It was a very good year, and we have terrific momentum – and with your continued support, we will keep it going.
At the end of last year, we committed to investing $100 million over three years to help build financial inclusion for the world’s poor. In 2012 alone, we invested no less than $67 million in pursuit of our strategic goals: to build the next generation of top-tier microfinance institutions (MFIs), to push the frontiers of financial inclusion beyond MFIs, and to help build a stronger industry. With your support, we have made significant progress in all three areas.
Among our most notable milestones in 2012 was the successful closing of Accion Investments in Microfinance, a for-profit equity fund launched in 2003 to provide commercial capital to MFIs working in markets where such funding was typically unavailable. The fund proved that a double-bottom-line approach – delivering both financial and social returns – really is possible. Over its life, it generated more than 15 percent returns to shareholders. More importantly, it helped fund access to financial services for more than a million clients in Latin America and Africa.
We also committed our capital and professional expertise to strengthen MFIs in Bolivia, China, Colombia, Mexico and the Philippines – countries where financial inclusion remains elusive for millions of people living in poverty.
The second pillar of our strategy is to invest in innovative new companies with compelling new products and services created specifically for those living in poverty. We are doing that through two vehicles: Accion’s Frontier Investments Group and our $10-million Venture Lab. The following pages detail the exciting work these two groups are doing, including support for affordable housing and private-school financing for the poor in India, ‘nano-loans’ delivered by cell phone in Chile, and mining ‘big data’ to assess character for unsecured lending.
Third, we continue to invest in building a strong industry with high standards. Leading this charge is the Center for Financial Inclusion at Accion, whose Smart Campaign for consumer protection already boasts more than 3,600 endorsers in 135 countries, representing more than 1,200 MFIs that collectively serve no fewer than 60 million clients.
The Center is also leading the campaign for Financial Inclusion 2020. With sponsors and partners such as Citi, Visa, MasterCard, Western Union, Moody’s, Deutsche Bank, CGAP, IFC and the Bill & Melinda Gates Foundation, the audacious FI2020 project dares to envision a financially inclusive world – and to chart the course for turning that vision into reality.
It was a very good year, and we have terrific momentum – and with your continued support, we will keep it going.
At Accion, we refer to 2012 as “the year of investments.” Not only did we make significant investments of equity and human capital in new and ongoing projects worldwide, but we also successfully closed Accion Investments in Microfinance, certainly among the most effective socially responsible impact funds in history.
Over its 10 years of groundbreaking work, Accion Investments helped provide financial access for a million clients in Africa and Latin America, all while returning 15.62 percent, or more than $2 for every dollar invested, to shareholders. And it proved that MFI funding could attract private capital, which we believe is critical if financial inclusion is to scale to meet true demand.
We also invested, or partnered to draw in investment, in MFIs all over the world. In Bolivia and Colombia, we recapitalized our longtime partners BancoSol and Finamérica, respectively, so that they can better serve people in need. In China, we are raising more than $60 million to replicate Accion Microfinance China’s unique model throughout China. We are doing this in partnership with Sagamore Investments, which has committed up to $22 million, and with a number of other investors. In Mexico, we invested nearly $2 million in CrediConfía, a young MFI serving microentrepreneurs and low-income families in the rural and semi-urban areas of the eastern and central regions of the country. And in the Philippines, we helped launch Bridge, a holding operating company that will invest $24 million and help build capacity in provincial banks in underserved areas.
To help improve the labor-intensive process of microlending, we also launched a dynamic pilot program in Colombia called Avanza, which holds the promise of making microloans a much more cost-effective service for clients and institutions alike. Working with Finamérica, Avanza uses mobile teams of loan officers and a risk-adjusted approach to reach, enroll and process loan applications from new and existing clients. The program has already reduced loan disbursement time from an average of five days to as little as 18 hours. We hope that by year’s end, a client could meet with a loan officer in the morning and receive a loan by late that afternoon. To date (Q2, 2013), more than 3,000 clients have benefitted from Avanza.
