarantee each other. Eighty percent of group lending participants are women, and 65 percent live in rural areas with few or no banks. Group lending has historically relied on frequent in-person interactions. But as social distancing became a necessity, our partners leveraged digital platforms to <a href="https://www.accion.org/can-group-lending-work-in-a-socially-distant-world">reimagine the group lending process</a> for the digital age.
<h2>2. Answer clients’ needs</h2>
As lockdowns end, low-income families will find their savings exhausted, their businesses stalled or bankrupt, and their future incomes uncertain. People will need new income streams and financial services to build resilience, restart their businesses, and establish new ventures.

Digitization means that more clients will use digital tools to rebuild their livelihoods, but providers must answer their needs by <a href="https://www.accion.org/to-succeed-innovative-financial-products-must-be-desirable-feasible-and-viable">crafting truly meaningful, customer-centric value propositions</a> that help them build resilience today and for the future.

To do that successfully during the pandemic, Accion has helped providers conduct interviews and surveys remotely to ensure that they capture the insights they need. Using client insights, we help institutions develop products and services that are desirable to clients and solve their specific problems. These offerings must also be feasible for the institution, given their capacity and operating models, and viable for the long term. Here, digital channels and platforms make a huge difference, and adopting them has become an urgent priority.

It’s so important to help people build financial resilience, and the customer experience needs to reflect that. If vulnerable clients’ unique needs aren’t sought out, understood, and addressed, their entire livelihoods could collapse and the economic recovery will be more difficult. Financial service providers must <a href="https://www.accion.org/win-from-within-how-fintech-startups-can-grow-by-building-value-for-existing-users">grow along with their clients</a> by understanding their needs, crafting products that meet those needs, and keeping them engaged throughout their journey as customers.
<h2>3. Ensure clients’ data and privacy stay protected</h2>
Digitized data can unlock more personalized and effective financial products that can help low-income people improve their lives and achieve their goals. Yet many emerging markets have weak effective consumer data protection regimes. When rules do exist, people with low levels of digital and financial sophistication may, in their eagerness to receive financial services, sign away their rights without even fully understanding them.

Protecting the privacy and security of customer data includes cultural and technical aspects, and vulnerabilities often lie at the intersection of the two. A provider can install best-in-class privacy and security software, but they must also build in privacy through a culture of protecting customer data. For example, providers can ‘right size’ their data collection methods to focus only on what is needed, implement strong and ethical data governance policies, and have dedicated staff responsible for their consistent application and use.

Accion is also focused on increasing transparency in providers’ data practices. We are analyzing how financial service providers use algorithms, which can be biased against underserved populations, in automated decision-making. We are monitoring emerging frameworks around the world to see what does and doesn’t work to advance financial inclusion while safeguarding data privacy, portability, and other consumer rights.

Cyber threats have also become a growing concern in emerging markets. Digital innovations, new products, and new processes are moving ahead at breakneck speed, but they’re leaving cyber security considerations in the dust, bringing new risks to financial inclusion-focused providers and to low-income and newly-banked customers. This makes it harder for people to trust digital financial services. We are working with our partners to <a href="https://www.accion.org/reimagining-cyber-risk-for-financial-inclusion-in-an-increasingly-digital-world">put in place cyber risk mitigation strategies</a> to ensure that the most underserved are protected.

Accion is engaging the industry to ensure that innovation doesn’t simply expand access to financial services—but also creates financial services that are safe, high quality, and designed to meet customers’ needs. These efforts are essential to ensure that the world’s three billion financially underserved people can build resilience to today’s challenges and threats arising in the future.

Three ways to ensure people aren’t left behind in the rush to go digital

Tracking the data collected through Accion’s hundreds of partners around the world can seem daunting and complicated. But making sense of this data is key to understanding how our work is making a difference for vulnerable populations, especially as they confront the challenges of COVID-19.

In 2020, Accion welcomed Credit Suisse’s Saad Khalid for six months as a volunteer to help Accion improve data collection and tracking efforts. An analyst in Credit Suisse’s compliance division, Saad leveraged his expertise to help a team of Accionistas build a data system to improve our monitoring and evaluation processes. Ultimately, they sought to enhance Accion’s ability to tell the story of our impact.

Saad’s experience at Credit Suisse in data analysis, data consolidation, rapid prototyping, and stakeholder management made him a valuable addition. His help centralizing Accion’s data opened doors for us to learn and grow. Saad said he hoped to leave us with a working solution, not mere recommendations, and indeed he has.
<h2><strong>Building on a longstanding partnership</strong></h2>
Credit Suisse employees like Saad can engage with Accion through the bank’s Global Citizens Program and Virtual Volunteering Program, whereby Credit Suisse employees can join Accion teams and apply their skillsets towards projects that build organizational capacity and help us better serve low-income families and small businesses across the globe.

<a href="https://www.accion.org/credit-suisse-and-accion-exploring-new-frontiers-in-financial-inclusion" target="_blank" rel="noopener noreferrer">For more than a decade, Accion and Credit Suisse have partnered to build a financially inclusive world.</a> Credit Suisse was integral to the 2008 launch of the Center for Financial Inclusion at Accion, which uses rigorous research and advocacy to advance inclusive financial systems for low-income people around the world. Credit Suisse was also a key supporter of the 2012 launch of Accion Venture Lab and supports its continued efforts to expand access to financial services through investing in and growing seed-stage fintech startups.
<h2><strong>Adding a new and valuable perspective</strong></h2>
Saad shared that his experience growing up in Pakistan and later in the UK helped draw him to work with Accion. He saw firsthand the life-changing effect that access to financial tools can have on improving the livelihoods of families and their communities. Saad also has a long history of working in the social impact sector.

In his spare time, Saad serves on the founding teams of two mission-driven startups. One startup offers digital recruitment solutions in Pakistan, and the other is a gig economy platform that democratizes access to employment via data labeling for machine learning.

Both Saad and the Accion team gained valuable lessons through his participation in the Credit Suisse Global Citizens Program. Saad gained a better understanding of data’s role in Accion’s work and also came to value Accion’s “capital plus” model, in which investors broaden their involvement with partners to include mentorship, technical assistance, governance, and more.

Saad’s invaluable additions strike at the essence of Accion’s partnership with Credit Suisse. As the broader industry continues to deepen transparency and data-informed approaches, we are excited to continue to build on his contributions to our work.

