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Fellow Exec Ed

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Today, after 18 years with Accion, including 11 as Managing Director of the Center for Financial Inclusion, I’m saying goodbye.

It’s hard to know where to begin to say farewell, but to start at the real beginning for me, I go back to a USAID conference 1986 when I heard Jeff Ashe, then one of Accion’s senior staff members, describe the dramatic success Accion was having with solidarity group lending to tricicleros in the Dominican Republic. He announced that Accion was reaching many hundreds, if not thousands (!) of clients, having them all pay their loans back (!!), and covering the costs of lending (!!!).

“There’s gotta be a catch,” I thought, as did others at the conference. “He’s a snake oil salesman. It’s too good to be true.” None of the small business loan programs I knew in the international development arena came anywhere close to those achievements. Actually, Jeff is an extremely persuasive salesman. But he was not inflating those results. Accion was onto something, and it grew from there.

I’ve been a fan of Accion ever since: for its social mission (to give people the tools to work their way out of poverty), its philosophy (marrying social purpose with private sector principles), its skill (both technical know-how and ability to make good decisions) and its <em>mistica</em> (the shared spirit that turns staff and supporters into a family of Accionistas). For over three decades I have watched Accion create breakthrough after breakthrough, and for the past two decades I have been fortunate enough to contribute to some of them.

That speech of Jeff’s was my first Accion-linked “Aha!” moment, but many others followed:
<ul>
 	<li>Maria Otero coming into my office at USAID in 1991, brimming with the exciting news that Accion’s affiliate in Bolivia, Prodem, was going to become a commercial bank. Imagine, an NGO could become BancoSol.</li>
 	<li>Sitting next to Senator Ted Kennedy at the White House while President Clinton presented former Accion CEO Bill Burrus with an award for its work in the U.S. In my excitement, I elbowed the Senator and told him that Accion’s home base was in Massachusetts. He received the news politely.</li>
 	<li>Waiting for an official in Abuja to petition for a license to open Accion Microfinance Bank Nigeria. After greeting us, the man stepped out. “Just a moment. I’ll be right back.” Six hours later, despite many assurances, he had not returned, and we left to catch our flight back to Lagos.</li>
 	<li>The investor meeting for the formation of Accion Investments, on the morning after an enormous snowstorm in Washington. The Europeans wore suits, ties and dress shoes. The American from IFC wore a sweatshirt and unlaced rubber boots.</li>
 	<li>A senior staff meeting in which the shocking realization began to dawn on us all that the Compartamos IPO could increase Accion’s balance sheet by as much as $45 million, turning a scrappy technical assistance provider and fledgling investor into a social impact investing powerhouse. We were elated to think we could receive $45 million. In the event, the IPO contributed over $300 million.</li>
 	<li>Meeting a ponytailed Brian Kuwik at the donut shop at Shoprite supermarket in Koomatiport, South Africa, and offering him a job.</li>
 	<li>Lighting a lamp to ceremonially launch our first India office in Bangalore.</li>
</ul>
Most of these memories represent “Aha!” moments when the possibilities came into focus for a bigger and bolder future for both Accion and the microfinance/financial inclusion movement. And in each case, the vision that these moments created became reality.

Accion took itself, its partners and the field where they didn’t know they could go: solidarity group lending, transforming NGOs into financial institutions, cracking the capital markets with guarantee and equity funds, breaking out of Latin America to become a global organization, and leading the way in fintech for the underserved. I have been lucky indeed to be along for that rollicking journey.
<h2>And then, CFI</h2>
CFI is part of a generous spirit that has been with Accion from the early days: the intent to share learning with and among the other participants in the sector. It is also part of Accion’s ambition to create a financially inclusive world, not just a financially inclusive project.

CFI began when the commercial model of microfinance had swept through the sector and the concept of financial inclusion was starting to emerge. With an increasing commercial and investor voices animating the sector, and with new players who had not shared in the microfinance experience, it became CFI’s role to hold the sector to the high standards implied by the social mission, and especially to urge it to do right by clients.

