The <a href="https://www.elespectador.com/economia/colombia-lidera-entorno-para-la-inclusion-financiera-regional-articulo-888988">article</a> (in Spanish) notes that Colombia -- along with Peru, Uruguay and Mexico -- lead the <a href="https://centerforfinancialinclusion.org/global-microscope-2019/">Global Microscope 2019</a> rankings this year. Supported by CFI and the Bill &amp; Melinda Gates Foundation, an updated Microscope is published every year by the <a href="https://www.eiu.com/n/">Economist Intelligence Unit</a>. It assesses the enabling regulatory environment for financial inclusion in 55 countries worldwide.

<a href="https://events.iadb.org/calendar/event/20252?lang=en">FOROMIC</a> is hosted by the Inter-American Development Bank (IDB).

In El Espectador: CFI, Mayada El-Zoghbi Mentioned in Microscope Coverage

Colombia

Latin America and The Caribbean

Enabling Environment

Policy, Regulation and Government Initiatives

News

Following the <a href="/id2020-summit-2019">ID2020 Summit</a> in September, Eric Noggle, Senior Research Director, talks to Good ID about the intersection between good digital ID and broader socio-political change. Read more in <a href="https://www.good-id.org/en/articles/everything-connected-making-good-id-matter/">Everything Is Connected: Making Good ID Matter</a>.

Eric Noggle, Senior Research Director, on Making the "Good ID" Movement Matter

Open Society Foundations

IDs for Inclusion

The event, “<a href="https://www.unsgsa.org/resources/news/unsgsa-queen-maxima-world-leaders-participate-unga/">Financial Inclusion for Development: Building on 10 Years of Progress</a>,” included the participation of António Guterres, UN Secretary-General; David Malpass, President of the World Bank; Melinda Gates, Co-Chair of the Bill &amp; Melinda Gates Foundation; Dan Schulman, President and CEO of PayPal; and Ajay Banga, President and CEO of Mastercard.

Watch Mayada ask Queen Maxima about measuring financial inclusion's progress within the framework of the SDGs, and how financial inclusion contributes to achieving the SDGs by 2030. Queen Maxima is the <a href="https://www.unsgsa.org/">United Nations Secretary General's Special Advocate for Inclusive Finance for Development</a>.

More video coverage of the event can be found <a href="http://webtv.un.org/search/financial-inclusion-for-development-building-on-10-years-of-progress/6089500721001/?term=finance%20for%20development&amp;lan=english&amp;sort=date">here</a>.

&nbsp;

CFI Managing Director Asks Queen Maxima About Financial Inclusion's Role in the Sustainable Development Goals

Financial Inclusion Week 2019

Financial Inclusion Strategy

Trends

Bansal, the <a href="https://www.centerforfinancialinclusion.org/about/what-we-do/the-smart-campaign">Smart Campaign</a>'s Senior Director in South and Southeast Asia, notes that the problem over-indebtedness is more severe in the island country than elsewhere.

She also points out that the government's decision to write off business loans of up to 100,000 rupees falls short.

"One-off measures will not do, says Ms Bansal: Sri Lanka needs properly enforced rules that prevent over-indebtedness and ensure fair treatment of borrowers."

Read the <a href="https://www.economist.com/finance-and-economics/2019/08/15/microfinance-is-driving-many-sri-lankan-borrowers-to-despair">full article</a> (soft paywall).

In The Economist: Hema Bansal on Over-Indebtedness in Sri Lanka

The Smart Campaign

South Asia

Sri Lanka

Consumer Protection

Over-indebtedness

Barres's questions that Libra's developers should consider when innovating for the new cryptocurrency are:
<ul>
 	<li>What would data privacy agreements look like if we wanted them to be understandable, fair and with an option to opt out?</li>
 	<li>How would algorithms that did not discriminate be set up?</li>
 	<li>How might fully transparent, low-cost and high-quality products and services that truly solve problems be brought to bear?</li>
</ul>
Read the <a href="https://www.euromoney.com/article/b1g0hvpnhqmyg0/cryptocurrency-facebook39s-libra-is-this-how-we-get-to-responsible-fintech">full article in Euromoney</a>.

In Euromoney: Smart Campaign's Isabelle Barres Poses Questions About Libra

Appropriate Product Design and Delivery

Responsible Digital Finance

The <a href="https://www.centerforfinancialinclusion.org/about/what-we-do/the-smart-campaign/">Smart Campaign</a>'s senior director discussed the motivation behind the survey and forthcoming report with <a href="https://www.newtimes.co.rw/">The New Times</a>, a leading Rwandan news provider.