Partnering for a better view of Accion’s impact

English

<p><span data-contrast="auto">Global </span><span data-contrast="auto">nonprofit </span><span data-contrast="auto">Accion</span><span data-contrast="auto"> </span><span data-contrast="auto">issued the following statement</span><span data-contrast="auto">s</span><span data-contrast="auto"> today on the</span><span data-contrast="auto"> passing of </span><span data-contrast="auto">our friend and colleague </span><span data-contrast="auto">Kurt </span><span data-contrast="auto">Koenigsfest</span><span data-contrast="auto">.</span><span data-contrast="auto"> </span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p>
<p><span data-contrast="auto">A close</span><span data-contrast="auto"> personal and professional</span><span data-contrast="auto"> friend to man</span><span data-contrast="auto">y of </span><span data-contrast="auto">Accion’s</span><span data-contrast="auto"> team members, Kurt filled many roles in his life </span><span data-contrast="auto">as a father and family member, friend</span><span data-contrast="auto">, community leader, and financial inclusion pioneer. </span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p>
<p><span data-contrast="auto">A</span><span data-contrast="auto">t the time of his passing, </span><span data-contrast="auto">Kurt </span><span data-contrast="auto">served as </span><span data-contrast="auto">CEO of </span><span data-contrast="auto">BancoSol</span><span data-contrast="auto">, Bolivia’s largest microcredit bank</span><span data-contrast="auto"> and longtime partner of </span><span data-contrast="auto">Accion</span><span data-contrast="auto">.</span><span data-contrast="auto"> </span><span data-contrast="auto">A champion for financial inclusion, </span><span data-contrast="auto">Kurt led </span><span data-contrast="auto">BancoSol</span><span data-contrast="auto"> since 2000</span><span data-contrast="auto">. Under his leadership, </span><span data-contrast="auto">BancoSol</span><span data-contrast="auto"> </span><span data-contrast="auto">has provided more than 1.5 million low-income consumers and small businesses </span><span data-contrast="auto">with</span><span data-contrast="auto"> the high-quality financial services they need to grow and thrive. Throughout the COVID-19 pandemic, Kurt oversaw the rollout of digital financial products that allowed </span><span data-contrast="auto">customers</span><span data-contrast="auto"> to</span><span data-contrast="auto"> continue to access essential </span><span data-contrast="auto">financial services during lockdowns</span><span data-contrast="auto">.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p>
<p><span data-contrast="auto">Michael </span><span data-contrast="auto">Schlein</span><span data-contrast="auto">, </span><span data-contrast="auto">President and </span><span data-contrast="auto">CEO of </span><span data-contrast="auto">Accion</span><span data-contrast="auto">, said, </span><span data-contrast="auto">“</span><span data-contrast="auto">Kurt’s passing is a devastating loss</span><span data-contrast="auto">, and o</span><span data-contrast="auto">ur thoughts today are with </span><span data-contrast="auto">his</span><span data-contrast="auto"> family and loved ones. </span><span data-contrast="auto">Kurt</span><span data-contrast="auto"> was not only a leader, friend, and collaborator respected by many—his work pioneered the commercial model of microfinance that today is used across the world to help</span><span data-contrast="auto"> millions of</span><span data-contrast="auto"> low-income people access the basic financial tools they need to build better lives. He helped grow and transform </span><span data-contrast="auto">BancoSol</span><span data-contrast="auto"> into a leading </span><span data-contrast="auto">institution</span><span data-contrast="auto"> helping more than a million low-income Bolivians recover from the severe effects of the pandemic. His</span><span data-contrast="auto"> professional</span><span data-contrast="auto"> legacy lives on in the families, small businesses, and communities he helped support, and it will continue to inspire our work.”</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p>
<p><span data-contrast="auto">Esteban </span><span data-contrast="auto">Altschul</span><span data-contrast="auto">, COO of </span><span data-contrast="auto">Accion</span><span data-contrast="auto"> and chairman of </span><span data-contrast="auto">BancoSol’s</span><span data-contrast="auto"> Board of Directors, said, </span><span data-contrast="auto">“</span><span data-contrast="auto">Our hearts go out to Kurt’s family, friends, and colleagues as they cope with this profound loss.</span><span data-contrast="auto"> </span><span data-contrast="auto">I </span><span data-contrast="auto">have </span><span data-contrast="auto">had the privilege to work closely with Kurt over the last decade, and he became one of my closest friends. His courageous </span><span data-contrast="auto">efforts</span><span data-contrast="auto"> and dedication in the field of microfinance </span><span data-contrast="auto">have </span><span data-contrast="auto">made a measurable impact </span><span data-contrast="auto">on the lives of Bolivians and underserved people around the world</span><span data-contrast="auto">. The global</span><span data-contrast="auto"> financial inclusion</span><span data-contrast="auto"> community has lost one of its most inspiring leaders much too soon.”</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p>
<p><span data-contrast="auto">Accion</span><span data-contrast="auto"> first backed </span><span data-contrast="auto">BancoSol</span><span data-contrast="auto"> in the 1980s as a charity, </span><span data-contrast="auto">then</span><span data-contrast="auto"> supported its transition to a commercial bank dedicated solely to microfinance in 1992</span><span data-contrast="auto"> as a significant minority shareholder and partner</span><span data-contrast="auto">.</span><span data-contrast="auto"> Since then,</span><span data-contrast="auto"> </span><span data-contrast="auto">Accion</span><span data-contrast="auto"> has continued to </span><span data-contrast="auto">partner</span><span data-contrast="auto"> with </span><span data-contrast="auto">BancoSol</span><span data-contrast="auto"> </span><span data-contrast="auto">in the development and rollout of digital financial services</span><span data-contrast="auto"> for Bolivia’s underserved populations</span><span data-contrast="auto">.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p>