There have been “Aha!” moments for me at CFI, too, like listening to a veteran political campaign strategist talk and realizing that we could use similar campaign techniques to make a difference in protecting clients – resulting in the <a href="https://www.centerforfinancialinclusion.org/program_teams/the-smart-campaign">Smart Campaign</a>. Or realizing that the board members of microfinance institutions are highly important to the success of the sector but were woefully un-supported in their work – leading to the <a href="https://www.centerforfinancialinclusion.org/about/what-we-do/africa-board-fellowship-program">Africa Board Fellowship Program</a>. Or hearing Jennifer Tescher talk about financial health – and deciding to see how it could apply in the developing world. Or looking at the demographic data that our Credit Suisse global fellow showed us and realizing that aging is a fast-rising issue in some of our geographies, not just the OECD. Or calling for full financial inclusion in 2020 and hearing the World Bank take up the rallying cry.

In all these efforts, CFI has tried to speak the truths the sector needs to hear, in a constructive way. I am confident that, under the energetic <a href="https://www.centerforfinancialinclusion.org/q-a-with-mayada-el-zoghbi-cfis-new-managing-director">leadership of Mayada El-Zoghbi</a>, it will continue that tradition.

But as I clean out my files and transfer my electronic life, what’s on my mind most are the friends and colleagues I will no longer chat with in the kitchen or find waiting at the end of a long plane ride or the other end of a video call. I would love to give a shout out to each of you, including many CFI-ers and Accionistas from both the present and the past. I have mostly been a cheerleader urging you on while you did the work. I will miss you greatly, though I intend to stay in touch. Accion does have a mistica that ties past and present Accionistas together, and I hope it will keep nurturing that spirit as it pursues the new breakthroughs it is bound to discover.

A very fond goodbye, and <em>viva la mistica</em>!

Goodbye…and Viva Accion!

Senior research director Eric Noggle participates in a panel discussion at this summit dedicated to "Rising to the Good ID Challenge."

Event

<a href="/bio/eric-noggle">Eric Noggle</a> and <a href="/bio/tess-johnson">Tess Johnson</a> are participating in <a href="https://id2020.org/summit/2019-id2020-summit">ID2020 Summit 2019</a> along with stakeholders from across the digital ID ecosystem, including government leaders, technologists, civil society advocates and development organizations. Hosted by the ID2020 Alliance, this year's summit offers an opportunity to take stock of progress, evaluate our individual and collective roles in advancing good digital ID, and ensure alignment on key priorities.

Eric Noggle joins a panel entitled <em>Cities Driving Innovation in Good ID</em> alongside speakers from the Open Society Foundations and the cities of New York, NY and Austin, TX.

The ID2020 Alliance was launched in 2017 to accelerate access to user-centric, privacy-protecting and portable digital ID -- and to do so through sustained, transparent public-private partnership. This year's summit will include intimate, candid discussions on:
<ul>
 	<li>Taking stock of progress and failings towards user-centric, privacy- protecting and portable digital ID</li>
 	<li>The heightened urgency of our work, particularly when increased interest in closing the ID gap - through any means - may be outpacing the #GoodID movement</li>
 	<li>The roles for regulators, market-based approaches, and funders in protecting privacy and spurring the adoption of user-centric, privacy- protecting and portable digital ID. The route from #GoodID to widespread adoption of digital ID solutions that meet - or exceed - our standards for “good”?</li>
 	<li>Trends towards decentralization in national ID programs and cities as catalysts for “good” digital ID</li>
</ul>

ID2020 Summit 2019

Earlier this month, we announced that <a href="https://content.centerforfinancialinclusion.org/people/mayada-el-zoghbi/">Mayada El-Zoghbi</a> is joining us as the new Managing Director of the Center for Financial Inclusion at Accion (CFI). Mayada is known for her extensive research in – and advocacy for – financial inclusion. As CGAP’s Lead for Strategy, Research &amp; Development, she coordinated CGAP’s strategy development and its research on women’s financial inclusion, financial services in crisis environments, and other emerging topics.

