Accion is an international nonprofit.[1] Founded as a community development initiative serving the poor in Venezuela, it works with local partners in different countries to develop and scale digital financial solutions for underserved people globally.[2]
In 2009 and 2010, Accion helped to start microfinance institutions in underserved areas of Inner Mongolia, Cameroon, and Brazil.
In December 2009, Accion inaugurated Accion Microfinance China (AMC) in Chifeng Prefecture, Inner Mongolia; this microfinance institution represented the first wholly owned foreign microcredit company (MCC) and only the second wholly foreign-owned MCC in the country. Since then, Accion has transitioned ownership of AMC to Grassland Finance Ltd., a Hong Kong holding company incorporated in 2011 with a focus on founding or investing in financial services institutions in China that provide loans and other financial services to China's vast number of medium, small, and micro enterprises (MSMEs). Today, grassland has grown to more than 15 branches across six provinces.[4]
In April 2012, Accion launched its seed-stage investment initiative, Accion Venture Lab. Venture Lab invests capital in, and provides support to innovative fintech start-ups that increase access to, improve the quality of, or reduce the cost of financial services for the underserved at scale. Since launching, Accion Venture Lab has deployed over $12 million across more than 30 start-ups that work in over 20 countries worldwide.[5][6]
Accion expanded its work to yet another country in April 2015 when it partnered with Myanmar's DAWN, a microfinance institution originally launched in 2002 as a program of Save the Children. After decades of isolation beginning in the 1960s, Myanmar rejoined the world economy with a need for affordable services. Accion has helped DAWN integrate new technologies, triple its loan portfolio, and expand to more branches.[7]
In November 2016, Accion announced an updated organizational strategy reflecting Accion's increasing focus on the potential for financial technology, or "fintech," to reach the world's three billion financially underserved people. See details on Accion's strategy below.[8]
In March 2017, Accion announced the launch of a global fintech fund for the underserved: the Accion Frontier Inclusion Fund, managed by Quona Capital.[9] The fund aims to help the world's three billion financially underserved people by catalyzing fintech innovations that can radically improve the quality and availability of financial services for the underserved. At its launch, the fund represented over $141 million in commitments from an array of institutional investors. Accion is the fund's sponsor and anchor investor; the fund's manager, Quona Capital, is an early-growth-stage venture firm focused on financial technology for underserved consumers and businesses in emerging markets.[10] Investments include NeoGrowth,[11] Yoco,[12] Konfio,[13] and First Circle.[14]
2000s
In October 2000, Accion began working in partnership with microlending organizations in sub-Saharan Africa, marking its first initiative outside the Americas. Recognizing the need for microcredit throughout Africa, Accion worked to increase financial inclusion for poor, self-employed Africans throughout the continent. In 2006, Accion launched a partnership with Ecobank, the leading regional bank in West Africa. Pan-African Savings and Loans (then called EB-Accion Savings and Loans) launched operations in Ghana in 2007 and is expanding to neighboring countries.[15]
In 2005, Accion started a new venture to reach another underserved group: urban small business owners in India. Since establishing an office in the country, Accion has partnered with local financial institutions in Patna and Mumbai, assisting them in applying individual and group lending and tailored credit scoring, among other microfinance methodologies.
In 2007, Compartamos Banco, a Mexican microfinance institution and Accion investee, became the first Latin American MFI to offer equity through an initial public offering (IPO). The IPO sparked an industry-wide debate, with some "questioning the ethics of profit[ing] from the poor" and others arguing that "the profit motive can help lift many more people out of poverty than charity alone could ever do."[16] Álvaro Rodríguez Arregui, chairman of Accion at the time, was among the latter and argued that the IPO was needed to attract much more capital to the microfinance industry, and Accion used the funds to advance its mission. Today, Compartamos stands out as one of the largest MFIs, in terms of the number of clients, in Latin America.[17]
The proceeds from the IPO allowed Accion to create new MFIs in Brazil, Cameroon, China, Ghana, and India and strengthen, through investment or reinvestment, other partners in India, Africa, and Latin America. Accion also used the proceeds to establish and fund its Washington, D.C.-based think tank, the Center for Financial Inclusion (CFI) at Accion.
