Microcredit – III : ACCION – Helping millions help themselves

(Final part of 3-part series on “Microcredit instituitions and their impact” by Ksheera, Dan, Renata, Pankaj, Hiroko at Anaheim’s Green MBA program)

ACCION International was established in 1961 and has been a leader in the field of microfinance since 1973. Leveraging over 45 years of experience in the field of international economic development, ACCION is a private, nonprofit organization with the mission of “giving people the financial tools they need to work their way out of poverty.”

a. Approach

A five-step approach guides ACCION in achieving its mission:

  • Partnerships to Reach Scale:

ACCION currently partners with 28 microfinance institutions (MFIs), NGOs and commercial banks across Latin America, the Caribbean, Africa andAsia.

  • Creation, Expansion and Training: 

ACCION guides its partners in developing and delivering best-in-class financial services for the poor.

  • Innovation:

Innovative risk management and service delivery to remote areas is its strength.

  • Access to Further Funding:

ACCION also provides equity financing and loan guarantees to institutions enabling them to invest in resources such as better core-banking systems and increased number of branches.

  • Leadership:

Working with Center for Financial Inclusion, ACCION promotes global and full financial inclusion. It also participates in and organizes events, conferences, develops publications, and collaborates with the private sector.

b. Product

ACCION’s product of providing loans works in three steps:

  • Evaluating a client’s credit potential through – collateral and character
  • Borrowing as an individual or as a group
  • Short-term loans as low as $100 to be paid in 3-6 months

c. Scale

ACCION is a growing and prosperous organization. According to its 2009 form 990, ACCION had a surplus of over $16 million.   Additionally, it has helped to build 62 microfinance institutions in 31 countries reaching millions of clients. In the US, the U.S. ACCION Network is the largest microfinance lending network and has served tens of thousands of clients with over $275 million in loans since the inception of its pilot program in 1991.

d. Impact

According to the ACCION International website, as of December 2009, the company reaches “a total of 3.3 million poor people with microfinance”.

Daniel Sucenski, the co-author of this paper, communicated with Stanley Kwok, ACCION’s ‘Head of Asia Development.’ Kwok cites that ACCION reaches closer to 4 million people with more than 800 million potential clients around the world and that the combined reach of about 6000 MFI’s [Micro Finance Institutions], the industry is still only able to reach about 150 million of them.


Microcredit institutions are playing a significant role in providing financial opportunities to small entrepreneurs, enterprises and individuals to sustain their business and their life.

Global economic recession has forced banks to not issue new loans and not provide funds to smaller firms because of their lower repayment capacity – which makes it hard to ensure the funds they need for investment in new facilities and businesses. Thus, what ensues is a vicious cycle of business failures and economic stagnation.

Companies like Kiva, ACCION, Vittana, Kashf Foundation and many others with their unique trust-based financing methods and partnering with various MFIs, NPOs, and commercial banks, are breaking that cycle by providing loans to assist small enterprises and individuals

But with the recent removal of Mohd.Yunus as Managing Director of the Grameen Bank in Bangladesh and some of the companies vying for Initial Public Offerings (IPO’s) have somewhat stained its reputation – diverting the real cause of creating a social business model for the needy. Their services help to increase the economic growth in different business fields and must continue doing that. Without such financial assistance provided by these microcredit institutions, it will make companies and individuals difficult to start and sustain their businesses.

Therefore, these microcredit institutions have been a beacon of hope for expanding financial services to assist communities, individuals, and small enterprises for a global and a sustainable economic growth.


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