“We want all stakeholders to understand the actual experiences and concerns of the clients they are serving, protecting or advocating for, because there hasn't been a comprehensive survey underpinning the conduct of this digital financial service before,” <a href="https://content.centerforfinancialinclusion.org/people/alexandra-rizzi/">Rizzi</a> said.

Fraud was a "major problem" for about 40 percent of respondents (with 10 percent falling victim themselves), and while nearly 90 percent trust mobile money services, that trust extends to specific services, namely person-to-person (P2P) transfers. There are approximately 11 million mobile money users in Rwanda.

The report will be available for download on this site in the coming weeks. The results were discussed at a workshop of regulators in the Rwandan capital Kigali in March and will be discussed at the <a href="https://sptf.info/annual-meetings/2019-summit-inclusive-digital-future">Inclusive Digital Future Summit</a> in Nairobi in June 2019.

Read the<a href="https://www.newtimes.co.rw/business/mobile-money-services-enjoy-public-confidence-fraud-remains-threat-survey-reveals"> full article</a> and learn more about the <a href="http://smartcampaign.org/tools-a-resources/1075">Client Voices Project</a>.

&nbsp;

&nbsp;

In The New Times: Smart Campaign's Alex Rizzi Interviewed About Client Voices Project Survey in Rwanda

Rwanda

Sub-Saharan Africa

Client Treatment

Fraud

This <a href="https://soundcloud.com/user-273615244/frt-episode-28-digital-customer-journey">episode</a> of the "FRT" podcast focuses on how digital customer journeys are enabling financial institutions to reach underserved segments in a sustainable manner. IIF’s Conan French host Rhyne and Amin Khairy to discuss the upcoming CFI-IIF paper “Charting the Customer Journey in the Digital Age.”

Rhyne discusses the persistent challenges for digital inclusion and the importance of having a “tech-touch” balance at certain stages of the customer journey.

They also discuss the potential gain in operational efficiencies for financial institutions and the positive impact digitization has on unbanked customers and provide real-life examples of digital customer journeys in various stages: pre-onboarding, onboarding and continued use.

"We're finding that the countries that are making it easy to onboard are those with a good national ID program," Rhyne said. "Having a very clear and simple to use national ID that's easily connected electronically is probably the most important thing."

Rhyne also notes that understanding the unique financial lives of lower income segments is crucial to digitization and different from transitioning banked populations from analog to digital.

Browse more <a href="https://www.iif.com/Innovation/FRT-Podcast">FRT podcast episodes</a>.

&nbsp;

IIF Podcast Features Elisabeth Rhyne Discussing the Digital Customer Journey

Human Centered Design

In the March 14 <a href="https://www.raconteur.net/finance/financial-inclusion-banked">piece</a>, Rhyne’s insights are part of a broad survey of the global financial inclusion landscape -- from barriers to financial inclusion in the developing world, to its benefits and the tools that are helping to integrate marginalized populations into the “financial mainstream.”
“In the developing world there is an issue of absolute low incomes,” Rhyne said in the feature, which appeared in the <a href="https://www.raconteur.net/future-money-2019">Future of Money</a>, a 20-page insert published in <a href="http://www.thetimes.co.uk">The Times (UK)</a> in association with <a href="https://europe.money2020.com/">Money 20/20</a>. “In regards to how much in deposits people would be providing, how large a credit they might want, these are below the threshold of feasibility for banks using traditional branch-based, teller-based models. So you couldn’t put a branch out in a rural area and expect it to be profitable.”
Rhyne uses the example of hyperinflation in Latin America to illustrate why potential customers don't have bank accounts, and concludes the article by noting that digital payments “are going to be essential” over the next decade.

<a href="https://www.raconteur.net/">Raconteur</a> is a publisher of “special-interest content and research” whose special reports are inserted into the printed version of The Times (UK). Read the full article <a href="https://www.raconteur.net/finance/financial-inclusion-banked">here</a>.

Raconteur Features Elisabeth Rhyne in “Challenges in Banking the Unbanked”

Credit

Digital Financial Services

Fintechs

Mobile Banking

Saving

Extensive coverage of the "You Deserve to Know" (#YouDeserveToKnow) campaign in the national Ghanian media features quotes from <a href="https://www.centerforfinancialinclusion.org/bio/alexandra-rizzi">Alex Rizzi</a>, Director of the Smart Campaign.