Español

<h2>Accion emite una declaración sobre el fallecimiento de Kurt Koenigsfest</h2>
<p>Accion, una organización mundial sin fines de lucro, emitió las siguientes declaraciones el día de hoy sobre el fallecimiento de nuestro amigo y colega Kurt Koenigsfest.</p>
<p>Se trata de un amigo personal y profesional, cercano a muchos de los miembros del equipo de Accion: Kurt desempeñó muchos papeles en su vida como padre y familiar, amigo, líder comunitario y pionero de la inclusión financiera.</p>
<p>Al momento de su fallecimiento, Kurt ejercía como presidente ejecutivo de BancoSol, el banco de microcréditos más grande de Bolivia, socio de Accion desde hace mucho tiempo. Kurt, un defensor de la inclusión financiera, dirigió BancoSol desde el año 2000. Bajo su liderazgo, BancoSol ha proporcionado a más de 1 millones de consumidores de bajos ingresos y pequeñas empresas, los servicios financieros de alta calidad que necesitan para crecer y prosperar. A lo largo de la pandemia de COVID-19, Kurt supervisó el despliegue de productos financieros digitales que permitieron a los clientes seguir accediendo a servicios financieros esenciales durante los confinamientos.</p>
<p>Michael Schlein, presidente y CEO de Accion, comentó: &#8220;El fallecimiento de Kurt es una pérdida devastadora, y nuestros pensamientos hoy están con su familia y sus seres queridos. Kurt no sólo fue un líder, amigo y colaborador respetado por muchos: su trabajo fue pionero en el modelo comercial de microfinanzas que hoy se utiliza en todo el mundo para ayudar a millones de personas de bajos ingresos a acceder a las herramientas financieras básicas que necesitan para mejorar sus vidas. Ayudó a crecer y transformar a BancoSol en una institución líder que ayudó a más de un millón de bolivianos de bajos ingresos a recuperarse de los graves efectos de la pandemia. Su legado profesional sigue vivo en las familias, las pequeñas empresas y las comunidades a las que ayudó con su apoyo, y continuará inspirando nuestro trabajo&#8221;.</p>
<p>Esteban Altschul, COO de Accion y presidente de la Junta Directiva de BancoSol, dijo: &#8220;Nuestros corazones están con la familia, los amigos y colegas de Kurt cuando se enfrentan a esta irreparable pérdida. He tenido el privilegio de trabajar en estrecha colaboración con Kurt durante la última década, hasta convirtirse en uno de mis amigos más cercanos. Sus denodados esfuerzos y su dedicación al campo de las microfinanzas, han tenido un impacto medible en la vida de bolivianos y personas mal atendidas de todo el mundo. La comunidad mundial de la inclusión financiera ha perdido demasiado pronto a uno de sus líderes más inspiradores&#8221;.</p>
<p>Accion respaldó por primera vez a BancoSol en la década de 1980, cuando era aún una organización benéfica; luego apoyó su transición a banco comercial dedicado exclusivamente a las microfinanzas en 1992, como accionista minoritario y aliado. Desde entonces, Accion ha seguido colaborando con BancoSol en el desarrollo y despliegue de servicios financieros digitales para las poblaciones desatendidas de Bolivia.</p>


Announcement

Accion issues statements on the passing of Kurt Koenigsfest

Esteban Altschul

After many months of difficult lessons and adaptations during the pandemic, three of our microfinance partners look ahead to the next chapter

Debdoot Banerjee

Small business owners in India reopen their businesses and rediscover hope for the future with customer-focused loan products and support from Annapurna Finance Ltd.

Twenty-six-year-old Rosina Das runs a small grocery shop in her village near Balakati, Odisha, in eastern India. She and her husband own a small lot of land, but their crops don’t bring in enough money for them to provide for their two children and meet their household needs. Because her family hasn’t been able to afford to install pump irrigation, they must rely on rain for their crops and can only grow during India’s <em>kharif</em>, or monsoon, season. Rosina needed another way to support her family, so she converted a small room in her house into a grocery store and became a small business owner.

When Rosina first started her business, she used her savings to buy grocery items to sell in her shop. Her business quickly took off since there weren’t many other stores in her village. Once Rosina opened her doors, she gave families in her community the ability to purchase fresh food and other essentials that weren’t able to buy before. Rosina availed of her first loan with <a href="https://annapurnafinance.in/" target="_blank" rel="noopener noreferrer">Annapurna Finance Ltd.</a>, a microfinance institution and Accion partner in India, two years ago as a group lending client to grow her small business even further. As her household income increased, her family was able to break their pattern of dependence on seasonal agriculture.

Like millions of other micro, small, and medium enterprises (MSMEs) operating in India, Rosina’s business has struggled greatly during the coronavirus pandemic. Not only did her sales plummet, but she also had a hard time getting new inventory to sell in her store as her suppliers were limited by transport restrictions during India’s strict lockdown. Without her regular customer volume or sufficient stock to sell, Rosina suddenly found herself without a stable income and unable to repay her small business loan installments. She learned about India’s loan moratorium from the other borrowers in her lending group and worked with Annapurna to reschedule her repayment dates and extend her loan tenure for two more months — a huge relief for her stalled business and her family.

[caption id="attachment_23303" align="alignright" width="393"]<img class="wp-image-23303" src="https://content.accion.org/wp-content/uploads/2021/02/papina-das-annapurna-finance-214x300.jpg" alt="Papina Das, an entrepreneur in eastern India" width="393" height="550" /> <em>Papina Das owns a small dairy business near Balakati in eastern India.</em>[/caption]

Rosina also learned about Annapurna’s midterm loan offering, a type of emergency loan that could help her restart her business. She received an emergency loan of 15,000 INR (205 USD) within seven days of application and purchased what she needed for her store. As demand has rebounded in her village, Rosina has provided the groceries that her community needs. Just a few months ago, she lost hope and couldn’t imagine her livelihood returning to normal. Now she is grateful to Annapurna for providing the support she needed to reopen her business.

Papina Das, 34, lives in the same village as Rosina, where she runs a small dairy business selling milk in her community and to nearby villages. She employs one other person from the village to help her feed and milk her cows. She started her business two years ago with a group loan from Annapurna. The other members of her lending group are also self-employed and own dairy businesses. Before COVID-19, Papina made a profit of more than 10,000 INR (137 USD) per month from her milk sales.

Papina’s sales dropped dramatically when the pandemic started. Residents of her village and the surrounding villages suffered greatly from the lockdown’s financial impact and many people lost their livelihoods. Even Papina’s regular customers stopped buying their usual volume of milk. Although milk is an essential commodity, her profits plummeted as economic instability decreased demand and people feared infection at markets.

Within one month of lockdown, Papina’s profits were cut in half. She was forced to lay off her employee and unable to pay her loan installments on time. After an Annapurna employee <a href="/how-three-financial-service-leaders-are-adapting-to-covid-19#annapurna" target="_blank" rel="noopener noreferrer">proactively contacted her by phone</a> and informed her about the loan moratorium during the lockdown, Papina opted to take a three-month moratorium on her payments. Like Rosina, Papina decided to take advantage of Annapurna’s midterm loan. Within three days of applying, she received a 20,000 INR (274 USD) loan. With this assistance from Annapurna, she’s rehired her assistant and restarted her dairy business. She’s also purchased another cow to speed up her business’s recovery, and her milk sales have nearly recovered to pre-pandemic levels.

