Three billion people live in or near poverty. They are left out of, or poorly served by, the world’s financial system. They struggle, in part, because they lack the basic financial tools they need to help them manage their day-to-day lives, weather shocks and seize opportunities.
For more than half a century, Accion has been a pioneer in providing financial services for those left out — hard-working women and men who need someone to give them a chance. In that time, we have helped build 65 microfinance institutions in 32 countries that today provide millions of people with the tools they need to support their families and build a better future.
There is so much more to do and we believe that financial technology is key to doing so. As financial services continue to become increasingly digital, so too does Accion’s work. In recent years, we’ve applied our decades of hands-on experience to emerging digital tools such as big data, alternative credit scoring, and mobile technology to further our vision of a financially inclusive world. After reviewing more than 2,000 innovative companies from around the world, we are now helping more than 30 exciting early and growth stage business with capital and advice. These new partners have the chance to radically improve the ways we provide financial services to so many in need.
While we are proud of these accomplishments, we are humbled by the urgency and enormity of the challenge ahead. As a mission-driven organization, we use three key levers to drive financial inclusion globally:
We are a double-bottom line investor seeking to maximize social impact while creating financial returns. We go places and take risks that others do not. We see what works and what doesn’t. We then scale successful models that can harness the capital markets. Our goal is to create innovative demonstration models that can serve as reference points for other businesses and investors.
We take an active role in governance with our partners and we provide expert advisory services to strengthen our partners and maximize their impact. We help to build sustainable, scalable, profitable, replicable institutions focused on serving the financial needs of the poor and the poorly-served. We see innovation and expertise from all over the world that we bring to help strengthen our partners.
We convene and challenge the industry to focus on the obstacles and solutions on the path to financial inclusion. We set international standards to ensure rigorous client protection and we work with regulators and policy makers to establish healthy enabling environments.
Over the last few months, we worked on a pro-bono basis with Bain & Co. to refresh our strategy. Recently, our Board of Directors approved Accion’s strategy for the next several years. More than ever, we will focus on improving the quality and significantly reducing the costs of financial services for the underserved. Our vision is to build a financial system that works for everyone.
I am pleased to announce:
First, we will significantly increase our efforts to find and grow innovative startups that work to meet the needs of the underserved.
Startup entrepreneurs know best how to reimagine what is possible. And we have a long history of working with startups and helping to build them to scale. Accion’s Venture Lab is already the world’s leading seed-stage investor for financial inclusion. Focusing more of our attention and resources on seed-stage investments will enable us to expand significantly our support for innovative, disruptive start-ups that focus on emerging digital technologies that can cut costs and improve quality for everyone.
Second, we will broaden the range of partners we work with to help them scale and maximize their impact.
We will expand the types of partners we work with, and the capital we have to deploy, to support more established innovative financial service providers maximize their scale and impact. We will help our microfinance partners embrace new, more efficient ways to provide quality financial services, as well as work with new digital financial service providers that are reaching the underserved at greater scale.
Accion’s newly-formed Global Advisory Solutions team will leverage innovation to serve the needs of the customer, building on our expertise in product design, credit, data analytics, risk, and more. And we will continue to find new ways to use the capital markets for good. To help innovators scale up and grow, we have created the world’s first global fintech fund for the underserved, the Accion Frontier Inclusion Fund. Working with a diverse group of investors, the Fund will demonstrate that a significant social impact can be achieved with a healthy financial return – an essential combination if we are to create a financial system that works for everyone.
Third, the Center for Financial Inclusion at Accion will strengthen its efforts to protect and empower clients, and challenge and engage the industry.
With a diverse group of industry leaders, we have built the Center for Financial Inclusion into a leading voice for a fair, equitable, accessible, and beneficial financial system. CFI created the world’s first global consumer protection standard, the Smart Campaign, with stringent third-party certification; today, it reaches 68 institutions with nearly 40 million clients. In the future, we will expand our efforts and work with a broader array of financial service providers including fintech start-ups, mobile network operators, payment companies and banks to find new ways to protect and empower the poor. We will also challenge and engage the industry and its regulators to stay focused on our vision of a financially inclusive world. We are launching a series of research papers focused on the most challenging issues our industry faces on the path forward.
Across all our work, we will focus on five core areas to maximize the impact we have for our clients. With data analytics, we can improve customer acquisition, engagement, risk management, product design and services. This can help make billions of people, who today are invisible to the global financial system, become visible. Through payments and branchless banking, we will deliver services beyond traditional bank branches to reach people who would otherwise be left out. Using digital lending, including marketplace lending, crowd funding, and supply chain finance, we can find new ways to say yes to more people seeking to improve their lives and their small businesses. By automating business operations, we can help make our partners more efficient and more capable of reaching greater scale. And, we will emphasize customer engagement to help create individualized interactions that encourage our clients to reach their goals.
We believe that these five areas of focus specifically — and fintech generally — hold great potential for the world’s three billion financially underserved. We can reveal more creditworthy customers and cut costs for providers. We will harness fintech to create faster, better, cheaper, safer ways to help the world’s three billion financially underserved people access and benefit from the financial services they need.
This is a remarkable time to be doing the work we do. We can only succeed with the continued great support and enthusiasm of our talented staff, our Board, our partners, and our friends and supporters. Accion has been — and will continue to be — a pioneer in our field. Our mission to create a financially inclusive world remains as urgent as ever.
We deeply appreciate your support and are excited about what’s next.