For more than 50 years, Accion has worked to create a financially inclusive world that benefits the three billion people who are left out of or poorly served by the financial sector. We’ve helped tens of millions of people living in or near poverty by working with more than 90 microfinance and fintech partners in 40 countries.
We’re proud of that legacy, yet we understand that there’s so much more to do. In 2016, we completed a strategic refresh meant to expand and improve our work. That process helped us clarify our roles finding and growing seed-stage startups that meet the needs of the underserved, helping innovative yet mature financial service providers maximize their impact, and protecting and empowering clients, as well as challenging and engaging the financial inclusion industry.
Accion believes in the transformative potential of fintech, and we believe it is our role as a financial inclusion leader to ensure that emerging technologies meet the financial needs of the poor. Accion’s seed-stage impact investing initiative, Venture Lab, has partnered with 30 inclusive seed-stage startups that harness innovation to drive financial inclusion globally. The team helps its partners overcome strategic challenges, harness innovation, and accelerate financial inclusion.
By scaling innovative yet established financial service providers, we help the best ideas maximize their impact. Accion’s newly-organized Global Advisory Solutions team leverages decades of strategic and operational expertise, combining innovation and a deep understanding of client needs to address product design, channels development, risk analytics, and other challenges. We pursue investments in the markets where we can do the most good: Accion’s follow-on investments in India’s IFMR Holdings and Peru’s Credinka provided new resources that helped both partners reach more clients. We also continued combining decades of experience with insights into emerging technologies to provide the operational and management support our partners need to meet the needs of the underserved.
Accion recorded a significant milestone with the launch of the first global fintech fund for the underserved: the Accion Frontier Inclusion Fund, managed by Quona Capital. The Fund aims to catalyze fintech innovations that can radically improve the quality and availability of financial services to the underserved. We raised $141 million from leading impact investors; their participation underscored fintech’s ability to help the underserved and signaled investors’ eagerness to support these solutions.
Our partners’ work occurs in a wider context, so Accion continued to engage and challenge the industry as well as protecting and empowering clients. The advocacy, research, and insights generated by the Center for Financial Inclusion (CFI) at Accion pushed industry stakeholders to overcome obstacles to financial inclusion. The CFI’s Fellows Program examined key financial inclusion questions and its evaluation of financial health developed a new framework for assessing individual and household financial well-being. The Smart Campaign – the world’s first global financial consumer protection standard – is one of the CFI’s signature initiatives; 83 institutions serving 37 million clients adhere to the Campaign’s rigorous Client Protection Principles.
We understand that our supporters expect us to maintain the highest standards when it comes to transparency, accountability, and fiscal responsibility. Charity Navigator recognized our commitment to these qualities when it once again awarded us its four-star ranking. Likewise, Accion was selected for the “ImpactAssets 50,” a yearly review of the top impact investment fund managers.
This work is as challenging as it is fulfilling. Accion provides millions of people with the tools they need to build better lives, and we strive to help even more people by building a financially inclusive world.
We thank our many partners and supporters for helping to make all of these accomplishments possible.
President and CEO
DIANA L. TAYLOR
Reaching tens of millions of
families and entrepreneurs in
40 countries since 1961
Active savers in 2015,
with $5.1 billion in savings deposits
Clients served by
For the first global fintech fund
for the underserved
Three billion people are left out of or poorly served by the world’s formal financial sector. They struggle in or near poverty and lack the financial tools they need to build better lives. Accion believes that inclusive fintech has the transformative potential to help them, and we believe that – as a financial inclusion leader – our role is to accelerate the growth and use of responsible fintech and address this urgent problem by creating a financially inclusive world. Our focus on disruptive startups can spur innovation while improving the quality and lowering the costs of financial services for those who have been left out.
Accion’s seed-stage impact initiative, Venture Lab, has partnered with 30 inclusive seed-stage startups that harness innovation to drive financial inclusion. Its investments and support develop and refine the higher-quality, cheaper, faster, more convenient, safer, and more accessible financial services that entrepreneurs and families need.
