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 financing from our partner Accion Microfinance Bank 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 seize up. 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.
Inclusive finance is key to recovery and resilience
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 Sogesol helped more than 8,000 Haitians restore their homes and small businesses through microcredit and distributed emergency grants to 2,000 of its most vulnerable clients.
In Uganda, which hosts almost 1.4 million refugees, Accion partner UGAFODE Microfinance Limited launched a digital program in 2019 to serve people fleeing conflict or hardship. UGAFODE is also the first financial institution in Uganda to open a branch inside a refugee settlement.
Today, our partners are rapidly adapting to meet new needs arising from the pandemic. In India, Toffee Insurance is introducing new products to help underinsured people build financial resilience to the impact of COVID-19 and challenges that may arise in the future. Toffee 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.
What Accion is doing now
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 small businesses are especially vulnerable to disruptions and shifts in supply and demand. The crisis also raises unique challenges for female entrepreneurs 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 resources and sharing insights 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.
We need your support
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 pledge to commit more flexible funding in response to COVID-19. And just last week, our partner Mastercard announced a pledge 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 those who need it most.
This is a challenging moment. But together, we can give people the financial tools they need to manage through this crisis.