Prior to CGAP, Mayada founded and managed a development consulting firm, led numerous technical assistance, evaluation, and research assignments, served as a research director for a USAID initiative, helped develop several financial institutions, and lectured at Columbia's School of International and Public Affairs (SIPA).
<h4>CFI: What sparked your passion for financial inclusion, and what continues to propel it as you assume your new role at CFI?</h4>
<strong>Mayada</strong>: After graduating from college, I went to Morocco on a research fellowship with a program called Minnesota Studies in International Development (MSID). I lived both with a family in Rabat and spent a month in a rural community doing survey work on a rural credit research project with a professor from the Agronomy Institute in Rabat. This experience piqued my interest in financial services.

The project in Morocco was clearly not good practice and I was interested to learn more about what works. I decided to go back to graduate school to learn more about it, so I studied at SIPA. It was during a course on microenterprise development, taught by Heather Clark, who was heading UNCDF at the time and who is now a dear friend, that I knew for sure that this was a field that combined all of my interests in business, financial services, and sustainable development. Most importantly, it aligned with my social values.

The inclusive finance field has expanded so much beyond my initial exposure to an agricultural loan program in rural Morocco. The many ways in which this sector continues to evolve and expand is what continues to draw me in. I’m especially excited by our ability to shape responsible growth of the industry, and the role that organizations like CFI have in guiding both public and private sector actors in inclusive finance.
<blockquote>I’m especially excited by our ability to shape responsible growth of the industry.</blockquote>
<h4><strong>CFI</strong>: Why did you choose to join CFI? What about CFI resonated with you?</h4>
<strong>Mayada</strong>: I’ve worked on inclusive finance from many angles: managing institutions in the field, supporting donors on their strategies, conducting research, providing technical assistance to providers and other stakeholders. All of these experiences have been rewarding, but perhaps the role that I’ve enjoyed the most is thought leadership. I’ve been fortunate to do that at CGAP for the past 10 years.

With its convening power, independence, and ability to influence the private sector, investors and the broader inclusive finance community, CFI is unique. Its position as an independent think tank with deep expertise in consumer protection and a strong advocacy platform representing people living in poverty makes it an extremely compelling platform for me personally. At a time when digital platforms represent transformative opportunities to serve the poor and present serious risks for those who are the least able to withstand those risks, there’s no denying that a laser focus on consumer protection has to be front and center. Ensuring that the digital economy evolves in a way that’s both inclusive and protective is critical, and I believe that CFI is well positioned to lead the industry in such a way as to make that a reality.

Q and A with Mayada El-Zoghbi, CFI’s New Managing Director

Press Release

<strong>Washington, DC, September 9, 2019</strong>—Global nonprofit Accion announced today that <a href="/bio/mayada-el-zoghbi">Mayada El-Zoghbi</a> has joined as new Managing Director of the Center for Financial Inclusion at Accion (CFI), an action-oriented think tank that develops insights, advocates on behalf of clients, and collaborates with stakeholders to achieve a comprehensive vision for financial inclusion.

“Throughout her career, Mayada has been at the forefront of the inclusive finance community,” CFI Advisory Council chair Paul Tregidgo said. “This alignment with the focus of the Center for Financial Inclusion at Accion, and her recent work on emerging topics in financial inclusion – like the relationship between financial services and well-being, and ways to extend financial services to the most excluded like women, youth and the forcibly displaced – uniquely position her to lead the Center into the future.”

“For more than a decade, CFI has played an important role, challenging and engaging the financial services industry to better serve, protect, and empower people around the world. I am pleased that Mayada El-Zoghbi has accepted to join as the new managing director. Her extensive experience in research and advocacy position her as the right leader to build on CFI’s strong foundation of innovative, industry-shaping work,” said Accion CEO and President Michael Schlein.

Mayada has been a leader in financial inclusion for some time. She comes to CFI from CGAP, a World Bank-based think tank, where she served as Lead for Strategy, Research &amp; Development, and previously managed CGAP’s work with the donor and investor community. From 2002 to 2009, Mayada founded and then managed a development consulting firm. She has also led numerous technical assistance, evaluation, and research assignments; served as a research director for a USAID initiative; and lectured at Columbia University's School of International and Public Affairs (SIPA). She started her career working with several nonprofit organizations establishing inclusive financial institutions in Bosnia and Herzegovina, Croatia, Kosovo, and the Palestinian Territories.