"This series aims to equip clients with the knowledge they deserve to know to make the best financial decisions for themselves,” Rizzi stated in a <a href="https://www.pulse.com.gh/lifestyle/events/consumer-protection-global-consumer-advocate-launches-you-deserve-to-know-campaign/72tlsjv">Pulse</a> article. Coverage of the campaign also appeared in <a href="https://www.graphic.com.gh/news/general-news/financial-literacy-campaign-launched.html">Graphic Online</a> and <a href="https://citinewsroom.com/2019/02/26/global-consumer-advocate-launches-youdeservetoknow-campaign/">Citi Newsroom</a>.

The campaign focuses on improving the financial enabling environment by educating the public in two topic areas, transparency and fraud.

Listeners in Ghana can tune in to <a href="https://www.facebook.com/adom106.3/">Adom 106.3 FM</a> on Thursdays, 5:30 pm local time, to hear the programs. The episodes include drama and expert interviews on the topics. <a href="https://radio.modernghana.com/station/adom1063fm">Live streaming</a> of Adom 106.3 FM is also available.

The "You Deserve to Know" campaign is in collaboration with <a href="http://www.fiforumafrica.org/">Financial Inclusion Forum Africa</a>.

This Smart Campaign video below provides an introduction.

Smart Campaign's "You Deserve to Know" Radio Campaign Featured in Ghanaian Media

Ghana

Transparency

In this 20-minute episode, Traynor and Anton-Diaz discuss the sobering findings of "Digital Finance and Data Security," and what happens when the systems that are focused on expanding financial inclusion are poorly designed and executed. They also talk through what new companies need to take into account as they break into the market.

Listen and read Hathaway's accompanying post on the <a href="https://www.centerforfinancialinclusion.org/good-intentions-bad-security-podcast-episode-delves-into-cfi-research-on-data-security-in-digital-finance">CFI Blog</a>.  Below, download the CFI research that inspired this episode.

Podcast Focuses on CFI Data Security Report

There's a key new player in the global financial services space. I'll call them the Platform Fintechs – or the “PlatFins.” Super platform technology companies (most famously Facebook, Google, Tencent, Alibaba, and their ilk) are playing an increasingly central role in the financial lives of consumers everywhere, including those that have been kept out of the financial system. The question of the role PlatFins will play in inclusive finance is a critical one for us at Accion Venture Lab — and also for the fintech startups that have already been working to make digital financial services available for all.
PlatFins initiate relationships with consumers for many reasons — they can start with ride-hailing like Go-Jek in Indonesia, food delivery like Rappi in Brazil and Postmates in the US, or even B2B sales like Alibaba in China and IndiaMart in India. But all of them end up as an app (or several) on hundreds of millions of consumers' phones, connecting the supply and demand of core services . Over time, these companies provide other services — Go-Jek offers auto-care, Alibaba provides chat and e-commerce (and just about everything else). Ultimately, many of these platforms become PlatFins, incorporating a slew of financial services that are highly relevant to the consumers they have started to know so well.

Most of these companies start by solving a hard problem that isn’t financial services — like moving things around cities with poor infrastructure. They begin to incorporate financial services in their offerings early on because they need to — fluid and digital payments are critical to the ability of the platform itself to operate optimally. Part of what makes Uber so popular is that you don’t need to pull out cash to pay. The same goes for an e-commerce transaction on Amazon. These companies are solving payments because they need to. They are then coming to the natural conclusion that they can do more.

Read more at <a href="https://www.forbes.com/sites/vikasraj/2019/11/20/platform-fintechs-are-cominghow-should-startups-respond/#3b45718a2b0f">Forbes</a>.

Platform Fintechs Are Coming - How Should Startups Respond?

There are 3,000 million people in the world who lack access to the global financial system. Data analysis of the digital revolution is changing the landscape and support and investment is being found in some of the most creative companies in the world.

When it came to business, transactions used to be too small to be commercially viable, an obstacle to their growth. This is no longer a problem for startups that, with the support of technology, have removed distance barriers.

Michael Schlein, CEO of <a href="https://www.accion.org/">Accion</a> tells us “There is a real pioneer gap where ideas are obtained, entrepreneurs who are initially funded through friends and family; however, after that it is very difficult to reach the next level."

Read more at <a href="https://www.promagazine.mx/inversion-y-crecimiento-fintech/">PRO Magazine</a>.

