Adelina Lasso, Partner
Adelina shares key insights on Accion’s recent US$10 million investment in Los Andes from their Digital Transformation Fund. She’ll provide us with:
- The investment’s significance in rural microfinance and gender-focused initiatives
- How Accion leverages its global network to support digital transformation
- The balance between financial returns and social impact in Accion’s investment strategy
- Key performance indicators for measuring success, including digital adoption and rural outreach
- Lessons learned from previous investments and their application to Los Andes
Adelina also shares Accion’s approach to:
- Facilitating knowledge sharing across markets
- Evolving impact measurement in the digital age
- Potential synergies between Los Andes and other portfolio companies
As part of Accion’s leadership, Adelina’s insights will illuminate how new investments and digital transformation are shaping the future of financial inclusion in Latin America and beyond.
1. How does the $10 million investment in Los Andes compare to Acción’s other size and strategic importance investments within its portfolio?
This investment is the average investment size of Accion Digital Transformation Fund. It is of strategic importance for Accion Digital Transformation Fund as it is on the rural microfinance space with an angle on gender. Accion Digital Transformation Fund has already made two investments in other rural microfinance institutions in Asia and intends to bring learnings across regions.
2. What specific expertise or resources from Acción’s global network will be leveraged to support Los Andes’ digital transformation beyond the financial investment?
The network of Accion in Latin America and globally, leveraging experiences in other rural microfinance institutions that are in the process of digital transformation. Accion Impact Management (AIM) is our platform for impact investments in financial inclusion leveraging third-party capital). With AIM we can contribute with Accion’s global technical expertise in digital transformation. Los Andes has an ambitious M&A strategy in Peru that Accion Digital Transformation Fund supports through strategic advice.
3. How does Acción’s investment strategy in Latin America differ from its approach in other regions, such as Southeast Asia or Africa?
It is aligned with our global strategy, where we have already invested in two rural microfinance institutions and in one vehicle financial company, which are in the process of digital transformation.
4. What key performance indicators (KPIs) will Acción use to measure the success of its strategic support for Los Andes’ digital transformation?
Accion defines financial and social impact indicators to define the success of its investment. Some of them are related to the size that the institution achieves at the exit of Accion Digital Transformation Fund (i.e. gross loan portfolio, total savings, total customers, total women borrowers). The digital transformation is also important for the investment thesis of Accion Digital Transformation Fund, so we track the percentage of transactions that happen through digital channels as well as the percentage of digital products. It is also key for Accion that Los Andes keeps its commitment to rural communities; therefore, the percentage of clients in the rural segment is also tracked as the institution grows throughout the years.
5. How does Acción plan to balance its non-profit mission with the potential financial returns from its investments through the Digital Transformation Fund?
Accion believes that both financial and social impact can be achieved. It has defined objectives for both.
6. What ROI metrics is Acción using to evaluate the success of Los Andes’ digital transformation over the next 3-5 years?
Accion Impact Management (AIM) includes digital transformation on the business plan of its portfolio companies. The impact on digital transformation comes on several fronts such as higher scale, lower operating expenses, better portfolio quality, higher variety of products.
7. What lessons from previous investments in digital transformation has Acción incorporated into its strategy for supporting Los Andes?
Accion included digital transformation on its due diligence and co-developed with Los Andes a new digital transformation strategy, which was approved by Los Andes’s board before the investment of Accion Digital Transformation Fund. Following this process and having the alignment with the board, shareholders and management team are key for Accion Digital Transformation Fund.
8. How does Acción’s Digital Transformation Fund structure its exits from investments like Los Andes, and what is the typical investment horizon?
We structure the exit before we make the investment by aligning with the other investors and founders. We typically develop an exit waterfall and timeline. Usual timeline horizon to exit is between 5 and 7 years.
9. What role does Acción play in facilitating knowledge sharing and best practices among its portfolio companies across different markets?
We identify common themes among them and make the relevant connections. Accion Digital Transformation Fund is also planning to bring all its portfolio companies together to facilitate these connections.
10. How does Acción’s approach to impact measurement evolve as it increases its focus on digital transformation in microfinance?
We have included metrics on digital transformation, which are part of our objectives with the companies. Our metrics span across reach, quality, catalytic change and digital engagement.
11. What synergies or collaboration opportunities does Acción envision between Los Andes and other companies in its investment portfolio?
Accion Impact Management (AIM) sees potential to collaborate among its global rural microfinance portfolio. Accion Digital Transformation Fund has two rural microfinance companies in Asia (India and Indonesia) and now Los Andes in Peru. AIM is exploring applying learnings on climate mitigation instruments across its rural microfinance portfolio.