A flexible loan can be the reason that a grocery store stays open in a village with few options for fresh food, or a dairy business continues providing milk to families in a rural community. Through <a href="/mastercard-and-accions-partnership-to-unlock-millions-of-underserved-microbusinesses" target="_blank" rel="noopener noreferrer">Mastercard and Accion’s partnership</a>, Accion is working with Annapurna Finance to develop a new digital emergency loan product for group lending customers like Rosina and Papina. To build products that help entrepreneurs stay in business, we surveyed Annapurna’s small business clients to understand <a href="/critical-lessons-from-a-survey-of-small-businesses-in-india" target="_blank" rel="noopener noreferrer">their experience and confidence using digital tools, how gender gaps affect digital access, the role of misinformation, and more</a>. When financial services providers like Annapurna consider the unique challenges that their clients face, they can play a critical role in helping India’s <a href="/digital-tools-open-opportunities-for-women-to-thrive" target="_blank" rel="noopener noreferrer">women entrepreneurs use well-designed digital tools</a> to overcome the pandemic’s challenges and help rebuild their local economies.

Women entrepreneurs get back to business in India

Latest insights

The pandemic has taken a devastating toll on the world’s working poor. Typically they rely on daily cash transactions to earn money and buy food for their families. They lack a safe place to save money, or the means protect themselves from financial ruin brought by a sudden illness or natural disaster. The pandemic has spurred real fears of starvation that precede fears of sickness.

Accion’s mission is to change this reality by building a financially inclusive world. We are doing that by supporting and investing in financial service providers who are reaching underserved populations around the world.

The crisis has shone a spotlight on the importance of our work in building resilient communities. For example, Dr. David Akinpelu in Lagos, Nigeria, relied on <a href="https://www.accion.org/one-doctors-story-facing-a-health-and-economic-crisis-head-on-in-nigeria">financing from our partner Accion Microfinance Bank</a> to buy the medical equipment he needed to grow his private community hospital. The hospital is now providing care to patients with little ability to pay and educating people on preventing the spread of COVID-19.

If we do nothing, the financial engine supporting people like Dr. Akinpelu could <a href="https://www.accion.org/the-financial-engine-for-half-the-worlds-jobs-is-about-to-seize-up">seize up</a>. Meanwhile, three billion people still lack the tools they need to save, build a business, or purchase insurance to guard against emergencies. Without support for the financial service providers reaching out to these populations, existing disparities will only widen, and creating pathways out of poverty will grow more difficult.
<h2>Inclusive finance is key to recovery and resilience</h2>
The communities we serve certainly aren’t strangers to disruptive shocks, and our partners have shown a remarkable ability to meet their needs in challenging times. Following the devastating 2010 earthquake in Haiti, the poorest country in the Western Hemisphere, Accion’s partner <a href="https://www.sogebank.com/" target="_blank" rel="noopener noreferrer">Sogesol</a> helped <a href="https://www.accion.org/helping-small-businesses-farmers-resilient-haiti">more than 8,000 Haitians restore their homes and small businesses</a> through microcredit and distributed emergency grants to 2,000 of its most vulnerable clients.

In Uganda, which hosts almost <a href="https://data2.unhcr.org/en/country/uga" target="_blank" rel="noopener noreferrer">1.4 million refugees</a>, Accion partner <a href="https://www.ugafode.co.ug/" target="_blank" rel="noopener noreferrer">UGAFODE Microfinance Limited </a> launched a digital program in 2019 to serve people fleeing conflict or hardship. UGAFODE is also <a href="https://www.accion.org/its-a-group-effort-to-help-refugees-build-new-lives-in-uganda" target="_blank" rel="noopener noreferrer">the first financial institution in Uganda to open a branch inside a refugee settlement</a>.

Today, our partners are rapidly adapting to meet new needs arising from the pandemic. In India, <a href="https://www.accion.org/a-start-up-innovates-to-give-the-uninsured-a-safety-net">Toffee Insurance is introducing new products</a> to help underinsured people build financial resilience to the impact of COVID-19 and challenges that may arise in the future. <a href="https://toffeeinsurance.com/">Toffee</a> has successfully reached India’s uninsured by offering specific, simple policies covering risks that are most relevant to consumers, like dengue, malaria, bicycle damage, and theft.
<h2>What Accion is doing now</h2>
Accion’s work to build inclusive, resilient communities through access to quality financial services, including credit, savings, and insurance, is more critical than ever.

The global nature of the pandemic looms larger than any local crisis—emergencies can lead to financial ruin for low-income and underserved populations, while <a href="https://www.accion.org/the-financial-engine-for-half-the-worlds-jobs-is-about-to-seize-up">small businesses are especially vulnerable</a> to disruptions and shifts in supply and demand. The crisis also raises <a href="https://www.centerforfinancialinclusion.org/building-resilience-how-to-ensure-women-are-not-left-behind-as-a-result-of-covid-19" target="_blank" rel="noopener noreferrer">unique challenges for female entrepreneurs</a> and threatens to reverse gains made in including women in the global economy.

Accion has acted quickly to support our partners and the vulnerable communities they serve.

We’re assisting inclusive financial providers through advisory engagement and helping leaders around the world share lessons gained from evolving challenges. We’re aggregating <a href="https://www.accion.org/covid19">resources</a> and <a href="https://www.accion.org/five-crucial-insights-from-china-for-facing-the-pandemic">sharing insights</a> from China that can help partners in other countries prepare for the months ahead. And we are actively exploring how to connect our partners with emergency funding and are coordinating with them to work on both short- and long-term challenges related to COVID-19. We know there is much more to be done.
<h2>We need your support</h2>
In this unprecedented time, donors will play a more important role in sustaining Accion and our partners. Accion relies on philanthropic support to fuel everything that we do. Philanthropy from institutions and individuals allows us to be pioneering and create demonstration models that encourage further action. Because we’re a nonprofit, we can take risks that for-profit entities can’t, and cultivate new products, markets, and policies that benefit underserved people.

Donors are already stepping up in response to this crisis. Over 700 philanthropic organizations have signed <a href="https://www.fordfoundation.org/the-latest/news/top-foundations-pledge-flexible-funding-to-grantees-in-wake-of-covid-19-crisis/" target="_blank" rel="noopener noreferrer">a pledge</a> to commit more flexible funding in response to COVID-19. And just last week, our partner Mastercard announced <a href="https://mastercardcontentexchange.com/newsroom/press-releases/2020/april/mastercard-builds-on-covid-19-response-with-commitment-to-connect-1-billion-people-50-million-small-businesses-25-million-women-entrepreneurs-to-the-digital-economy-by-2025/" target="_blank" rel="noopener noreferrer">a pledge</a> to bring a total of 1 billion people and 50 million micro and small businesses into the digital economy by 2025, with a focus on women entrepreneurs.