Investment and growth fintech

This is one of our Fintech From A Peak Interviews, where we talk to people making a big difference in people’s lives with fintech services,
<a href="https://www.accion.org/about">Accion</a>, founded in 1961, is hardly an overnight sensation. This is a story of quietly doing the right thing for a long time and then suddenly the world catches up. Today Accion is still focused on the same mission from 1961, but it is using the latest financial technology. This is Fintech4us (the original name for Daily Fintech in 2014) ie fintech being used to change the lives of billions of people. 
<a href="https://dailyfintech.com/author/bernardlunn/">Bernard Lunn</a> is a Fintech deal-maker, investor, entrepreneur and advisor. He is CEO of Daily Fintech and author of <a href="https://dailyfintech.com/building-the-blockchain-economy-series/">The Blockchain Economy</a>.
The pioneering work of <a href="https://www.democracynow.org/2017/10/6/muhammad_yunus_on_microfinance_grameen_bank">Muhammad Yunus on Microfinance, with Grameen Bank in Bangladesh</a> is well known. Less well known is that Accion was doing similar work in Latin America around the same time.  The organization began in Venezuela and began to lend in Brazil during the early 1970s.
So we were excited to talk to Accion’s CEO.Michael Schlein and to share that knowledge with the Daily Fintech community.
Read more at <a href="https://dailyfintech.com/2019/11/04/fintech-based-inclusion-before-it-was-famous-interview-with-accion-ceo-michael-schlein/">Daily Fintech</a>.

Fintech based inclusion before it was famous – interview with Accion CEO Michael Schlein

The Global Microscope, which has been published since 2007 and is considered the global standard for the analysis of the environment for financial inclusion in developing countries, is prepared by The Economist Intelligence Unit.

Colombia , Peru, Uruguay and Mexico lead the 2019 ranking on the environment for financial inclusion among developing countries globally, an index that focuses on regulation, political strategies and infrastructure, the Inter-American Development Bank announced Thursday (IDB) .

Within the framework of the Foromic celebration , the main event on innovation for the inclusion of Latin America and the Caribbean that is being held these days in Punta Cana (Dominican Republic), the IDB's innovation laboratory highlighted that these four countries incorporate "approaches digital "in their environments.

Read more at <a href="http://El Espectador">El Espectador</a>.

Colombia leads environment for regional financial inclusion

Seed-stage investor <a class="color-link" href="https://www.accion.org/how-we-work/invest/accion-venture-lab" target="_blank" rel="noopener noreferrer" data-ga-track="ExternalLink:https://www.accion.org/how-we-work/invest/accion-venture-lab">Accion Venture Lab</a> recently announced that it was adding $33 million to its initial capital pool of $10 million. That included $23 million raised from such heavy-hitters as Ford Foundation, Open Society Foundations and Prudential Financial, plus $10 million from Accion. For some investors, it’s the first seed fund they’ve participated in.
Accion Venture Lab was launched in 2012 by the nonprofit microfinance pioneer Accion with the goal of investing catalytic capital in early-stage fintech companies focused on providing financial services to underserved populations. For every dollar Accion Venture Lab has invested, its portfolio companies have raised an additional $13 in equity capital from later-stage investors, according to Accion.

While most of Accion’s investments have so far been in emerging markets, about 20% of its portfolio is in U.S.-based companies. One of the new fund’s first investments, in fact, is Austin-based <a class="color-link" href="https://joust.com/" target="_blank" rel="noopener noreferrer" data-ga-track="ExternalLink:https://joust.com/">Joust</a>, which has a platform that provides freelancers, sole proprietors and small and midsized businesses with financial services to help them manage and smooth their cash flows.

Accion Venture Lab Managing Director Tahira Dosani recently talked to me about the new fund, the need for seed-stage financing and the emergence of inclusive fintech companies.

What was the impetus for starting Accion Venture?

Accion Venture Lab was created to address a huge capital gap at the early stage for startups, particularly in emerging markets. It was hard to find someone willing to be that first institutional investor for startups serving a new market. There wasn’t a lot of data, a sense of what the uptake would be like. And these were new markets for an underserved segment. Institutional investors weren’t willing to take the risk. So we wanted to address the gap that we saw. We’ve invested in over 40 inclusive fintech startups around the world.

We combine our provision of capital with provisions of strategic and operational support. Our team has expertise around financial inclusion and we bring that expertise to bear to escalate the growth trajectory of the companies we invest in.

And what are your goals for your new fund?

For many years we invested directly off of Accion’s balance sheet. We decided to raise third-party capital along with Accion’s capital to grow and scale our efforts for a few reasons. Accion was willing to continue to support us. But we needed more capital than Accion could provide. We also see it as a recognition of the importance of being an early-stage, innovative funder and of the potential these companies have to provide both impact and returns at scale.

