AFRICA – Accion, a non-profit organization dedicated to enhancing financial access, has unveiled the Accion Digital Transformation Fund aimed at enabling conventional financial entities to better serve small businesses that are typically overlooked.
This US$152.5 million new fund is specifically tailored to assist microfinance institutions and similar entities across regions such as Africa, South and Southeast Asia, and Latin America.
The primary objective of this initiative is to close the divide between traditional financial service providers and small businesses that have yet to benefit from digital financial services fully.
The fund is particularly interested in investing in institutions that cater to micro, small, and medium-sized enterprises (MSMEs). It seeks to support conventional microfinance organizations, companies providing affordable housing solutions, and those evolving into full-service banking institutions.
Investment amounts are anticipated to fall between US$12 million and US$15 million, with additional financial backing from the fund’s limited partners, which include notable entities such as British International Investment (BII) and Mastercard.
Abhishek Agrawal, the Managing Partner at the Accion Digital Transformation Fund, expressed concern about the lack of financial services available to many, particularly those in remote areas.
He emphasized that the fund is designed to tackle two principal obstacles: fostering confidence in digital financial solutions among rural clientele and equipping legacy financial institutions with the necessary expertise and resources to reach out to these customers effectively.
This initiative represents a significant strategic pivot for Accion. In the past, the Accion Venture Lab focused on nurturing early-stage fintech startups.
In contrast, the new fund will channel investments directly into well-established financial institutions to hasten their digital transformation endeavors.
Agrawal elaborated on the fund’s mission, stating that the aim is to equip existing financial players with the technological tools necessary to expand their customer reach.
He pointed out that this strategy complements Accion’s ongoing support of fintech startups, thereby contributing to the creation of a more inclusive financial landscape.
The management of the Accion Digital Transformation Fund falls under the purview of Accion Impact Management, which is also responsible for the oversight of the Accion Venture Lab.
In addition to this new fund, Accion continues its support of growth-stage enterprises through Accion Emerge, which focuses on sectors such as embedded finance, agricultural technology, and innovations shaping the future of work.
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