We are grateful for our partners who have already shown support through additional funding commitments and offering increased flexibility for existing grants. This will enable us to work shoulder-to-shoulder with our financial service provider partners to make sure they can continue serving their customers – not only during the immediate response to the pandemic, but over the entire course of recovery. We must act quickly to secure even more funding and make sure it’s  directed toward developing countries, mobilized to reach <a href="https://www.centerforfinancialinclusion.org/can-financial-inclusion-moderate-impacts-to-coronavirus" target="_blank" rel="noopener noreferrer">those who need it most</a>.

This is a challenging moment. But together, we can give people the financial tools they need to manage through this crisis.

Your support can help continue building a financially inclusive world

As I walked through Alaba International and Idumota markets on a recent trip to Lagos, I was in awe of the bustling scene. Not even the rainy season’s torrential downpours could silence the Afrobeat music thumping in the background as buyers and sellers jockeyed for a better deal. Alaba International and Idumota markets reign supreme in Lagos, offering all the goods one can imagine. Alaba International, on the southeastern edge of the city, bursts at the seams with satellite dishes imported from China, secondhand PlayStations shipped in from the UK, and other electronics. Idumota buzzes on Lagos Island, just south of the city center, and is a shopper’s delight replete with wax print hauled over from Ghana, locally produced Nollywood movies, and so much more.

Amidst the action in the markets, I interviewed 22 small business owners who are clients of <a href="https://www.accionmfb.com/">Accion Microfinance Bank (AMfB)</a> to learn more about their financial health and capability. This research will guide us as we develop a framework to help micro, small, and medium enterprises (MSMEs) better understand and achieve financial health. The framework is part of a project we’re undertaking with the support of the <a href="https://www.mastercardcenter.org/">Mastercard Center for Inclusive Growth</a> to increase the <a href="https://www.centerforfinancialinclusion.org/what-financial-health-means-for-small-business-owners">financial health and resilience of individuals and businesses</a> around the globe.

Through my conversations with business owners, I learned about what owners viewed as determinants of their success. We hypothesized that MSME financial health rests on three pillars — earning a profit, having access to capital to seize opportunities, and being resilient to economic shocks. The interviews suggest that our framework is on the right track. For instance, limited and slow access to working capital was commonly cited as a barrier to taking advantage of fleeting business opportunities. We also learned that resilience is not as much about cash-on-hand as it is about being able to quickly shift to other income-generating activities to fill an immediate need.

But arguably, the most eye-opening thing I learned from these interviews had to do with financial capability and the path to entrepreneurship, specifically how owners were able to get the know-how and capital to start their businesses. I had assumed that a commercial bank or <a href="http://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue6/Version-2/J017626267.pdf"><em>esusu</em></a> — a rotating savings and credit association common in Nigeria — were the first two places that a budding entrepreneur would turn to raise seed funding. However, nearly all the merchants and traders I spoke with started their business with a lump sum they earned after spending several years as apprentices in their trade. This practice is part of the centuries-old Igbo apprenticeship model, <a href="https://pdfs.semanticscholar.org/c77a/7e79ec3fb7ce5c9eccdc72d181205251dfb2.pdf"><em>Imu-Ahia</em></a>.

The roots of <em>Imu-Ahia</em> date back to the European colonial era when the Igbo ethnic group native to southeastern Nigeria started to gain a reputation as highly skilled traders and merchants. Today, the apprenticeship model has been widely adopted across the country. Most apprentices-to-be meet their “boss” — someone who is already well-established in a trade — through a family member or close contact. Reasons abound for why one might become an apprentice. Several entrepreneurs I spoke with decided at a young age that they wanted to be masters of a trade, so becoming an apprentice was always part of their plan. Others became an apprentice as a last resort, often after financial constraints forced them to put off academic or other pursuits.

During their tenure, which can range anywhere between three and seven years, apprentices observe and take notes on the tricks of the trade. They are assigned a variety of responsibilities, and eventually, they’re charged with promoting sales and store management. Although most apprentices aren’t paid, they are afforded accommodation, transportation costs, food, and clothing. Once the agreement — which can be either informal or formal — has been fulfilled, the newly anointed entrepreneurs are provided a lump sum to help them start their shop. One interviewee — a vendor of computer and phone accessories — was compensated with N800,000, the equivalent of approximately US$2,200, after spending five years as an apprentice. This is a decent payout considering he currently spends N350,000 (US $970) a year to rent his shop.

So what exactly does <em>Imu-Ahia</em> tell us about how these entrepreneurs perceive the determinants of their success? Many interviewees captured it perfectly when they shared advice for aspiring entrepreneurs: one must meticulously study and practice the skills needed to run a business before diving into it.

This advice resonates with our team at CFI because it positions financial capability — the knowledge, skills, attitudes, and behaviors necessary to make sound financial decisions — as <a href="https://www.centerforfinancialinclusion.org/four-reasons-focusing-on-financial-capability-is-good-business">an essential contributor to business success</a>. The apprenticeship <a href="https://guardian.ng/technology/apprenticeship-and-mentorship-the-key-to-technology-talent-development/">model serves as a learning and testing ground</a> for those who are set on eventually running their own shop, much in the same way that the modern-day business incubator serves as a testing ground for startups. By the time individuals “graduate” from the apprenticeship model, they will have developed the knowledge and skills to manage business revenues and expenses. They also have plans to take advantage of investment opportunities and experience observing how businesses respond to the ups and downs of the market.

I only interviewed former apprentices who found success in the business world, so there’s still more to learn. We need to do more to understand the relationship between financial capability and business outcomes, especially business failures. Nevertheless, these qualitative findings echo the findings of other research. The <a href="https://www.nber.org/chapters/c8222.pdf">National Bureau of Economic Research</a> conducted a fascinating study that showed the differences in the psychological profile of wage workers, own-account workers, and small and medium enterprise (SME) owners. It found that “ability, motivation, and a competitive attitude are very important in differentiating SME and microenterprise owners.” The <a href="http://documents.worldbank.org/curated/en/884291527663849364/pdf/126687-18-6-2018-9-32-12-InvestigatingSMEFinancialCapabilitiesFINALWEB.pdf">World Bank</a> launched a project to measure financial capability of SMEs. Their analysis showed a positive correlation between financial capability and a firm’s size and level of sales.

The striking thing about what we learned in Lagos is not so much that financial capability contributes to business success, it is how, in the Nigerian system such capability is learned: over a period of years, through experience, and under the watchful eye of a knowledgeable mentor.

Keep reading the <a href="https://www.centerforfinancialinclusion.org/blog">CFI Blog</a>, where we’ll share future findings as we conduct surveys around the world on MSME financial health!