Mayada holds a master’s degree in international affairs from SIPA at Columbia University and a bachelor's degree in business from the University of Minnesota. A dual national of Egypt and the United States, she is fluent in English and Arabic.

In its first decade, the Center for Financial Inclusion at Accion established itself as a powerful advocate for the protection and empowerment of underserved clients. It established the world’s first global consumer protection campaign - the Smart Campaign - which has set standards for inclusive financial services that have now been adopted by 100 institutions serving over 40 million people around the world. Its other initiatives include executive leadership training opportunities like the Africa Board Fellowship Program and Harvard Business School-Accion Program on Strategic Leadership in Inclusive Finance; the Financial Inclusion Equity Council, a membership organization for equity investors in microfinance institutions; and extensive research on emerging issues related to financial inclusion.

<strong>###</strong>

<strong>About the Center for Financial Inclusion at Accion</strong>

The Center for Financial Inclusion at Accion (CFI) is an action-oriented think tank that engages and challenges the industry to better serve, protect, and empower clients. We develop insights, advocate on behalf of clients, and collaborate with stakeholders to achieve a comprehensive vision for financial inclusion. We are dedicated to enabling 3 billion people who are left out of – or poorly served by – the financial sector to improve their lives.
<a href="http://www.centerforfinancialinclusion.org/">www.centerforfinancialinclusion.org</a>
<a href="https://twitter.com/CFI_Accion">@CFI_Accion</a>

<strong>###</strong>

<strong>Media Contact</strong>

Center for Financial Inclusion at Accion
<a href="/bio/virginia-moore">Virginia Moore</a>
<a href="mailto:vmoore@accion.org">vmoore@accion.org</a>
+1 202.393.5113

Mayada El-Zoghbi Is the New Managing Director of the Center for Financial Inclusion at Accion

When I reflect on the future of financial inclusion, I find myself returning over and over to a basic question. What is the purpose of financial inclusion? Why are so many people around the world working towards it, and why do they believe that financial inclusion will contribute to a better world? What purpose have I been pursuing as leader of the Center for Financial Inclusion for the past decade?

This year, in choosing a theme for our 5th annual <a href="https://www.centerforfinancialinclusion.org/financial-inclusion-week-2019">Financial Inclusion Week</a>, CFI reflected this question attitude by selecting Financial Inclusion for What? as the theme. But we are not about to let that important question go unanswered. So, after posing it, the CFI staff came up with <a href="https://www.centerforfinancialinclusion.org/financial-inclusion-for-what">four answers</a> that will be explored during Financial Inclusion Week: financial inclusion for financial health, financial inclusion for equity, financial inclusion for sustainable development, and financial inclusion for the bottom line.

While each of these ideas is important and worthy of exploration, I’d like to talk here about just one of them: sustainable development. In my view, the time is right for the financial inclusion sector to focus smartly on this set of goals. Even more emphatically, if the financial inclusion sector does not embrace sustainable development, it will soon find that it has worked itself out of a job. That’s because the more basic financial inclusion challenges are well on their way to being solved.

In the last decade an amazing transformation has taken place in the ability of most people to move money around quickly and efficiently. Millions and millions have opened bank or mobile money accounts and gained the ability to receive income straight into an account and then use electronic means to buy things. Yes, there are gender gaps, poor country gaps and rural areas gaps. But these are rapidly closing.

When we can presume that basic financial infrastructure is available to everyone for routine payments and banking, the financial inclusion job will be done. Right? This is an accomplishment that everyone in the financial inclusion sector can be very proud of. Even if we are not quite there in 2019, the finish line is well in view. Put an enormous celebration emoji right here, and look for the next challenge.