Beyond that, we wanted to create a vehicle that would be able to bring others along with us. We have a real mix of limited partners, something that’s quite exciting. We have development financial institutions, foundations, high net-worth family offices. For many of our LPs, we were the first seed fund they’d invested in.

What’s behind the growth in fintech startups, especially in emerging markets?

It’s driven by a couple of factors. Technology has advanced. And with the rise of technological innovation in areas like cloud computing, machine learning, blockchain—all these technologies are making it possible to reduce the cost of serving lower-income customers. Someone who is lower income is likely to generate less revenue than someone who is higher income. Transaction sizes are lower. Purchasing power is lower. In order to be profitable, the cost to reach customers and serve them also has to be low.

I also think people are starting to recognize that this is a large untapped market. Low-income people, especially in emerging markets, these are people not usually thought about as a viable market. But anyone who can figure out how to serve this market will have a huge advantage.

At the same time, there is a desire to make sure people aren’t left behind by the financial system.

Read more at <a href="https://www.forbes.com/sites/annefield/2019/10/31/a-conversation-with-accion-venture-labs-tahira-dosani/#33d81ef3694c">Forbes</a>.

Championing Seed-Funding Of Emerging Market Fintech: A Conversation With Accion Venture Lab’s Tahira Dosani

You have bought health and life cover, but have you considered insuring the branded spectacles you bought last Diwali? How about insurance for a new bicycle?

A slew of startup insurance companies, mostly selling online to keep costs low, are trying to sell <a href="https://tech.economictimes.indiatimes.com/tag/micro+insurance">micro insurance</a> products, promising low premiums and rapid settlement. Often working with larger insurers, they try to sell to a small demographic segment of affluent, digitally savvy customers in India where insurance penetration is among the lowest in the world.

This monsoon, for instance, some 25,000 people bought cover against the risk of dengue from <a href="https://tech.economictimes.indiatimes.com/tag/toffee+insurance">Toffee Insurance</a>, a startup backed by funders such as Omidyar Network, Kalaari Capital and Accion. The numbers are small and growing, but mark the emergence of an interesting new trend in a business thus far dominated by long-term plans with annual premiums, for automobiles, accidents, health, property and so on.

Read more at <a href="https://tech.economictimes.indiatimes.com/news/startups/how-startups-are-changing-the-insurance-game/71675761">The Economic Times</a>.

How micro insurance startups are disrupting the traditional model

Lidya which was established in 2016 by Tunde Kehinde and Ercin Eksin was targeted at helping small and medium business enterprises open accounts, save money, build credit profiles, and access credit to grow their businesses and address private necessities.

The company aims to digitize and streamline the credit assessment process to make it easy for any SMEs across Africa to access the funding they need to grow their business.

Tunde Kehinde, co-founder of the firm said “During slowdowns, banks restrict themselves from taking risks while businesses still need to function and finance their operational expenses, Together with the long-term investors on our side, we are basically agnostic to business cycles,” said.

A recent report released by the Organisation for Economic Cooperation and Development (OECD) shows that Poland is among the countries with the highest loan rejection rates for small and medium enterprises.

<a href="https://businessday.ng/technology/article/lydia-eyes-1-1bn-to-revolutionise-msme-funding-in-eastern-europe/">Read more at Business Day Nigeria. </a>

Lydia eyes $1.1bn to revolutionise MSME funding in Eastern Europe

In an increasing trend where African technology companies are finding a global audience, Nigerian digital SME lending platform Lidya has expanded to Poland and the Czech Republic.
Having opened an office in New York, Lidya now has operations in Warsaw and Prague, it says, which is part of its aim to create 100-million jobs globally.

Lidya’s fintech platform lets small and medium-sized businesses (SMEs) register online for loans from $500 and get that credit within 24 hours. This process helps SMEs build a credit history for the first time.

The Nigerian lender had dispersed more than 10,000 loans to 2,000 businesses in its home market, as of July 2019. In its first year, Lidya issued $2 million of loans growing to $10 million in year two. It is on track to become the biggest digital lender in Nigeria by the end of the year, it says.

<a href="https://www.forbes.com/sites/tobyshapshak/2019/10/15/nigerian-sme-digital-lender-lidya-expands-to-europe/#41e6416d49b7">Read more at Forbes. </a>

Nigerian SME Digital Lender Lidya Expands to Europe

Fintech player BASIX Sub-K iTransactions Limited has raised Series C round of funding worth Rs. 75 crore from Denmark-based asset management company Maj Invest.