Venture Lab will soon deepen its work in Africa, prioritizing the sub-Saharan region, where two-thirds of adults lack access to a formal bank account. There, Venture Lab will catalyze innovation in the region by launching, incubating, and scaling local startups that are using new technologies to meet the needs of the underserved. Investing in and providing consulting support to fintech startups in this region will help micro, small, and medium enterprises (MSMEs) and individuals access vital financial products and services.
Venture Lab’s emphasis on MSME financing innovation addresses an important issue. MSMEs contribute up to 33 percent of national income in emerging countries and create four out of five new jobs. But these businesses typically cannot receive the financing that they need – globally, MSMEs face a $2.6 trillion financing gap. Venture Lab has invested in more than a dozen startups working in MSME financing, and will continue to research the ways that new lenders use technology to improve client acquisition, underwriting, and funding to provide entrepreneurs with the financing they need.
Some of Venture Lab’s investments include:
Apollo Agriculture, a tech-enabled financing solution for smallholder farmers in East Africa that uses remote sensing technology, data science, and mobile money to provide farmers with the fertilizer and seeds they need, efficiently and affordably.
Destacame, a Chile-based alternative data credit-scoring startup that uses utility payments data and other information to generate credit scores that financial institutions use to extend financing and other financial products to thin-file and credit-invisible customers.
First Circle, a Philippines-based small business lending startup that combines a technology-enabled platform with alternative data sources – including e-commerce data and transaction history – to provide Filipino/a entrepreneurs with the financing they need within days.
Lulalend, a South Africa-based online lending platform that uses an innovative credit scoring algorithm to evaluate entrepreneurs’ creditworthiness and provide them with short-term business funding within 24 hours.
Accion assists innovative, established financial service providers in reaching scale and maximizing their impact. Combining decades of expertise with insights into new technologies, we help microfinance institutions (MFIs) embrace new ways to provide quality financial services. We also support established digital financial service providers’ growth.
The first global fintech fund for the underserved, the Accion Frontier Inclusion Fund, began its first year of full operations. Accion is the Fund’s anchor investor, general partner, and sponsor. Quona Capital, the Fund’s manager, is an early growth-stage venture firm focused on fintech for underserved consumers and businesses in emerging markets. The Fund catalyzes fintech innovations that can radically improve the quality and availability of financial services for the underserved. The Fund will pursue solutions that have the greatest potential for inclusive fintech in Asia, Latin America, and sub-Saharan Africa.
The Fund received $141 million in commitments from leading institutional investors; their involvement underscored fintech’s ability to help the underserved and signaled investors’ eagerness to support these solutions. Some of the Fund’s investments include:
Coins, a Philippines-based digital payments and blockchain startup that helps people and businesses move money safely and quickly.
CreditMantri, an Indian credit advisory platform that helps consumers and businesses create credit histories and risk portfolios.
DunasPlus, a Brazilian company that uses an automated platform to provide entrepreneurs with non-bank financing.
Yoco, a South Africa-based mobile point-of-sale payment solutions company that helps entrepreneurs accept credit and debit payments.
Global Advisory Solutions
Accion’s Global Advisory Solutions (GLAS) team offers decades of strategic and operational expertise. GLAS’s advisory support combines innovation and a deep understanding of client needs to increase the quality and lower the costs of financial services.
GLAS also shares its insights with the broader industry, expanding its impact by publishing new research that examined how data-driven innovation helps financial service providers accelerate financial inclusion. GLAS also studied how to provide women-owned MSMEs in India with financing.
In India, Accion’s recent follow-on investment in IFMR Holdings reaffirms our commitment to the financial inclusion pioneer. IFMR Rural Channels provides a wide range of financial services in underserved, rural villages. IFMR Capital provides financing to more than 100 of India’s most prominent financial inclusion intermediaries that, together, serve over 30 million clients. Our support will help the IFMR group of companies reach even more clients.