A version of this post originally appeared on the <a href="https://www.centerforfinancialinclusion.org/what-an-apprenticeship-system-may-reveal-about-the-financial-health-of-small-business-owners-in-nigeria">Center for Financial Inclusion at Accion blog</a>.

In Nigeria, apprentices can learn more than a new trade

After months studying the drivers of financial health and mobile and internet usage in eastern Europe, I was excited when our team finally landed in Serbia. During the hour-long taxi ride from Belgrade’s Nikola Tesla Airport to Novi Sad, we finalized our work plan for the coming days while catching glimpses of the countryside.

We came to Serbia to join our colleagues at the <a href="http://mfc.org.pl/">Microfinance Centre</a> (MFC) in conducting in-depth interviews with current and prospective customers of <a href="http://www.obs.rs/eng/">Opportunity Bank Serbia</a> and <a href="http://fiiw.pl/">Fundacja Innowacja i Wiedza</a> (Foundation for Innovation and Knowledge). We wanted to learn everything we could about the interviewees’ ambitions, challenges, attitudes, and technology use, so we can use these insights to design and develop a digital tool that will help clients understand and improve their financial health. This research is part of the <a href="https://www.centerforfinancialinclusion.org/about/what-we-do/building-financial-capabilities-and-strengthening-institutions-through-customer-centered-innovations/">Building Financial Capabilities &amp; Strengthening Institutions through Customer-Centered Innovations</a> project, supported by <a href="https://www.metlife.com/corporate-responsibility/metlife-foundation/">MetLife Foundation</a>.
<h2><strong>Euros vs. dinars: Serbia’s dual-currency dynamic</strong></h2>
[caption id="attachment_18520" align="alignleft" width="500"]<img class="wp-image-18520" src="https://content.accion.org/wp-content/uploads/2019/05/ECA-pic-2-1-1024x767.jpg" alt="Novi Sad taxi" width="500" height="375" /> <em>Taxis in Novi Sad, Serbia, often quote cab fares in euros.</em>[/caption]

As we pulled up to the hotel, I was perplexed when our driver, Božidar, quoted the cab fare in euros. Last time I checked, the dinar was the currency of Serbia, since it remains an EU candidate country. Yet Božidar demanded that we pay him in euros, as did many other local vendors. We discovered that our interviewees commonly use euros alongside dinars. One farmer said that she quickly deposits any payments made in euros, but she tends to use her dinars for everyday purchases or stash them at home for emergencies. A shop owner said the majority of her suppliers pay her in euros while she accepts payments from customers in both currencies.

The trend of “euroization” or “dollarization” — a foreign currency substituting or complementing the domestic one — is well studied. The graph below, from the <a href="https://www.oenb.at/en/Monetary-Policy/Surveys/OeNB-Euro-Survey.html">Austrian central bank’s Euro Survey</a>, shows that among its neighbors in central, eastern, and southeastern Europe, Serbia is the most euroized, with the highest proportion of all its cash and deposits held in the form of euros.

Why multiple currencies create financial health challenges in Serbia

If you’ve never used financial services in the past, you’re going to encounter a significant learning curve when you finally get access. That’s why more institutions are rolling out products to support first-time clients and equip them with actionable tips and tools to simplify their experience. These new services aren’t just good for customers, they’re good for business. By helping consumers attain the <a href="https://www.centerforfinancialinclusion.org/a-change-in-behavior-catalogue-of-innovations-in-financial-capability">knowledge, skills, attitudes, and behaviors</a> necessary to make sound financial decisions — what we call financial capability — customers can become more informed and engaged. In other words, they become better customers.

For any financial institution interested in increasing customer loyalty, building better financial capability is crucial.

<a href="https://www.accion.org/accion-and-metlife-foundation-announce-expanded-partnership-to-advance-financial-inclusion/">As we work with MetLife Foundation</a> to expand financial capability through customer-centered innovations, we’re excited about the potential benefits for both customers and institutions. Here are four reasons why helping clients build their financial capability is a win-win:
<h3><strong>1. Financial capability drives active use of financial products </strong></h3>
Products that help increase financial capability, <a href="https://www.centerforfinancialinclusion.org/financial-capability-building-practices-in-mexico">drawing insight from behavioral science</a>, can encourage customers to use products more often, which translates to higher profitability for providers and greater usefulness to customers.

Take the case of <a href="https://www.grupobancolombia.com/wps/portal/personas/productos-servicios/cuentas/ahorro/transaccional/ahorro-a-la-mano"><em>Ahorro a la Mano</em></a><em>, </em>a mobile savings product and e-wallet from Bancolombia, the largest bank in Colombia. The bank discovered that if a customer does not make a transaction within the first month of opening the account, she is unlikely to make a transaction at all. It decided to use <a href="https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/nudge/">“nudges”</a> to remind users to put money into their savings.

Bancolombia worked with<a href="https://www.forbes.com/sites/petercohan/2011/06/01/juntos-finanzas-helps-latinos-save-plan/#3c0a808d5db3"> Juntos</a>, a fintech company that specializes in data science and behavioral insights. Juntos developed a chatbot named <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2018/08/IIF-CFI_FI-Fintech_Partnerships_Final.pdf">“Emilia,”</a>  that could point out opportunities to use the product and makes special offers to encourage transactions within the first month. Because they provide individually tailored messages in a friendly, personal voice, Emilia’s nudges and reminders build trust with clients, and they become more likely to act on her suggestions.
<h3><strong>2. Customer loyalty increases</strong></h3>
As customers use their products more frequently, they are likely to become more loyal. Most financial service providers’ balance sheets and product viability calculations do not figure long-term customer loyalty into their calculations, but customers that stick with a provider over time are important to business success.

In September 2017, BBVA launched <a href="https://www.bbva.com/en/bbva-opens-its-banking-app-in-spain-to-accounts-and-products-from-other-providers/"><em>Bconomy</em></a>, a digital platform meant to add value to the customer experience by giving them a full picture of their financial health. Fueled by data analytics, the platform uses behavioral insights to encourage positive behavior. Clients can see an overall snapshot of their finances, turning their bank accounts into financial management hubs. The tool ensures that customers continue returning to the platform and rely on BBVA as their primary financial provider. To date, the platform has had over <a href="https://www.centerforfinancialinclusion.org/banking-sector-approaches-to-customer-engagement-and-capability">2 million users per month.</a>
<h3><strong> 3. </strong><strong>Capable customers use more products</strong></h3>
Part of the accepted definition of financial capability is a person’s confidence in using a wide range of products to meet their financial needs. Savvy institutions that promote financial capability also build appropriate follow-on products for customers. Institutions that ignore this strategy may see their first-time customers move on to other providers as they become more comfortable with formal finance.