Hyderabad-based Sub-K plans to utilise the funds for product innovation and strengthening the IT platform to make the company a preferred fintech as well as a distribution partner for banks and financial institutions.

“We will be able to continue to invest in innovations and increase our reach multi-fold, thanks to Maj Invest who shares our vision of creating a world-class vehicle for catalysing inclusive growth, along with our existing investors, Michael and Susan Dell Foundation, Accion and Nordic Microfinance Initiative (NMI),” said Sasidhar Thumuluri, Managing Director and CEO, BASIX Sub-K.

<a href="https://www.thehindubusinessline.com/todays-paper/tp-money-banking/article29631311.ece">Read more at The Hindu Business Line. </a>

Sub-K raises Rs. 75 crore from Maj Invest in Series C round

BASIX Sub-K iTransactions Limited, a Hyderabad-based fintech company focussed on financial inclusion, has raised Series C round of Rs 75 crore from Maj Invest, a Denmark-based asset management company.

Sub-K plans to utilise the funds for product innovation and strengthening the IT platform that would position the company as a preferred fintech as well as a distribution partner for banks and financial institutions, it said in a statement on Wednesday.

<a href="https://yourstory.com/2019/10/funding-fintech-sub-k-denmark-maj-invest">Read more at YourStory.</a>

[Funding alert] Fintech company Sub-K raises Rs 75 Cr from Denmark's Maj Invest

BASIX Sub-K iTransactions has raised Rs 75 crore ($10.57 million) in its Series C funding round, while NeuroLeap raised an undisclosed sum from India’s leading business families. On the other hand, singer Sukhbir Singh invested in coworking space provider Nukleus.

Fintech firm BASIX Sub-K raises Series C  

Financial technology company BASIX Sub-K iTransactions Ltd has raised as much as Rs 75 crore ($10.57 million) from Denmark-based asset management firm Maj Invest, according to an announcement.

This marks the Series C funding round for the company.

The funds raised will be used by the company to facilitate its expansion plans across geographies and build its tech stack.

Having started its operations in 2010, BASIX Sub-K offers a slew of services such as loans, savings, and payments to over 3 million under-banked households, besides micro-enterprises across the country.

BASIX Sub-K raised its first external funding from Michael &amp; Susan Dell Foundation in 2012. Last year, it raised Rs 35 crore from global impact investment firm Accion and Nordic Microfinance Initiative (NMI).

<a href="https://www.dealstreetasia.com/stories/basix-sub-k-neuroleap-nukleus-157311/">Read more at DealStreetAsia.</a>

India Dealbook: BASIX Sub-K, NeuroLeap, Nukleus raise funding to expand ops

FinTechs in India have entered into different segments of financial services. While many have scaled up, some are still struggling to be profitable or make an impact.

ETBFSI spoke to <a class="hplink iframehref" href="https://bfsi.economictimes.indiatimes.com/tag/Paarul+Dudeja">Paarul Dudeja</a>, Director, <a class="hplink iframehref" href="https://bfsi.economictimes.indiatimes.com/tag/Accion">Accion</a> Venture Labs, on how she reads the current <a class="hplink iframehref" href="https://bfsi.economictimes.indiatimes.com/tag/FinTech">FinTech</a> space in India, how do they invest and what’s their exit strategy while investing in FinTechs. Edited Excerpts.

Q. How’s the current <a class="hplink iframehref" href="https://bfsi.economictimes.indiatimes.com/tag/Digital+lending">digital lending</a> environment ?
We are not seeing Lending 3.0 in India. We will reach there when concerns around data privacy, managing security &amp; addressing customers' needs will be addressed.

Lending 2.0 was more about having the digital component to lower the cost which enabled lenders to serve customers and provide access to financial services at a low cost. Lending 3.0 is all about caring for the customers.

Q. Have digital lenders solved the collections part of lending?
Many lenders have not been able to solve the collections peice, but there are FinTechs primarily focused on collections trying to create a structured and logical approach to collections.

I don’t think collections have been sorted; new-age NBFCs are trying to think from a perspective that now they have better tools to underwrite, with these tools they have to make sure customers coming into the funnel are of high quality so that they don't have to worry much about collections.

It’s an interesting way to look at it by new-age NBFCs saying "we understand we won’t get there to the collections part, let’s try to solve it at the beginning of the funnel."

Q. How do you view the Indian FinTech space?
Indian FinTech space is interesting because last quarter (June 2019) the number of FinTech deals that happened in India exceeded China for the first time. It’s good news and fantastic but at the same time what we’re realizing is that it’s all Me Too.

