2014 Annual Report

Global financial inclusion is a daunting issue. Around the world, billions of people lack access to formal financial services – and their lives are much harder because of it.

People outside formal financial systems use cash, which can be stolen or lost, to make every transaction. They lack a safe place to save. They have no credit history and must often turn to predatory loan sharks to make ends meet. They almost never have insurance, living one illness, injury, or natural disaster away from ruin.

For most of us, that sort of life would be unimaginable. But billions of the world’s most vulnerable people struggle in those very conditions.

Despite the scope of the problem, we are making demonstrable progress. In April, the World Bank announced that from 2011 to 2014, the number of financially excluded adults – those without access to a bank account – dropped from 2.5 billion to 2 billion. In fact, taking total population growth into account, 700 million more people gained access to an account in that time.

That is encouraging progress, but it’s only an important first step. Access to a bank account is not the same thing as financial inclusion – worldwide account usage remains stagnant, and there is a vast array of additional financial services that those very people lack and deserve. We still have a great deal of work to do refining that access into something more complex, productive, and impactful: full
financial inclusion.

The work that we are undertaking today will help us reach those remaining individuals. For instance, we’re building the next generation of top-tier microfinance institutions in Latin America, Africa, Asia, and the United States. Our recent investment in Myanmar’s Dawn Microfinance will extend financial services to one of the final frontiers of development.

Likewise, our venture capital investments assist early- and seed-stage startup businesses in bringing disruptive new financial services and products to the base of the pyramid. In the following pages, we explore how recent investments we’ve made through Frontier Investments Group and Venture Lab help the poor save, build credit, and plan for the future.

As increasing numbers of people gain access to financial services, we’re also working to ensure that the industry itself values and respects those clients. Industry-wide challenges require industry-wide solutions, which is why Accion’s Center for Financial Inclusion continues to convene and coordinate with a broad range of stakeholders on how to foster global financial inclusion.

The Center’s progress is significant: microfinance institutions that have achieved Smart Campaign certification, which recognizes adherence to consumer-protection principles including transparency, pricing, and fair treatment, now serve more than 20 million clients worldwide and continues to grow.

The Center is also expanding promotion of sound governance in sub-Saharan Africa, where our new Africa Board Fellowship program will train board members and CEOs in risk management, navigating competitive markets, and advancing social performance. Launched in partnership with the MasterCard Foundation, the program will promote the growth and sustainability of microfinance institutions in a region with more than 6.6 million microfinance clients.

Addressing an issue as complex and difficult as financial inclusion requires sound leadership and organization – traits that Charity Navigator recognized when, in 2014, it awarded Accion its four-star ranking for fiscal management, accountability, and transparency.

As we consider our next steps, we draw inspiration from the people we serve – the individuals who overcome monumental challenges every day with courage, humor, and dignity. It is their struggles and their achievements that motivate us to create a financially inclusive world.

Thank you for your continued support.

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