<a href="https://acreimex.com.mx/">Acreimex,</a> a savings and credit cooperative in Mexico, has incorporated savings into payroll loan repayments so that customers who opt in can save painlessly while they repay their loans. Savings discipline is a key attribute of financially capable people, and automated savings is a tool that assists people to stick to their best intentions. Acreimex built this option by combining its two most popular products. It merged its payroll loan and savings services by rounding up repayment installment amounts and automatically depositing the excess amount into clients’ savings.

The combination of products resulted in significant increases in savings activity and balances. An <a href="https://optixproject.org/acreimex/">evaluation</a> showed that participants made about twice as many deposits and saved 30 percent more than those who didn’t participate. Additionally, <a href="https://nextbillion.net/stealthy-saving-building-on-payroll-credit-to-automate-savings/">96 percent of savers chose not to withdraw</a> the balances from their accounts throughout a 12-month pilot.<strong> </strong>
<h3><strong>4. Investing in financial capability is more effective — and less expensive </strong></h3>
Traditional, classroom-based financial instruction is costly. Features that build financial capability are often cheaper and more effective because they generate direct and longer lasting behavior change.

When <a href="https://www.nefe.org/Portals/0/WhatWeProvide/PrimaryResearch/PDF/CU%20Final%20Report.pdf">researchers analyzed</a> more than 200 individual impact studies on financial education, they found that only 0.1 percent of the observed positive changes in people that had attended classroom-based financial education programs could be attributed to the programs themselves.

On the other hand, impact evaluations of financial products that incorporate behavioral insights to nudge client behavior consistently find statistically significant positive impacts. For example, in a study with <a href="http://www.bancoadopem.com.do/app/do/frontpage.aspx">Banco ADOPEM</a>, <a href="https://www.povertyactionlab.org/sites/default/files/publications/124_303%20Rules%20of%20Thumb%20AEJ%20Apr2014.pdf">researchers tracked customers</a> who attended either a traditional accounting-based financial education class or a class that, in keeping with behavioral insights, offered simple rules of thumb in accounting. Both classes aimed to assist customers to separate business and personal accounts. In the end, the customers who received the simplified rules of thumb displayed more positive business outcomes — they saw a 30 percent increase on average in the level of sales during weeks with typically low sales and saved an average of 6 percent more in personal savings.

More and more institutions are thoughtfully designing products and experiences that not only match their customers’ experiences and lives, but also consider their attitudes, skills, and behaviors. Financial institutions that invest in building up financial capability are likely ensuring they will have customers that are more active users of their products, that are loyal for longer, and that will use a wider variety of products.

<em>We’ll continue to share insights on financial capability based on research conducted by Accion’s Global Advisory Services team and the Center for Financial Inclusion as part of our project on </em><a href="https://www.centerforfinancialinclusion.org/about/what-we-do/building-financial-capabilities-and-strengthening-institutions-through-customer-centered-innovations/"><em>Building Financial Capabilities and Strengthening Institutions through Customer-Centered Innovations project</em></a><em>, supported by MetLife Foundation.</em>

Four reasons focusing on financial capability is good business

India is one of the fastest growing and most complex markets for inclusive finance, and there is a massive opportunity to extend financial services to the underserved. But the country has struggled in the past with unbridled growth of the microfinance sector leading to a crisis in debt stress, notably in <a href="https://www.huffingtonpost.com/elisabeth-rhyne/on-microfinance-whos-to-b_b_777911.html">Andhra Pradesh</a> in 2010.

Policymakers and networks of microfinance institutions actively responded to these crises and elevated consumer protection on the policy agenda. But it’s one thing for regulators to signal policy support for consumer protection. It’s quite another to tackle the nuts and bolts of implementing best practices, especially in a market as complex as India.

One of the scalable solutions to arise in India is the concept of microfinance networks as Self-Regulatory Organizations (SROs). Networks that have been designated by the Reserve Bank of India (RBI) as SRO networks are responsible for monitoring compliance of member microfinance institutions (MFIs) to the microfinance industry code of conduct and providing an effective grievance redressal mechanism between borrowers and member institutions. <a href="http://www.sa-dhan.net/">Sa-Dhan</a>, the largest organization of community banks in India, was designated an SRO in 2015. While Sa-Dhan had previously filled a quasi-regulatory role, this official designation expanded its mandate for monitoring and enforcement, in turn increasing its need for tools to identify and respond to risks at both the market and institution levels.
<div id="attachment_33139" class="wp-caption alignleft">

[caption id="attachment_33139" align="alignleft" width="500"]<img class="wp-image-33139" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2018/10/Sa-Dhan-tool-launch-photo-1024x714.jpg" alt="announcement-of-sadhan-monitoring-tool-group-photo" width="500" height="349" /> The Sa-Dhan monitoring tool was announced at a launch event during the Sa-Dhan Annual Conference in New Delhi in September 2018.[/caption]

</div>
Aiming to make a country-wide impact on the state of consumer protection in India, CFI’s Smart Campaign and Accion’s Global Advisory Services collaborated with Sa-Dhan to build a digital monitoring tool based on the <a href="https://www.smartcampaign.org/about/smart-microfinance-and-the-client-protection-principles">Smart Campaign’s global standards</a> for financial consumer protection and local regulatory guidelines. The tool is to be the vehicle through which Sa-Dhan collects the information it needs from its members to fulfill its supervisory role in maintaining compliance with the code of conduct. Accion’s advisory team led the digitization of the tool, building of the data warehouse, and the corresponding web platform. The tool was officially launched at <a href="https://www.accion.org/sa-dhan-the-smart-campaign-launch-ifc-backed-monitoring-tool-to-strengthen-consumer-protection">Sa-Dhan’s annual conference</a> with technical and financial support from the International Finance Corporation. Sa-Dhan’s members can now efficiently self-report data through the tool’s online interface, and Sa-Dhan can quantitatively assess market dynamics, especially areas of overindebtedness risk.

This new monitoring mechanism will help to instill consumer protection in Sa-Dhan’s nearly 200 member institutions and protect more than 30 million clients in India.

Across the microfinance sector, new examples of “regtech” and “suptech” are emerging. Just as technological transformation of microfinance institutions can scale their services to new clients, technology can help regulatory bodies meet their broadened responsibilities to oversee the proliferation of lenders. P. Satish, Executive Director of Sa-Dhan sees the new tool as an essential component for self-regulation because it will “help member MFIs with their data analytics and compliance measures, as well as reduce potential client distress.”

