The first FinTech fund created to help the underserved has closed, reaching millions in capital contributions, which will go toward people and companies who need assistance in the financial sector.
The Accion Frontier Inclusion Fund closed with $141 million in capital contributions. This is a global non-profit dedicated to building a financially inclusive world with economic opportunity for all, by giving people the financial tools they need to improve their lives. It is managed by Quona Capital, which invests in entrepreneurs and growth-oriented businesses seeking to change how financial services are delivered in emerging markets.
Michael Schlein, CEO and President of Accion, said in a report from Finews.Asia, that:
Three billion people are left out of, or poorly served by, the global financial system, the world’s first global fintech fund for the underserved, will help this.
With limited or no access to credit, payments, insurance or savings, the fund is aiming to boost alternative solutions among payments, credit, insurtech, and small and medium enterprise finance.
Even though the fund will be focusing on emerging markets within sub-Saharan Africa and Latin America, there will be increased focus within the emerging FinTech markets found in India and Southeast Asia.
FinTech Promise in India
Since the announcement of India’s demonetization in November, which saw the removal of the country’s biggest banknotes, the Rs 500 and Rs 1,000, India has been pushing a digital agenda.
So much so, that India’s central bank said last month that if banks fail to go digital in the face of FinTech they could risk becoming obsolete as the industry continues to grow.
The country has great potential to harness the financial technology market. This can be seen by the fact that the nation experiences high smartphone use. In January 2016, it was reported that India crossed a billion mobile subscribers becoming the world’s second largest smartphone market after China.
Not only that, but home to what are considered the world’s cheapest mobile tariffs and India has plenty of room for further development within the FinTech market.
And yet, while FinTech investments declined in 2016 to $216 million from $1.6 billion in 2015 in India, it remains a key area for venture capital investors in Asia.
It’s believed that the result of the demonetization, which boosted transactions is a trend that will continue in Q1 and Q2 2017. In turn this will attract more investors to the country, which will further develop India’s market as it continues to demonstrate its potential for inclusive FinTech.
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