We continued developing our presence throughout China and Myanmar. In China, Accion partner Grassland Finance Ltd. grew to 16 branches across six provinces. Accion helped Chinese MFI management improve operations through the International Microfinance Management and Leadership Program; 79 participants from 31 financial service providers have developed their management and leadership capacity. In Myanmar, Accion partner DAWN tripled its loan portfolio and plans to adopt new technology to expand and improve client access.
Accion finalized a follow-on investment in Peru’s Credinka, which brings high-quality financial services to rural communities. In Bolivia, despite new financial regulations, Accion partner BancoSol’s performance exceeded expectations and was the only MFI in the country that did not reduce its number of borrowers in 2016.
There is an urgent need for greater access to higher-quality financial services in sub-Saharan Africa, where two-thirds of adults lack access to formal savings accounts. In Nigeria, Accion Microfinance Bank expanded to 49 branches across five states; its new agent network and mobile banking solution will reach additional clients.
The Center for Financial Inclusion at Accion (CFI) seeks a world in which people have financial tools that help them improve their lives. CFI both engaged and challenged the industry as well as protected and empowered clients through its insights, advocacy, and stakeholder engagement.
By advancing new concepts and investigating big unanswered questions, CFI’s research portfolio helped to move the industry forward. The CFI Fellows Program released work on emerging SMEs and how financial institutions can better support them; optimizing government-to-person transfer programs; and the technologies enabling mobile financial services. In collaboration with the Center for Financial Services Innovation, CFI began developing a global framework for financial health. CFI sponsored and helped develop methodology for the Global Microscope, an annual ranking on financial inclusion regulations; CFI also sponsored Banana Skins, a series of financial inclusion surveys.
CFI worked collaboratively with industry groups to tackle significant challenges. Together with the Institute of International Finance and the International Finance Corporation, CFI explored how mainstream financial institutions can best reach underserved populations with quality financial services. As host to the Financial Inclusion Equity Council, CFI convened equity and impact investors to examine issues such as initial public offerings, offshore incorporation strategies, and valuations. CFI also anchored the Microfinance CEO Working Group (MCWG), which continues to drive high standards in the delivery of responsible financial services. MCWG recently launched its Partnering for Collaborative Development program, convening in Uganda to advise the government on its financial inclusion strategy.
The Smart Campaign, a signature CFI initiative, works globally to create an environment in which financial services are delivered safely and responsibly to low-income clients. As the world’s first financial consumer protection standard, the Campaign continues to maintain its hallmark certification program, elevate the client voice, and effect change at the national level. To date, 83 financial institutions collectively serving more than 37 million clients have been certified for adherence to rigorous consumer protection standards. In 2016, the government of Myanmar adopted the Client Protection Principles into its national microfinance regulations.
The Smart Campaign pivoted toward sub-Saharan Africa and the fintech sector. In much of sub-Saharan Africa, client protection is urgently needed and sorely lacking. At the same time, digital financial services are sweeping through the continent, raising brand-new client protection issues. Over the next three years, the Campaign will increase operations in Benin, Ghana, Nigeria, Rwanda, and Uganda. With more than 45 million people in these five countries using financial services – often for the first time – the imperative to protect clients is clear.
The Africa Board Fellowship (ABF), a peer-learning and exchange program for CEOs and board members of sub-Saharan financial institutions, is creating the next generation of financial inclusion leaders on the continent. Nearly 100 fellows representing 34 financial institutions from 17 countries have completed the program, graduating with newfound understanding of governance, risk management, and disruptive technology, among other topics, as well as establishing a valuable network of like-minded peers. ABF graduates were also admitted to the Harvard Business School – Accion Program on Strategic Leadership in Inclusive Finance. Now in its 12th year, more than 800 financial inclusion leaders from almost 100 different countries have participated in the Harvard program. In March 2017, the CFI team delivered an ABF-like seminar in Amman, Jordan, to serve MFI leaders in the Middle East/North Africa region.