With financial access infrastructure as a foundation, we can turn to assisting people to do what they care most about: to apply financial services toward problems in the real sector – the real world, where people earn a living, get educated, build a home, go to the doctor and much more. The Sustainable Development Goals offer a widely-accepted list of real sector challenges that financial services can help address, but I’d like to focus on a slightly narrower list that highlights the activities where financial services are critical: agriculture, small business, health, education, shelter, and environment. The financial inclusion world needs to begin developing solutions that contribute directly to these sectors.

Back in the 1970s, the World Bank, USAID and other global development organizations were highly real-sector oriented when they talked about financial services. They provided enormous lines of credit to agriculture, fisheries, small business, and the like. These lines of credit were channeled through government development banks, who pushed them out at subsidized interest rates. Because they were seen as cheap handouts from the government, they were diverted to elites, with dismal repayment records. The development banks required constant cash infusions, either from abroad or from government budgets. And meanwhile, regular banks could not develop profitable businesses in these sectors, being out-competed by the subsidized loans. Development organizations treated banks much like communist countries treated them: as the distribution arms of central planning. Their solvency wasn’t important – they were just an administrative function. This was a disaster – for the banks, for the low-income people who were intended beneficiaries, for the market economy and for the achievement of development objectives.

Fortunately, a band of rural finance enthusiasts at Ohio State University (and others with similar views) convinced the World Bank and USAID to turn off the money hydrants. How they did that is a saga unto itself. For our story, the important thing is that once the subsidized credit spigot was turned off, it left open space in the financial sector for the growth, first, of microfinance and then of financial inclusion. Starting in the 1980s, these movements focused their attention in the right place: building sound financial institutions that knew how to serve the poor and excluded. That institution- and model-building focus was exactly what was needed at the time, and, with a boost from technology innovation, the sector has been on an unbroken path for three decades that is taking us to full realization of basic financial inclusion goals.

But this focus has also meant a three-decade detour away from deep engagement with real sector challenges. We’re working on payments, not mortgages. We’re working on credit algorithms, not pensions. All are important, but our emphasis has been selective.

Now it’s time to come back to the real sector and see how individuals, with their newly acquired access to financial services, can better use those services to accomplish tasks like building a business, using clean energy, getting an education and staying healthy. We’re in a much better position do tackle these challenges today than in the 1970s, because inclusive financial systems exist. And, hopefully, because we won’t make the old mistakes.
<blockquote>It’s time to come back to the real sector and see how individuals can better use financial services to accomplish tasks like building a business, using clean energy, getting an education and staying healthy.</blockquote>
To take one example, financing for shelter is a potentially pathbreaking field of endeavor for those concerned with financial services for the poor. Everyone needs a safe and comfortable place to live. But with a few exceptions, shelter has not played a role in the financial inclusion conversation for the past decade. To seriously support the acquisition or upgrading of housing, we need innovations. We already know that the thirty-year mortgage is not the answer for most low-income people around the world, but how can we promote the spread of the two-year home improvement loan that has shown promise in many areas? What models combine new financial products with new forms of construction, or land titling?

To develop innovations that work, financial inclusion and housing experts will have to join together in a multi-disciplinary way, and they will have to draw on the advances available through technology. A handful of organizations do combine housing and financial expertise to solve shelter problems, but many more are needed. Financial inclusion experts need to learn about construction, while shelter experts need to be open to financing methods other than scaled back mortgages. Partnerships are needed to solve barriers such as out-of-date building codes and access to water and sanitation. These challenges are often far beyond the usual concerns of banks and financial institutions, and unsolved, they can impede the development of financing solutions by making it hard to lend or by making housing unaffordable.

Similarly, in order to offer financial services that support health care, financial inclusion experts must learn more about how health care works and what it costs, while the health care experts must be willing to explore models other than public sector hospitals and clinics. And I could say the same about agriculture, energy, environment and education.

Why haven’t financial inclusion specialists already moved into sustainable development in a big way? I can think of three very good reasons.

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Elisabeth Rhyne

Elisabeth Rhyne is retiring. On this occasion, she reflects on “Aha!” moments that revealed the future for Accion and CFI.

