Accion has been a leader in financial inclusion for over 60 years, supporting innovative and impactful financial service providers that reach underserved microentrepreneurs and individuals in emerging markets. At the heart of this mission, Accion Emerge, formerly known as Accion Global Investments, has founded and invested in some of the world’s leading microfinance institutions and financial service providers, including BancoSol in Bolivia and Dvara KGFS in India.

Accion Emerge leverages Accion’s balance sheet to invest in financial service providers, giving us license to make experimental investments in companies that embrace innovation to unlock opportunities for underserved people. This approach allows us to refine our investment and advising strategy as we explore new sectors. By applying the lessons learned through these investments, Accion aims to scale up our services and reach more people with responsible financial tools. Accion Emerge’s approach complements Accion’s other investment strategies, including Accion Venture Lab, a leading early-stage investor in inclusive fintech, and Accion Transformation Capital, which provides growth capital and strategic support for the digital transformation of financial institutions.

As the world grapples with complex challenges and societal shifts, including digitization, climate change, and changing labor markets, the Accion Emerge team has adapted our investing thesis in response to changes in the ecosystem and changing pain points for low-income people and underserved small businesses. We will focus on investing in companies that operate across three key themes that we believe are critical for the future of financial inclusion: micro, small, and medium enterprise embedded finance, agricultural technology finance (agritech), and future of work finance. Accion Emerge leverages Accion’s global network, expertise, and reputation to invest in early-to-growth-stage companies using technology to address the pain points of underserved people and explore impact opportunities under these three themes.

MSME embedded finance

Micro, small, and medium enterprises (MSMEs) are the engines of economic growth and job creation in emerging markets, accounting for more than 90 percent of businesses and 50 percent of employment, according to the World Bank. However, MSMEs face significant challenges in accessing and managing financial services, such as credit, payments, insurance, and savings, that can help small business owners strengthen and grow their businesses.

Through MSME embedded finance, MSMEs can gain access to responsible financial services through platforms that are not primarily financial service providers, such as e-commerce and B2B marketplaces, supply chain management, accounting, and inventory management. For example, a small fabric manufacturer could use an embedded finance platform to sell their products, manage back-end accounting, and secure working capital loans bundled with discounted property insurance, all through the same platform. MSME embedded finance can help MSMEs access appropriate and timely financial services, increase their efficiency and profitability, and enhance their digital capabilities and competitiveness.

Agritech finance

Agriculture is the backbone of many emerging economies, providing income and food security for millions of smallholder farmers and their families while employing roughly 27 percent of the global workforce (over 870 million people). However, farmers and small agriculture businesses face numerous challenges: lack of market access to buy and sell crops, lack of reliable access to information and advising, high costs of inputs and equipment, climate risks and seasonality, and limited access to formal financial services.

Smallholder farmers and small agribusinesses are often considered too difficult to reach geographically and too risky for financial providers to serve. The agriculture sector is often overlooked in the investment space for these same reasons. Through agritech finance, tailored technology — combined with human touch — provides or enables financial services for farmers and other actors across the agricultural value chain, such as input suppliers, buyers, processors, and distributors. For example, agritech companies can allow a remote agri-processor to secure processing orders through their platform, help the processor procure raw materials from local farmers using a loan provided by the company, receive order-specific processing guidance from the technical staff of the platform, and ultimately hand over the processed foods to the delivery driver arranged by the platform. Agritech finance can help smallholder farmers and agribusiness owners improve their income, resilience, and livelihoods while contributing to food security, environmental sustainability, and rural development.

Future of work finance

It’s easy to see how the nature of “work” has evolved over the past decade. Through a smartphone app, one worker can perform multiple jobs in a single day—and technology is rapidly democratizing access to training and other job opportunities. Workers in the evolving employment landscape, including gig workers, freelancers, and online sellers need responsible financial tools that create stability and promote healthy financial habits. Tailored financial products can meet the unique needs of these workers, helping them to access and manage income streams, build skills and capabilities, access productive assets, and cope with economic shocks and uncertainties.

Accion Emerge is excited to explore the potential of the MSME embedded finance, agritech, and future of work sectors to create more inclusive and resilient livelihoods for millions of low-income people around the world. We are eager to partner with innovative companies that are building impactful and scalable products and platforms catering to the diverse and evolving needs of these financially underserved individuals.

As we pursue these new investment areas, we remain committed to supporting our existing portfolio companies and advancing our shared commitment to economic empowerment across the globe. We look forward to sharing more insights and learnings from this next chapter of our impact investment journey in the coming months.