After the initial rollout and training workshops for microfinance institutions across the country, Sa-Dhan will put the tool into practice and will use the reports in consultation with the RBI to identify “hot spots” of overindebtedness or lack of compliance to the code of conduct. These reports will also help Sa-Dhan identify under-penetrated areas and help lenders to expand services.

India’s experimentation with self-regulation holds lessons for the world. Traditionally, self-regulation models have been met with skepticism, especially regarding how non-government networks can monitor and enforce compliance among members. The collaboration between the RBI and self-regulatory organizations in India give weight to the microfinance networks through a layered regulatory approach, and technology advances can build the capacity of networks like Sa-Dhan to access data from their members and oversee performance.

The Sa-Dhan monitoring tool can serve as a model for expanding consumer protection in other markets, especially those where there are concerns about rising debt stress. Better monitoring tools can serve as an early warning system and help provider networks or regulators head off crises before they spread.

This post was originally published on <a href="https://www.centerforfinancialinclusion.org/a-new-digital-monitoring-tool-in-india-could-boost-consumer-protection-capacity">the Center for Financial Inclusion at Accion blog</a>.

Increasing consumer protection for 30 million clients in India

Client Perspectives on Consumer Protection: Analysis of a Client Survey in Cambodia

A Framework for Understanding the Financial Health of MSME Entrepreneurs

Preserving Liquidity: Policymaker Responses to COVID-19 and the Impact on Low-Income Customers

Research from the Center for Financial Inclusion

From the Center for Financial Inclusion

Region

Browse by our areas of expertise and topics related to financial inclusion.

Topic

Browse our case studies, tools, guides, research, and publications.

Content Type

Victoria White

The digital transformation of financial service providers has the potential to close the financial inclusion gender gap by bringing financial tools to more women

Raliat Sunmonu

Federico  Gomez Romero

Small businesses create half the world’s jobs, but they need useful digital financial services to survive and thrive

Dandan Wang

Grassland Finance Limited is guiding small business in the Chinese region of Inner Mongolia as they pivot their businesses to rebuild during the pandemic

Libby Morley

Our financial service provider and inclusive fintech partners from around the world share how they adjusted to disruptions from COVID-19

Accion’s partners in China, Grassland Finance Limited and CD Finance, share lessons learned for financial service providers

With a customer-centric approach that balances technology and human interaction, microcredit company Grassland Finance empowers entrepreneurs

Ashley Lewis

Insights on big data, mobile payments, and what China’s model means for financial inclusion in Nigeria

Answering the needs of low-income, underserved people amid a global crisis requires a united effort by philanthropy, the private sector, and beyond.

Jacqueline Foelster

Research shows how small business owners hone their financial capability as they build job skills

<p>People choose to use euros instead of local currency to protect wealth and hedge against risks of exchange rate depreciation —  something that’s a relatively recent bad memory in Serbia. Many of our interviewees recall the <a href="https://www.nytimes.com/1996/07/09/world/isolated-and-corrupt-serbia-s-economy-stagnates.html">hyperinflation</a> that plagued the economy in the early- to mid-1990s around the dissolution of the Socialist Republic of Yugoslavia. At the peak of Yugoslavia’s hyperinflation, <a href="https://www.vice.com/sv/article/4w38wq/poorest-billionaires-serbia-876">500,000,000 dinars bought a loaf of bread</a>. Several of our interviewees recognized that some of their attitudes toward money might be rooted in the past. And while current realities suggest that the dinar is stable today, risk aversion may be the more prudent course.</p>
<h2><strong>Euros are for saving — dinars are for spending</strong></h2>
<p>Our interviews revealed several insights, particularly around operating in multiple currencies. First, people form mental constructs about the purpose and use of each currency. For the farmer, and several other of our interviewees, euros are for saving, and dinars are for spending. People perceive euros as more stable, and depositing the euros in a bank account or any other formal or informal savings instrument may remove the temptation to spend them If these constructs hold, it could mean that individuals who receive most of their cash in dinars may spend their money more quickly than their peers who rely more on euros.</p>
<p>Our interviews also highlighted the need to manage liquidity properly, which is more complicated in two currencies. The shop owner we spoke with uses euros to pay for her inventory, but she also needs to ensure that her till is stocked with dinars so that she is ready to accept customer payments in both currencies.</p>
<p>Perhaps most important, our field research also confirmed that the risks involved in using multiple currencies, such as borrowing in one currency while operating in another, are a significant consideration when it comes to building financial health. Financial institutions, which have offered loans in a hard currency to people operating primarily in a soft local currency, have often exported currency risk to clients who are not well positioned to handle it. And they have suffered along with their customers when devaluations made it too costly for customers to repay hard-currency loans.</p>
<h2><strong>Next steps in our financial health project </strong></h2>
<p>As we start to develop a digital tool that clients can use to understand their financial health better, one challenge is making sure it accounts for the particular financial behaviors and cognitive biases of a dual-currency system. In addition to brainstorming ideas for behavioral nudges, we need to consider the tool’s user interface, i.e., for our target users in Serbia, are we going to express the value of money in terms of dinars or euros — or both?</p>
<p>We’re excited to put the insights we gained in Serbia to the test and use a customer-centered approach to designing and developing a new solution to help customers build their financial health. Keep an eye on the <a href="https://www.centerforfinancialinclusion.org/blog">CFI Blog</a> for an update when we’re done prototyping in a couple of months!</p>
<p><em>We’ll continue to share insights on financial capability based on research conducted by the Center for Financial Inclusion at Accion (CFI) and Accion’s Global Advisory Solutions (GLAS) as part of our project on </em><a href="https://www.centerforfinancialinclusion.org/about/what-we-do/building-financial-capabilities-and-strengthening-institutions-through-customer-centered-innovations/"><em>Building Financial Capabilities and Strengthening Institutions through Customer-Centered Innovations project</em></a><em>, supported by MetLife Foundation.</em></p>
<p><em>This post was originally published on <strong><a href="https://www.centerforfinancialinclusion.org/dinars-vs-euros-financial-health-and-the-multiple-currency-dynamic">the Center for Financial Inclusion at Accion blog</a>.</strong></em></p>


Currency is one issue that will inform prototyping of a financial health digital tool for Serbia and other countries in Eastern Europe

Yanina Seltzer

Pablo Anton-Diaz

Expanding financial capability benefits financial service providers and customers

Alex Taylor

The Smart Campaign and Accion’s Global Advisory Solutions team up to build a digital monitoring tool for Sa-Dhan, the largest network of microfinance institutions in India

Tools and Insights

Featured brief