We’re not seeing any new innovation around here, so I would hope new crop of entrepreneurs are trying to tackle problems slightly in a different manner, maybe they’re going to go through specialised routes and try to address the areas that are still open.

Q. What’s your investment strategy in FinTech?
Accion is an impact fund, we look for a middle point of returns and impact. We have a two-phase screening process.

In the first phase, we look at the impact criteria, it’s only when the company meets the impact criteria we start looking at the financials which is the second phase. So if a FinTech is not an impact idea, we don't take it ahead. But FinTechs have to cross the second screen of financial returns as well when we go to the second stage.

We look at all multiple parameters like founder background, addressable market size, etc. As a seed-stage investor, to invest in a company it’s primarily looking at what the founder has done &amp; what the idea is, can we push them around to think through the idea of the founder.

Q. What’s your exit strategy?
As an impact player, the idea is to have an ecosystem build-out, for the entrepreneurs, for the impact, and other investors. We play with pretty much everyone in the ecosystem.

Since we come at seed stage, the exit strategy for us typically ends up being, look we’ve helped you with your governance, strategy and supported you to the growth phase proving your concept, by the time a FinTech is raising Series C or D, our role is sort of eliminated at that point or diminished &amp; we come out of the cap table at that point.

<a href="https://bfsi.economictimes.indiatimes.com/news/fintech/indian-fintechs-are-in-metoo-phase-paarul-dudeja-accion-venture-labs/71498022">Read more at The Economic Times.</a>

Indian Fintechs are in MeToo phase: Paarul Dudeja, Accion Venture Labs

Ten years ago, Rushd Averroës moved from Yemen to the UK to study. Keen to start settling into the country straightaway, one of his first steps was to try to set up a bank account. But, as he soon found out, getting access to finance wasn’t as easy as he had hoped.

“It was very hard,” says Mr Averroës. “Almost every traditional bank I went to didn’t let me open an account because they said I couldn’t prove my identity. Even though there were many ways to prove who I was, the banks only wanted to use the system they had been working with for years. This is where immigrants can feel excluded because a bank account is a basic human right.”

His difficulty in accessing traditional banking services is a common one among the world’s nearly 30 million refugees and asylum seekers. Their financial inclusion is being restricted by banking rules that prevent access to finance, not only opening a current account, but also getting a business loan. This therefore impacts how quickly new arrivals can start growing financial roots.

People can be unbanked but still financially savvy

Swati Mehta Dhawan, researcher and consultant on the financial inclusion of low-income households, has studied access to finance for refugees and asylum seekers in Germany, where immigration has significantly increased over the last few years, amid the arrival of nearly one million people, notably from Syria and Afghanistan.

“As people get into the system and integrate, they will end up performing a lot of financial firsts, like getting a rental contract, opening a bank account or registering a business,” she says. “They are bound to make mistakes because they don’t understand the system or the new language very well. While support for integration in the labour market was in place, we found that when it came to financial aspects, the support was not there.”

This gap within the context of immigration can, however, be filled by fintech solutions. In the past few years, companies such as Leaf, a virtual bank that allows refugees to save and transport assets securely across borders, and Now Money, a digital bank for migrants in the United Arab Emirates that helps them send remittances cheaply and easily, are <a href="https://www.raconteur.net/finance/financial-inclusion-banked">playing a role in banking the unbanked.</a>

US-based Accion Venture Lab, the seed-stage investment initiative of global non-profit organisation Accion, is supporting Leaf and has just launched a $23-million fund for inclusive fintech companies.

Vikas Raj, managing director of Accion Venture Lab, says: “From our perspective, the opportunity is twofold. There is more opportunity for fintechs working with migrants and refugees by using the same tools that others are already leveraging. Leaf, for example, is using a whole set of tools that didn’t exist ten years ago, including mobile money and blockchain. That would not have been possible before because not everybody had a mobile phone and blockchain was just an idea. We have these tools now.”

<a href="https://www.raconteur.net/finance/access-finance-immigration">Read more at Raconteur. </a>

Immigration: can fintech help with the transition?

Dvara KGFS has raised ₹70 crore in the final round of Series E funding, taking the total tally of funds raised under this round to ₹167 crore.

The latest round of funding came from Nordic Microfinance Initiative (NMI), an investment fund owned by the Norwegian and Danish governmental funds for developing countries.