Center for Financial Inclusion at Accion
CFI's work is grouped into three broad categories:
Client Advocacy
Examples of CFI's industry-wide initiatives include the Smart Campaign, the world's first global consumer protection campaign, and Financial Inclusion 2020, a movement that mobilized stakeholders around the globe to achieve full financial inclusion, using the year 2020 as a focal point for action.[18]
1990s
In 1991 Accion brought its microlending model to the United States by piloting a program in Brooklyn, New York. Accion aimed to help those who didn't meet requirements for traditional financing (such as bank loans) because their requested amount was too small or because they had limited or damaged credit.
Accion has since worked to further adapt its lending model to the social and economic needs of communities across the United States. Accion now serves small businesses nationwide through four independent community development financial institutions (CDFIs) and a national office that invests in shared knowledge, innovation, and impact to benefit the entire network.[19]
Since 1991, the members of Accion in the U.S. have provided more than 60,000 loans to small business owners and disbursed more than $500 million in capital. Additionally, Accion provides business advising and training services—both in person and through online educational resources—to tens of thousands of entrepreneurs each year.[20][21]
In 1995, Accion created an equity investment vehicle for microfinance, the Accion Gateway Fund, to provide new microfinance institutions with the resources they needed to expand.[22][23]
1980s
Over the next decade, Accion helped start microfinance programs in 14 countries in Latin America. Accion and its partners developed a lending method that met the needs of microenterprises.
The ability to cover costs, augmented by Accion's new loan guarantee fund, the Bridge Fund, enabled Accion's partners to connect with the local banking sector and dramatically increase the number of microentrepreneurs they reached.[24] Between 1989 and 1995, Accion's Latin American networked loan disbursements multiplied more than 20 times.
Convinced that microfinance had the potential to transform the economic landscape of Latin America, Accion recognized that microfinance institutions (MFIs) would need access to a much larger pool of capital.
To help them achieve this, Accion helped create BancoSol, the first commercial bank in the world dedicated solely to microenterprise. Founded in Bolivia in 1992, its clients are typically market vendors, sandal makers, and seamstresses.
In 1994, Accion helped BancoSol sell certificates of deposit in the U.S. financial market.
1970s
By the early 1970s, Accion began to focus on addressing a major cause of poverty in Latin American cities: lack of economic opportunity.
In 1973, Accion staff in Recife, Brazil, began to focus their efforts on helping informal businesses. An Accion organization in Recife called UNO coined the term "microenterprise" and began issuing small loans, pioneering the field of microcredit.
Blatchford's founding of Accion was heavily influenced by the philosophical works of Alexis de Tocqueville, Aldous Huxley and Mohandas Gandhi as well as The Ugly American by UC Berkeley professor Eugene Burdick and the classic essay “The Moral Equivalent of War” by William James. Working from James’ main thesis, Blatchford believed that Americans needed to find new, non-militaristic ways to focus their involvement abroad while promoting self-determination and democracy. A volunteer corps dedicated to international cooperation and grassroots development was one such path.
Blatchford recruited two other standout UC Berkeley law students, Jerry Brady and Gary Glenn, to manage volunteer recruitment, publicity, and the stateside orientation of volunteers while he continued to cultivate contacts in Latin America.
In the summer of 1961, the first group of 30 Americans was ready to deploy to poor barrios in urban centers around Venezuela.
The nature of Accion's first projects reflected needs that the communities themselves identified as priorities. The Accion workers did everything from digging ditches to building schools to fundraising to managing sensitive negotiations between opposing community leaders. About the range of these early projects, Blatchford reflected, “The project depended on what the community was concerned about. Then the community did it; they created committees and were in charge of the project. They realized they could do it and it changed their lives.”[25]
By the mid-1960s, Accion was engaging fewer and fewer North Americans and Europeans and instead was hiring college-educated Venezuelans as organizers—a group called “Community Action Organizers.”
