ACCION International, a pioneer and leader in microfinance, today announced the release of a new white paper, ACCION’s Model for Social Change, articulating the aspirations, rationale and key new strategic initiatives driving ACCION’s mission to help alleviate poverty.
As the preface to the nonprofit’s new 2008-2011 strategic plan, the paper outlines the four fundamental aspects of poverty that ACCION addresses – low income, poor quality of life, vulnerability and lack of dignified solutions – through the provision of financial services to low-income households. Importantly, ACCION is broadening its target audience, from informal-sector microentrepreneurs in urban Latin America, to all types of low-income families, urban and rural, worldwide.
ACCION’s Model for Social Change outlines why financial services are particularly suited to mitigating risk and fostering self-help, and explains how ACCION intends to catalyze large-scale social change. The ACCION approach includes demonstration of effective models for replication, innovation to solve key microfinance industry challenges, and promotion of best practices and collaboration within the field.
The strategic plan, which is being developed under the supervision of ACCION senior vice president Elisabeth Rhyne with the assistance of Cambridge, MA-based Monitor Group, and which will be released in detail in early 2008, specifies new initiatives in three key areas: microfinance institution (MFI) services and investments, with major capacity-building in West Africa, India and China; new strategic ventures and alliances, including those with non-MFIs; and the creation of a new center for the microfinance industry, designed to foster industry and private-sector collaboration for breakthrough solutions. The center will be directed by Ms. Rhyne.
ACCION is developing a new business model for microfinance, one that minimizes the cash, paper, and manual processes that make microfinance so much more costly than traditional banking. ACCION will combine its technical assistance to MFIs with minority investment positions in key partners. ACCION also intends to expand its partners, creating joint ventures with non-MFIs to create product and process advances. Its new center, focused on financial inclusion, will gather microfinance practitioners from around the world – convening, researching, publishing and publicizing knowledge to help create breakthrough change.
ACCION has been able to develop and adopt these new approaches in part due to the sale of half its shareholding in partner MFI Compartamos, of Mexico. In April of this year, Compartamos issued a highly successful IPO in order to raise capital for expansion.
"We promised thoughtful, careful stewardship of the Compartamos IPO returns, which we’ve now begun applying to develop this broader, more inclusive reach to the poor," said María Otero, president and CEO of ACCION. "More investment in emerging MFIs where risk has yet to be mitigated, more demonstration effects to catalyze large-scale change, more collaborative work with industry peers to help drive major changes – these are all now possible thanks to this watershed event.”
Via: (ACCION International)