Our work in China was recognized for its innovation and pioneering, while our work in Nigeria was also recognized for its excellence. Philanthropedia named Accion among the most effective nonprofits in the field of microfinance. (Philanthropedia is a division of GuideStar, a leader in nonprofit analysis that tracks almost two million organizations.)
Because financial tools are put to best use by those with the knowledge to wield them, we continue to build our Dialogue on Business skills training and financial literacy programs. In Latin America we have helped train nearly three quarters of a million entrepreneurs; we are now accelerating these programs in India, where Accion has partnered with Muthoot Pappachan Group, Mann Deshi Bank, the Aga Khan Foundation, Citi Foundation and Friends of Women’s World Banking. To date, Accion in India and its partners have brought financial literacy and business skills, in five different languages, to more than 50,000 Indian women.
We continue to explore new opportunities for partnerships in Côte d’Ivoire, the Democratic Republic of Congo, Kenya, Mozambique, Myanmar and elsewhere, where we believe that our experience can help open the door of financial inclusion to millions more people.
Impact investing uses venture-capital tools to generate both financial and social returns, and it is instrumental in helping to build financial inclusion through the provision of new products and services for the poor.
Impact investing uses venture-capital tools to generate both financial and social returns, and it is instrumental in helping to build financial inclusion through the provision of new products and services for the poor. In Asia, Africa and Latin America, we are seeing scores of dynamic new start-up companies whose missions and markets are sharply focused on the bottom of the economic pyramid. In many cases, lack of access to funding, technical support and business mentoring stand in their way.
That is why, throughout 2012, we continued to make early-stage investments through our Frontier Investments Group in promising young companies such as Tiaxa, a mobile services provider that gives prepaid phone users instantaneous access to ‘nanoloans.’ And in Shubham, which offers mortgages for quality, affordable housing to low-income clients in India. Frontier also invested in early 2012 in Zoona (formerly MTZ) a mobile payments business in Zambia, Zimbabwe and Mozambique that is transforming the way people and organizations transact business by reducing reliance on cash.
Frontier’s important role in impact investing was recognized this past year by ImpactAssets 50, the first open-source, publicly published database of experienced private-debt and equity-impact investment fund managers, identified for their ability to deliver both social and financial returns.
Equally compelling was the launch, in April 2012, of Accion’s Venture Lab – our seed-stage investment initiative – which has closed its first five investments:
The Campaign recently launched its certification program, an independent, third-party evaluation designed to publicly recognize financial institutions that meet appropriate standards of care in how they treat clients. Certification will enable microfinance institutions to demonstrate their commitment to client protection.
Early in 2013, the Center for Financial Inclusion launched Financial Inclusion 2020 (FI2020) – an unprecedented collaboration involving sponsors Citi, Visa, MasterCard, Western Union, Bill & Melinda Gates Foundation, Moody’s and Deutsche Bank, as well as 50 other partners such as CGAP and the IFC who are involved in various working groups. FI2020 is a global movement to engage the world’s key players – governments, corporations and NGOs – who can help make financial inclusion a reality by the end of the decade.
FI2020 is comprised of two distinct projects. ‘Mapping the Invisible Market’ is researching how changing demographics and income in developing countries will shape the need for financial services around the globe. The ‘Roadmap to Financial Inclusion’ is comprised of five distinct working groups concentrating on the key challenges we face in reaching full financial inclusion and what can be done to overcome them.
The work of the various FI2020 task forces and working groups will culminate in the Financial Inclusion 2020 Forum in London in October 2013, convening leaders from around the world and across industries to strategize on how we can work together to make financial inclusion a reality.
To strengthen the industry, we also continued to improve collaboration through the Microfinance CEO Working Group, which comprises the heads of Accion, FINCA, Freedom from Hunger, Grameen Foundation, Opportunity International, Pro Mujer, Vision Fund and Women’s World Banking. The Group has reaffirmed its commitment to the Smart Campaign, to MicroFinance Transparency and to the Social Performance Task Force, and joined with other global microfinance leaders to issue the ‘Global Appeal for Responsible Microfinance,’ a landmark document urging all microfinance stakeholders to take concerted action to ensure a strong and principled industry.