Tess Johnson

Eric Noggle

Mayada El-Zoghbi

Ezra Mannix

<h4>CFI: How do you define and measure successful leadership of a social impact organization?</h4>
<p><strong>Mayada</strong>: There are many different ways to define leadership. For me, it’s the ability to bring others along, to inspire trust, and to demonstrate by example. People who work for a social impact organization also want a leader who has passion for its cause, a vision that’s inspirational, and values and behaviors that align with the organization’s social mission. As a leader, you measure your effectiveness by your ability to inspire and mobilize others.</p>
<h4>CFI<em>: </em>What do you consider our sector’s most pressing need?</h4>
<p><strong>Mayada</strong>: As a community we have been overly focused on driving access to basic accounts and improving the business model economics so that providers can make money serving the poor. Of course, technology is what’s enabled all this to happen. But perhaps we’ve lost sight of the purpose and we’ve forgotten that development is also very much about people. Technology is just a tool!</p>
<p>The community has much more work to do if we are to understand or drive improved well-being for poor people. This is why we still have people perplexed that uptake continues to be low and usage of formal financial services continues to lag behind expectations.</p>
<p>Undeniably, providers need an incentive to serve excluded segments; but what’s good for customers is also good for business. Also, we need to move out of our “Washington consensus” mindset that commercial models are the only models that are worth exploring. Fortunately, we’re increasingly seeing some change: renewed focus on public-private partnerships, blended finance solutions, and funding structures that enable experimentation and even some tolerance for failures. There’s no question in my mind that the role of the state in shaping an economy, by defining incentives and disincentives through regulations and policies, is as important as the providers that operate in it.</p>
<h4>CFI: What topics are of greatest interest to you?</h4>
<p><strong>Mayada:</strong> I’m most interested in big, structural-level solutions. I don’t believe we can get the transformational changes we’re looking for by continuing to only focus on micro-level or niche interventions. While at CGAP, I pushed for greater use of using systems thinking for solving remaining barriers in inclusive finance. This approach, by definition, means there’s no one-size-fits-all solution, and that we must understand and diagnose each market, each client segment, and each opportunity within their broader contexts. For the women’s segment, for example, we were beginning to diagnose and eventually move into experiments that could address norms barriers that are often at the heart of the technological and financial divide between men and women. I’d love to see much more work on this issue extended to other important excluded segments, like youth and the rural poor.</p>
<p>For many important groups in society, like women and youth, I see a big opportunity to explore approaches to help them adapt to the digital economy. How can we embed protections in e-commerce and other social platforms that enable poor people to take risks and make investments that enable them to improve their well-being? How do we help these groups adapt their livelihoods and their skill sets in this period of massive environmental, social and technological changes? These issues need to be our focus. We need to shape how the new normal unfolds and not wait until vested interests shape it for us.</p>
<h4>CFI: You worked on updating CGAP’s financial inclusion <a href="https://www.cgap.org/research/publication/emerging-evidence-financial-inclusion">impact narrative</a>. Tell us why you started on this topic, what you learned, and how you might bring your takeaways to CFI.</h4>
<p><strong>Mayada</strong>: Financial services for the poor have been too heavily invested in access without a clear understanding of whether that access is beneficial for poor people. We often get so excited by an idea, yet we discover much later that it may not hold its intended promise for people living in poverty. The work on updating the impact narrative tries to bring evidence to the equation. It’s building a new narrative that’s both realistic and built on what we know can have impact on the lives of the poor.</p>
<p>The rationale for this work was that many stakeholders – including a large number of bilateral and multilateral donors – could no longer justify dedicated programming focused on financial services for the poor because they were unable to demonstrate its effectiveness. The SDGs identify many other pressing goals and we were seeing that donors were shifting their focus more directly to these goals, such as jobs, climate, and gender equality.</p>
<p>Those of us in the inclusive finance community perhaps take it for granted that financial services are a backbone to any economy. So, we naturally supported this shift for our sector from a leading role to a supportive function. But we must do more to clarify and advocate how financial services are still instrumental to get the real economy to function better and more efficiently. We must continue to remind policy makers and other decision makers that development or economic growth that is not inclusive of all segments of society is not a future that anyone of us wants.</p>
<blockquote><p>We must do more to clarify and advocate how financial services are still instrumental to get the real economy to function better and more efficiently.</p></blockquote>
<p>Financial services are a backbone in any economy; they enable companies to invest and in turn create jobs, they facilitate transactions, they make a government more efficient. Responsible, protective and well-designed financial services ensure that the future economy is for everyone and not just the few.</p>


The incoming leader talks about her passion for financial inclusion, the role of digital, and more.

