Accion, a global non-profit focused on fostering financial inclusivity, has introduced the Accion Digital Transformation Fund. The $152.5 million initiative, unveiled on May 14, 2024, is aimed at offering growth capital and strategic support to financial institutions such as microfinance banks, with an emphasis on empowering underserved small businesses in Africa and beyond.
Key contributors to the fund include British International Investment (BII), Dutch entrepreneurial development bank FMO, IDB Invest, International Finance Corporation (IFC), Mastercard, OeEB (Austria’s Development Bank), and Swedfund.
Abhishek Agrawal, Managing Partner of the Accion Digital Transformation Fund, explained that many individuals, particularly in rural areas, remain excluded from traditional financial services. “The challenge is twofold: building trust in digital technology among rural or late-stage digital adopters, and equipping financial institutions with the knowledge and resources to improve digital customer engagement,” Agrawal said.
The fund will focus on supporting enterprises serving micro, small, and medium enterprises (MSMEs) in Africa, South and Southeast Asia, and Latin America. Agrawal highlighted that investments will prioritize traditional microfinance organizations, affordable housing firms, and microfinance institutions transitioning into banks.
Accion plans to make equity investments ranging from $12 million to $15 million in 10 to 12 financial institutions. The fund will be directed toward new investments and will not extend to fintech companies previously supported through the organization’s Venture Lab initiative.
In 2018, Accion established the Accion Venture Lab, a $23 million fund dedicated to backing early-stage fintech startups. This initiative has provided seed funding and strategic assistance to over 65 startups across more than 30 countries, including Africa. Notable African investments include Kenya’s Apollo Agriculture, South Africa’s Lulalend, and Egypt’s Khazna.
Both the Accion Digital Transformation Fund and the Venture Lab are managed by Accion Impact Management. Another of Accion’s investment vehicles, Accion Emerge, focuses on supporting growth-stage companies in embedded finance, agritech, and future-of-work solutions.
