Fisher: Digital Financial Services Critical for Inclusive Recovery

The Chief Investment Officer at Accion, and Chairman of the Board of Accion Microfinance Bank in Nigeria, Mr. John Fischer, in this interview speaks about how financial institutions can aide growth post-covid, plans of his organisation and other pertinent industry issues. Nume Ekeghe presents the excerpts

What is Accion’s most noteworthy strategic goals in supporting businesses globally?

While the end of the COVID-19 pandemic is in sight for some people in wealthier countries, many communities around the world are currently facing the worst of the crisis. Digital financial services have a critical role to play in fostering an inclusive recovery — helping small businesses stay open, community pharmacies remain stocked, and families access safe places to save and borrow money. Accion is working to ensure that low-income families and small businesses who are most affected by the crisis have access to the financial tools they need to survive, begin to recover, and establish their financial resilience for the future.

Where are the potential areas of growth/opportunity in the Nigerian economy and how is Accion international supporting Accion MFB and businesses to harness these opportunities?

The pandemic has dramatically accelerated the shift to digital around the world. A recent report from GSMA revealed, for example, that mobile money accounts globally grew by 13 percent in 2020, to reach a total of more than 1.2 billion. As more businesses and transactions move online, this opens doors to security and growth for those who have long relied on cash and in-person transactions to conduct business and manage daily life. Accion is ramping up efforts to help our partners leverage new digital technologies to support vulnerable families and small businesses and help them build financial resilience. Through our investments, advisory services, research, and a first-of-its kind partnership with Mastercard, we are helping microfinance institutions (MFIs) like Accion Microfinance Bank leverage digital technologies to reach more clients and serve their clients more effectively. These institutions already reach millions of low-income clients in emerging markets around the world, but many are built on high-touch, face-to-face models designed decades ago. By helping MFIs go digital, we can help their clients do the same, and access the tools and skills they need to transition away from using cash and start to access the security and opportunities of the digital economy. More broadly, we also continue to support fintech startups around the world that are finding new ways to meet the needs of financially underserved people.

In your opinion, what are the significant global financial and economic changes that are set to happen over the next one to three years and how is Accion International supporting partners globally to position for this?

While the pandemic recovery accelerates in wealthier countries, many low-income families and small businesses in emerging markets are still coping with the worst effects of the global pandemic. Their road to recovery is more challenging and fraught than anyone else’s. According to the World Bank, more than 100 million people have been pushed into poverty due to COVID-19, and the IMF’s World Economic Outlook shows that while global GDP is projected to grow 6 percent in 2021, many emerging markets are not expected to return to their pre-pandemic levels until 2023. To help our partners weather the crisis, we’ve provided capital, extensive advisory support, and opportunities for leaders to share learnings across institutions. We’ve helped them provide flexibility and forbearance for their clients to give them the time and resources they need to rebuild their businesses. We’ve helped them design and launch new digital tools, and better collect and analyse data to understand and answer their clients’ specific needs.

How important is good governance in driving financial and social inclusion?

It’s important that financial service providers prioritise their clients’ needs and protect their clients’ interests, and that’s what Accion seeks to ensure through active board governance with our partners. It’s one of the primary ways we support our partners’ efforts to reach underserved populations, and it’s the reason that I serve as Chairman of the Board at Accion Microfinance Bank. Responsible governance can help institutions grow sustainably by building financial products that answer clients’ specific needs and help them build their financial health.

Accion Microfinance Bank is a great example of how strong leadership and a client-centered approach can drive impact. The bank put moratoria in place early in the pandemic to ease the burden on their customers, provided an interest rate discount, and invested in new tools and systems that are helping small businesses and families get the funding they need to weather the crisis.

How is Accion’s partnership with Mastercard supporting the drive for financial inclusion and access to digital financial service?

In 2018, Mastercard and Accion launched a groundbreaking partnership to help millions of people and merchants participate in, and benefit from, the digital economy. We started this work before the pandemic, and we had no way of knowing just how urgent it would become due to COVID-19. Through the partnership, we are guiding and supporting the digital transformation efforts of financial service providers around the world—helping them develop and adopt digital tools to serve more small businesses more effectively, and drive the digital transformation of millions of microbusinesses that have traditionally relied on cash. While we have partnered with Accion Microfinance Bank for many years, Accion’s partnership with Mastercard enabled us to expand this work in new ways. Through the partnership, we are helping Accion Microfinance Bank build a digital microfinance bank that complements the bank’s standard operations. This work involves the launch of new digital financial products that will allow customers to apply for credit, get approved, and receive funds remotely, efficiently and quickly using digital tools and channels. Accion Microfinance Bank has taken a flexible and multifaceted approach to support their clients who are coping with unprecedented challenges due to the pandemic. The incorporation of new digital tools is critical to these efforts.