A few years after launching in Venezuela, Accion established itself in New York to provide technical support to funders and business leaders in Latin American countries who wanted to start community action programs like Accion did in Venezuela.[27]
Accion has been included ImpactAssets 50 (IA 50) for six consecutive years. IA 50 is the only free, public, searchable database of outstanding impact investing fund managers.
Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady employment, and a verifiable credit history. It is designed to support entrepreneurship and alleviate poverty. Many recipients are illiterate, and therefore unable to complete paperwork required to get conventional loans. As of 2009 an estimated 74 million people held microloans that totaled US$38 billion. Grameen Bank reports that repayment success rates are between 95 and 98 percent. The first economist who had invented the idea of micro loans was Jonathan Swift in the 1720’s. Microcredit is part of microfinance, which provides a wider range of financial services, especially savings accounts, to the poor. Modern microcredit is generally considered to have originated with the Grameen Bank founded in Bangladesh in 1983. Many traditional banks subsequently introduced microcredit despite initial misgivings. The United Nations declared 2005 the International Year of Microcredit. As of 2012, microcredit is widely used in developing countries and is presented as having "enormous potential as a tool for poverty alleviation." Microcredit is a tool that can possibly be helpful to reduce feminization of poverty in developing countries.
Microfinance is a of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings and checking accounts; microinsurance; and payment systems, among other services. Microfinance services are designed to reach excluded customers, usually poorer population segments, possibly socially marginalized, or geographically more isolated, and to help them become self-sufficient. ID Ghana is an example of a microfinance institution.
A community development financial institution (US) or community development finance institution (UK) - abbreviated in both cases to CDFI - is a financial institution that provides credit and financial services to underserved markets and populations, primarily in the USA but also in the UK. A CDFI may be a community development bank, a community development credit union (CDCU), a community development loan fund (CDLF), a community development venture capital fund (CDVC), a microenterprise development loan fund, or a community development corporation.
A micro-enterprise is generally defined as a small business employing nine people or fewer, and having a balance sheet or turnover less than a certain amount. The terms microenterprise and microbusiness have the same meaning, though traditionally when referring to a small business financed by microcredit the term microenterprise is often used. Similarly, when referring to a small, usually legal business that is not financed by microcredit, the term microbusiness is often used. Internationally, most microenterprises are family businesses employing one or two persons. Most microenterprise owners are primarily interested in earning a living to support themselves and their families. They only grow the business when something in their lives changes and they need to generate a larger income. According to information found on the Census.gov website, microenterprises make up 95% of the 28 million US companies tracked by the census.
Opportunity International is a 501(c)(3) nonprofit organization chartered in the United States. Through a network of 47 program and support partners, Opportunity International provides small business loans, savings, insurance and training to more than 14 million people in the developing world. It has clients in more than 20 countries and works with fundraising partners in the United States, Australia, Canada, Germany, Switzerland, Singapore, Hong Kong and the United Kingdom. Opportunity International has 501(c)(3) status as a tax-exempt charitable organization in the United States under the US Internal Revenue Code.
Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the jurisdiction of Ministry of Finance, Government of India headquartered at Lucknow and having its offices all over the country.The SIDBI was established on April 2, 1990, by Government of India, as a wholly owned subsidiary of IDBI Bank. It was delinked from IDBI w.e.f. March 27, 2000. Its purpose is to provide refinance facilities to banks and financial institutions and engage in term lending and working capital finance to industries, and serves as the principal financial institution in the Micro, Small and Medium Enterprises (MSME) sector. SIDBI also coordinates the functions of institutions engaged in similar activities. It was established in 1990, through an Act of Parliament.
Kiva Microfunds is a 501(c)(3) non-profit organization headquartered in San Francisco, California. Kiva's mission is "to expand financial access to help underserved communities thrive."
Bharat Financial Inclusion Limited or BFIL is a banking & finance company (NBFC), licensed by the Reserve Bank of India. It was founded in 1997 by Vikram Akula, who served as its executive chair until working. The company's mission is to provide financial services to the poor under the premise that providing financial service to poor borrowers helps to alleviate poverty. In 2011, the company operated across 11 Indian states.