<p>First, it takes concerted effort to learn enough about the real sector to create innovative ideas. It’s easy to say, “I’m a financial services person. Let the agronomist or the public health specialist worry about the non-financial stuff.” That won’t cut it, however. In fact, the agronomist and the public health specialist often resort to a similar excuse on their side. I have seen too many financial services overtures rebuffed by a real sector person who just wants to see the money flow to the beneficiaries they love – in effect taking a 1970s view of finance. With understanding and partnerships across disciplines, such attitudes will change.</p>


<p>Another reason for the gap is the difficulty for governments and financial institutions to develop effective public-private partnerships. For example, if a bank wants to support pensions for people in the informal sector, it may decide that linking them to the government pension scheme is the best solution, but then may find it difficult to connect with the pension overseers who are bureaucratic and occupied with other challenges – like keeping the pension system solvent. CFI Fellow Larry Reed is <a href="https://www.centerforfinancialinclusion.org/searching-for-positive-deviants">exploring relationships</a> between governments and banks to see whether government-to-person payments can provide a path to financial inclusion. Chief stumbling block he’s found? The government procurement process. Similar issues come up in the health arena.</p>


<p>Possibly the biggest reason for the gap is the pressure for business models that feature scale, profitability, even when they are trying to reach lower income segments. It takes experimentation to develop sustainable business models for the previously excluded, and even if they start with a great idea and gifted entrepreneur, the initial models may not fulfill expectations. Room to experiment is needed. Unfortunately, with the now-dominant impact investing paradigm, this room is rarely available. Start-ups face immense pressure to break even and scale quickly. By contrast, when microfinance came along, it was given lots of room to experiment. Subsidies were offered to support the microfinance programs while they still had low scale and profitability expectations. As business models were perfected, subsidies decreased and then disappeared. Today, when a new start-up faces pressure to reach profitability and scale early on, one option is to go forward with whatever minimum viable product is at hand. Another is to pivot to a less developmental market segment. Neither of these is a good way to solve previously unsolved problems.</p>


<p>Many start-up companies are engaging with the real sector in innovative ways. Small business finance is full of innovators right now. The entire <a href="https://www.wri.org/blog/2017/02/pay-you-go-solar-could-electrify-rural-africa">PayGo movement</a> that helps finance solar home systems is another clear example. <a href="https://www.accion.org/how-can-we-bring-insurance-to-those-who-need-it-most">Agricultural insurance</a> is seeing many innovations – like the insurance products offered by Pula, an Accion Venture Lab investee company, which are sold through chips embedded in seed bags. Water.org <a href="https://water.org/about-us/our-work/watercredit/">provides credit</a> for families to hook up to whatever form of water or sanitation is available to them. I would love to see many more such ideas take off.</p>
<p>We have built a financial sector that extends its reach to people of all levels, all over the globe. As we celebrate it, let’s also recognize that this enormous accomplishment lays the foundation for using financial services to solve real sector problems. The types of engagement I am proposing will not be easy, but they are necessary, and, ultimately, that is what financial inclusion is for. As it looks to its next activities, with new leadership, I hope the Center for Financial Inclusion at Accion will take up this challenge in a big way.</p>


As Elisabeth Rhyne prepares to step down as Managing Director of the Center for Financial Inclusion, she challenges the financial inclusion field to get its hands dirty in the real sector.

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CFI Research Fellows Program

Africa Board Fellowship Program

Industry Engagement

Financial Inclusion Equity Council

Financial Health Community

Partnership for Responsible Financial Inclusion

Fintech Protects Community of Practice

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