Dvara KGFS raises ₹70 crore in final round of Series E funding

<a href="https://economictimes.indiatimes.com/topic/Dvara-KGFS" target="_blank" rel="noopener noreferrer">Dvara KGFS</a> on Wednesday announced that it had raised Rs 70 crore from <a href="https://economictimes.indiatimes.com/topic/Nordic-Microfinance" target="_blank" rel="noopener noreferrer">Nordic Microfinance</a> Initiative (NMI) in the final phase to the Series E round of equity infusion.

"We look forward to partner with NMI and tap into their significant experience in financial inclusion both in India and overseas," said <a href="https://economictimes.indiatimes.com/topic/Samir-Shah" target="_blank" rel="noopener noreferrer">Samir Shah</a>, Executive Vice-Chair and Group President of Dvara Trust. "The opportunity available for NBFCs in India is tremendous and the scope of financial inclusion is immense. At Dvara, our focus is vast because we do not look at only the untapped financial population but also the undertapped population in the country."

Dvara KGFS has a presence in Tamil Nadu, Uttarakhand, Karnataka, Chhattisgarh, Odisha and Jharkhand. It is spread across 46 districts with 276 branches and more than 1 million enrolled customers. NMI is a public-private partnership owned by the Norwegian and Danish governmental funds for developing countries that invests in microfinance institutions in Asia and Africa.

Dvara KGFS raises Rs 70 crore from Nordic Microfinance Initiative

Earlier this month, US-based impact investor <a href="https://www.vccircle.com/accion-venture-lab-raising-new-fintech-focussed-fund/" target="_blank" rel="nofollow noopener noreferrer">Accion Venture Lab raised a $33-million</a> (Rs 238 crore) fund where it is mobilising $23 million for a co-investment vehicle with third-party investors and a $10-million investment by the global nonprofit investor Accion International. The firm aims to invest about 30% of its new fund in South and Southeast Asia including India, where it wants to tap into the huge underserved demand for financial services.

In an interview with VCCircle, Accion Venture Lab managing director Vikas Raj explains the firm’s investment thesis, how it helps entrepreneurs and its India activities. Edited excerpts:
<h4>What led to the idea of setting up Accion Venture Lab?</h4>
Venture Lab is a seed-stage investor in startups around the world that are using new technology and business models to expand access and improve quality and affordability of financial services for the underserved. There are three billion people around the world who do not have access to a full suite of financial services. Of these, 1.7 billion don’t have any kind of access—no account and no financial service provider in their village or their part of the town.

Accion Venture Lab was started after the realisation that in many developed and developing markets, the penetration of technology like internet and mobile have far outpaced the penetration of financial services. And there was an opportunity to exploit that delta which has been ignored by the financial system at large.

Many early-stage startups which use technology to driver innovation are not getting funding from mainstream institutional investors, and it is not surprising because they are too risky.

Also, they are trying to work in a sector where regulations are very opaque and where it is hard to make unit economics work because of small loans. It is fundamentally very expensive to identify and serve the customers.

We were built to find phenomenal entrepreneurs who were innovating this way and provide capital to them so that early-stage startups can test their models and get to the point where later-stage commercial and impact investors would find them attractive.

So, a big part of our model is to find such great companies, institutionalising them, helping them with core operating and strategic issues, getting involved with governance and readying them to raise further capital. We started investing about six-and-a-half years ago and we have had some success in supporting these companies.

<a href="https://www.vccircle.com/see-big-opportunity-in-india-to-drive-impact-and-returns-accion-venture-s-vikas-raj">Read more at VCCircle.</a>

See big opportunity in India to drive impact and returns: Accion Venture’s Vikas Raj

People who work but don’t receive a salary — Uber drivers, entrepreneurs, owners of very small businesses, freelancers — fall through the cracks of traditional financial services for obvious reasons.

They do not receive automatic paychecks that can be deposited into accounts that come with debit cards. Efforts to verify their employment sometimes fail. They have spotty cash flow, especially if the rent or another big bill comes due while a client payment is delayed.

A handful of fintechs emerged last year to meet the financial needs of this group, including Joust, Qwil, Steady and Salaryo. They have grown bit by bit, and venture capitalists are starting to pay attention to them.

Fintechs serving gig-economy workers raise funds, plot expansion

The Gulf’s economy — from oil production to tourism — is underpinned by expatriate workers, the majority of whom are not paid enough to open a regular bank account.

About 70 per cent of the population in the Middle East and north Africa do not have access to banking services, says Ian Dillon, co-founder of Now Money, a Dubai-based financial technology group.

Founded four years ago, the company aims to open up financial services for the low-income workers in the six-nation Gulf Cooperation Council: labourers, taxi drivers, cleaners and hotel staff who arrive largely from south Asia and Africa.