Financial inclusion is the availability and equality of opportunities to access financial services. It refers to processes by which individuals and businesses can access appropriate, affordable, and timely financial products and services - which include banking, loan, equity, and insurance products. It provides paths to enhance inclusiveness in economic growth by enabling the unbanked population to access the means for savings, investment, and insurance towards improving household income and reducing income inequality
The Microcredit Summit Campaign, an American non-profit organization, started as an effort to bring together microcredit practitioners, advocates, educational institutions, donor agencies, international financial institutions, non-governmental organizations and others involved with microcredit around the goal of alleviating world poverty through microfinance.
Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund business, but does not include any institution whose principal business is that of agriculture, industrial activity, purchase or sale of any goods or providing any services and sale/purchase/construction of immovable property.
Microcredit Regulatory Authority (MRA) is the central body to monitor and supervise microfinance operations of non-governmental organizations of the Republic of Bangladesh. It was created by the Government of People's Republic of Bangladesh under the Microcredit Regulatory Authority Act. License from the Authority is mandatory to operate microfinance operation in Bangladesh as an NGO.
Microfinance Information Exchange, Inc. was a non-profit organization that provided market data and intelligence on financial service providers catering to low-income populations around the world. Founded by the Consultative Group to Assist the Poor (CGAP) and sponsored by the Citi Foundation, CGAP, the Mastercard Foundation, MetLife Foundation, Bill & Melinda Gates Foundation and others, MIX had offices in Washington DC, New York, Lima (Peru), Baku (Azerbaijan), Dakar (Senegal), and Hyderabad (India). MIX's mission was to provide data analytics to empower decision-makers - socially responsible investors, policy makers and financial services providers - to build an inclusive financial services ecosystem. Since its founding in 2002, MIX had built the digital information infrastructure needed to bring greater transparency to financial sectors serving low-income populations in emerging markets, including providing market data on over 3,000 financial services providers (FSPs). In 2016, MIX shifted its strategy to help improve the information flow in other segments of financial inclusion, like smallholder agricultural finance, fintech, digital financial services (DFS) and green energy finance. In May 2020, MIX became a unit of the Center for Financial Inclusion, a thinktank housed at Accion.
Women's World Banking is a global nonprofit organization dedicated to women's economic empowerment through financial inclusion.
Hattha Bank (HKL) is a Cambodian bank and microfinance institution in Cambodia.
The impact of microcredit is the study of microcredit and its impact on poverty reduction which is a subject of much controversy. Proponents state that it reduces poverty through higher employment and higher incomes. This is expected to lead to improved nutrition and improved education of the borrowers' children. Some argue that microcredit empowers women. In the US and Canada, it is argued that microcredit helps recipients to graduate from welfare programs. Critics say that microcredit has not increased incomes, but has driven poor households into a debt trap, in some cases even leading to suicide. They add that the money from loans is often used for durable consumer goods or consumption instead of being used for productive investments, that it fails to empower women, and that it has not improved health or education.
StreetShares, Inc. is a financial technology company and small business funding marketplace based outside of Washington, D.C.
An interest rate ceiling is a regulatory measure that prevents banks or other financial institutions from charging more than a certain level of interest.
Kashf Foundation is a non-profit organization, founded by Roshaneh Zafar in 1996. Kashf is regarded as the first microfinance institution (MFI) of Pakistan that uses village banking methodology in microcredit to alleviate poverty by providing affordable financial and non-financial services to low income households - particularly for women, to build their capacity and enhance their economic role. With headquarters in Lahore, Punjab, Kashf have regional offices in five major cities and over 200 branches across Pakistan.
VFS Capital Limited formerly known as Village Financial Services Ltd (VFS), is headquartered in Kolkata, was incorporated on 28 June 1994, as a private limited company before it got its present name.
↑ Fracassi, Cesare; Garmaise, Mark J.; Kogan, Shimon; Natividad, Gabriel (February 2016). "Business Microloans for U.S. Subprime Borrowers". Journal of Financial and Quantitative Analysis. 51 (1): 55–83. doi:10.1017/S0022109016000144. ISSN0022-1090.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
