Fast Company

ACCION, the World's Most Effective Non-Profit Microfinance, Thrives on Constant Innovation

"The more successful a breakthrough is, the sooner it becomes obsolete and therefore one must move to the next stage," says the former CEO.

Indian women

ACCION has been named the world's most effective microfinance organization. 131 international microfinance experts were consulted in the process, who then identified 12 leading players, of whom ACCION was named the most impactful by Philanthropedia, a leading non-profit effectiveness ratings group. What makes ACCION so effective? Constant innovation.

Remarks in the press release as to why ACCION was named a winner include statements about the organization's growth and sustainability, reliable consumer protection, and their role as a founder of microfinance. But Senior Harvard Business School Lecturer and former ACCION CEO, Michael Chu, gave Fast Company a more historical perspective.

"What makes ACCION so powerful is that, having pioneered a milestone in the development of the industry that was then celebrated by the outside world--and at the very moment it was receiving the public kudos for it--the organization had already began to question it internally. This happened with various breakthroughs: first, NGOs achieving commercial break-even (early 1980s); guarantee funds to link these NGOs to the banking sector (mid 1980s); turning these into commercial, regulated banks (1990s); first equity investment funds (late 1990s); downscaling of conventional commercial banks (late 1990s), and IPOs of successful microfinance banks (2007)."

Chu sees innovation and experimentation as critical to the success of ACCION, the results of which constantly provided the necessary feedback to help determine the ever-evolving direction of the organization.

In a nutshell, as soon as a success has been made, immediately move on to the next innovation.

"At the heart of this is the realization that, the more successful a breakthrough is, the sooner it becomes obsolete and therefore one must move to the next stage," says Chu. "This sounds easy, but requires the willingness to accept the inevitable pain and dislocation."

[Top image via flickr/McKay Savage; Homepage image via Brett Epic]

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