In 2012, the Social Performance Task Force released its Universal Standards for Social Performance Management and reported on how a group of select MFIs tested adherence to those standards. We believe that the standards are a critical step forward for microfinance, and we hope other institutions will take on the challenge of assessing themselves and implementing them.
A key part of our commitment to strengthening the microfinance industry and expanding financial inclusion is training microfinance professionals around the globe. We help them prepare to become managers and leaders in the field through specialized training programs, workshops and exposure visits. In 2012, more than 3,800 microfinance professionals were trained through our programs.
Today, the microfinance industry reaches about 200 million clients. That’s an impressive number – but when we consider the 2.5 billion people who live in poverty and still lack access to financial services, it’s clear that we have much more work to do. By building the next generation of top-tier microfinance institutions, by investing in innovative new companies, and by strengthening an industry through higher standards, we can move significantly closer to our vision of a financially inclusive world.
Small businesses flourish, people find job opportunities and communities thrive when entrepreneurs in the United States can access affordable capital. The Accion U.S. Network increases access by scaling innovation, building partnerships and focusing on rigorous impact evaluation and research.
Small loans incite sustainable change, and Accion is uniquely positioned to bring this change to meaningful scale in the United States. Five Accion member organizations headquartered in cities throughout the United States form the largest micro- and small business-lending network in the country.
Since 1991, member organizations in the Accion U.S. Network have provided more than 46,000 loans totaling more than $360 million. In 2012 alone, they lent more than $36 million to businesses nationwide. The work of the Network, established in 2011, multiplies the opportunity it creates for small business owners nationwide.
Building National Partnerships
Groundbreaking corporate partnerships are allowing Accion to reach greater numbers of small business owners across the country, deepen work in existing markets and provide increased opportunities for entrepreneurial training.
In 2008, network member Accion East and Online launched the Brewing the American Dream program, a partnership with the Boston Beer Company in Massachusetts. In 2012, the program expanded nationally to provide funds and training opportunities to low-to-moderate-income entrepreneurs in the food and beverage industry, disbursing $827,000 in loans to more than 80 entrepreneurs; in addition, more than 700 individuals.
2013 MEMBER HIGHLIGHTS
Accion is a global nonprofit dedicated to building a financially inclusive world. We work to create economic opportunity by connecting people to the financial tools they need to improve their lives. Begun as a grassroots community development initiative in 22 shantytowns in Venezuela, today we are one of the premier microfinance organizations in the world, with a network of lending partners that spans Latin America, Africa, India, China and the United States.
Your support not only benefits people today, but generations to come. Thank you.
You can make an outright gift using our website at www.accion.org/donate.Sustainer’s Society
Join the Sustainer’s Society and demonstrate your commitment to bringing financial empowerment to millions of people by making automatic monthly contributions to Accion.Recife Society
The Recife Society honors and recognizes those loyal supporters who are helping to ensure the future empowerment of hardworking people worldwide through planned giving. Accion advisors can help guide you with gift strategies that provide your family with tax advantages.Tribute Gifts
Make a donation in honor of someone special. Let us know who you would like to honor, and we’ll send a gift card or letter acknowledging that you’ve made a donation to Accion in his or her name.A Gift of Stock
Accion welcomes tax-deductible contributions in the form of securities. When you donate this way, you support our work by contributing appreciated assets without incurring capital gains taxes.Socially Responsible Investments
Accion’s Bridge Guarantee Lenders allows individual investors to help secure the financial sustainability of microfinance institutions around the world while earning both social and financial returns.
Please visit www.accion.org to learn more about these options. Accion staff may be reached at 617-625-7080 x1109 or by email at firstname.lastname@example.org.