Every year, CFI takes one week to engage a broad range of stakeholders in a global conversation. In 2016, Financial Inclusion Week centered on the theme “Keeping clients first in a digital world,” during which 45 partners in 19 countries engaged over 1,200 participants through group gatherings and online events around the world.
Accion in the United States invests in small business owners because they are the main drivers of inclusive economic growth in their communities. It is imperative that mission-based lenders such as Accion continually improve the quality and reach of our services so that entrepreneurs may in turn multiply that impact through increased economic stability in their households, job creation in their neighborhoods, and service to their communities.
Since Accion began lending to small business owners in the United States in 1991, we have provided more than 60,000 loans totaling more than $500 million in capital to nearly 40,000 entrepreneurs across the country. In 2016 alone, Accion provided almost $40.25 million in capital to over 3,200 U.S. business owners and supported more than 20,000 entrepreneurs with personalized training and advising services.
Despite this impact, we know that each day thousands of entrepreneurs go without the financial services and business advice they need to reach their full potential. In 2016, Accion’s investments in innovation, made possible through generous funding, laid the foundation for Accion to serve tens of thousands more business owners with high-quality lending and advisory services. Accion collaborated with best-in-class technology partners – including Salesforce, Cloud Lending, and DemystData – and dozens of Accion employees across the country to prepare the first phase of this effort, launching in 2017.
What does a $500 million investment in entrepreneurs enable? It means that nearly 40,000 small business owners have been able to pursue a path to greater financial security and opportunity through entrepreneurship. According to the Association for Enterprise Opportunity, the median net worth of a business owner is over twice that of a non-business owner. Accion’s clients experience a 98 percent median increase in take-home income one year after receiving their loans. In 2016, Accion and fellow mission-based lender Opportunity Fund gained deeper insights into the importance of our services to the entrepreneurs we serve, including those impacts that cannot be captured through numbers alone. Preliminary findings from a multi-year impact study illustrated the diverse visions entrepreneurs have for their futures. We learned that for many entrepreneurs, the goal of economic security and family financial health was equal to, if not more important than, business growth. Many business owners said that our services’ greatest impact was their increased confidence that they could achieve their goals and improve their credit. As one Chicago entrepreneur said, “Accion gave me hope to keep my dreams and goals alive and to continue on creating and giving back.”
An investment in a small business owner is also an investment in local employment and economic growth. Approximately 62 percent of Accion client businesses have employees, and each of these businesses generates an average $71,470 in total yearly wages. In 2016 alone, Accion’s active borrowers paid approximately $252 million in wages across the country. Accion’s ongoing impact evaluation research revealed that Accion clients hire locally and tend to source inventory and equipment from other small businesses in their communities.
Professional gymnastics coach Lauren Petrick was motivated to create an inclusive athletics facility for children after volunteering to work with her boss’ family member. Word spread about her special needs classes and they grew into a small program. She pursued a Master’s in Psychology to better support athletes with special needs and set out to open her business, LEAP South FL . Early-stage businesses like Lauren’s often struggle to find capital from traditional sources, but Lauren was able to purchase the equipment she needed, including a trampoline and safety mats, through a loan from Accion. “It gave me faith that someone who wasn’t involved could see the potential in what we were doing, and it was that stepping stone we needed to get to where we are today,” said Lauren.
“When I come here it seems like home to me,” said one LEAP. “We are always positive and doing the best we can.”
“Athletics has been the way that I can get through to these kids,” said Lauren. “They have a place here. They love it. It’s a fun environment. Who doesn’t love to jump on a trampoline?”
Your support provides the funding that allows us to reach people in unserved and underserved regions around the globe.
Your contributions fund the research and development of product and process innovations that help bring needed financial tools to millions of hardworking women and men.
Your charitable gifts provide financial education and business training to clients so they can improve their businesses and lives.
Ultimately, your support means that millions of people around the world can be empowered to improve the lives of their family members, employees, and neighbors in critical ways – with better nutrition, regular schooling, or simply a roof that doesn’t leak.
For all this, we thank you, and we ask you to continue to help us to build a financially inclusive world with access to economic opportunity for all.
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