For years, the pioneers of microfinance have been leading the movement to expand access to finance. These organizations, mostly nonprofits or specialized financial institutions, embrace poverty alleviation and enterprise development at the core of their mission. Thanks to their success, private-sector players are now moving into the industry at an unprecedented pace, bringing with them enormous resources and potential for growth. With financial inclusion gaining this kind of momentum, we are on the brink of a new era in which economic opportunity for the poor will become more fully integrated into financial markets worldwide.
At this juncture, ACCION International has launched the Center for Financial Inclusion, a collaborative effort to advance the commercial model of microfinance while upholding the interests and needs of poor clients worldwide.
The Center works with a wide variety of actors – microfinance experts, banks, investors, regulators, technology firms, universities and others – to address challenges related to financial inclusion. Center staff collaborates with experts across industries – many of whom have not yet applied their strengths to microfinance or worked at the same table – to develop solutions that enhance the lives of the world’s poor. Research, events, and field-piloting focus on areas such as the double bottom line, microfinance investing, and product and process breakthroughs.
The Center’s goal is to connect the microfinance community with the major drivers of the global economy – e.g. capital markets and technology – and harness their capabilities to address the financial needs of poor people. By bringing these elements together, the Center for Financial Inclusion serves as a bridge between today’s microfinance and a future of economic opportunity for all.
MAJOR FOCUS AREAS
The Center for Financial Inclusion has identified three interrelated focus areas that will be supported by an integrated publications and outreach team.
Double Bottom Line. As microfinance widens to become inclusive finance, the importance of maintaining an emphasis on the social bottom line becomes central to the industry’s success. Double bottom line initiatives will address consumer protection, impact studies, and social performance monitoring so that the social mission of microfinance is kept front and center as it expands its reach.
Investing in Inclusive Finance. The Center is committed to ensuring that MFIs have the capital they need to reach scale and sustainability. The Center conducts assessments and training related to the transformation of NGOs into regulated financial institutions and the preparation needed by MFIs in order to accept debt and equity. For investors, the Center acts as a secretariat for the Council of Microfinance Equity Funds, a professional resource for managers of microfinance investment funds.
Client-Product Connection. The Center advances innovations in products and business processes that lower costs and bring new value to poor clients. It operates a small grant program to support cutting edge experiments and pursue its own projects in selected areas. Energy Links, a project in this area, is piloting a solar-powered lighting system that will be marketed as a "business in a bag" for microentrepreneurs in Africa, thereby spreading clean energy while creating self-sustaining income.
Publications and Outreach. The Center operates print and Web-based publications and dissemination activities in support of each program area. It also continues the highly successful HBS-ACCION Program on Strategic Leadership in Microfinance. With the help of a designated Faculty Advisory Council, the Center develops additional links to business and other professional degree programs.