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Social Capitalists

By Jennifer Vilaga

ACCION International

Boston, Massachusetts

Founded: 1973
Field: Business development
Budget: $8.3 million

"We have taken traditional banking and turned it inside out," says Maria Otero, president and CEO of ACCION International. The organization's pioneering approach to microfinance -- small loans used strategically to seed tiny businesses -- has made a long-standing impact on millions of poor people like Teresa, a baker in Bolivia. Through ACCION, Teresa was able to get her first $100 loan. She used the money to buy supplies to bake bread using the mud oven in her one-room house. Six years and several loans later, Teresa has borrowed again -- now for $2,800 -- to expand to five ovens and a backyard storefront.

  • Entrepreneurship: A-
  • Innovation: A
  • Social Impact: A+
  • Aspiration: B+
  • Sustainability: B+

ACCION was formed in 1973, when it granted a $100 loan to a resident of Recife in northern Brazil. That began ACCION's record of innovation in the world of microfinance. The organization offers access to financial tools -- including loans, bank accounts, and business training -- to so-called high-risk borrowers who lack collateral and a credit history. ACCION creates microfinance institutions from scratch or by partnering with existing banks.

In 1987, ACCION made an important breakthrough when it created BancoSol, its first microlending nonprofit turned commercial bank. Even though there was a 99% rate of return for the loans ACCION had been distributing, its lending network often racked up operating costs that funding couldn't always accommodate. BancoSol's success demonstrated that a bank engaged in a heartfelt mission could also deliver cold, hard profits -- helping to increase ACCION's scale.

A model for what ACCION could do in other developing countries, BancoSol showed that making a profit was a powerful incentive: More cash surplus meant that more loans could be extended to more people. "Once you become a commercial bank, you can access the international market," Otero says. "Your growth can be far more dramatic."

Even though ACCION continues to create new banks, it also pursues partnerships with existing financial institutions that have their own social mission. This year, ACCION will begin work with Caja Social, one of the largest banks in Columbia, to help the bank develop its own method of socially responsible lending. ACCION also plans to strengthen and increase its work in Africa.

With a network that covers 20 countries in Latin America, the Caribbean, and Africa, as well as 33 cities in the United States, ACCION serves more than 3 million people, with $590 million in outstanding loans. Overall, ACCION has issued more than $4.6 billion in loans to 2.7 million people, 97% of which have been paid back.

But Otero says the real impact lies elsewhere. "The real outcome will manifest itself in the education and choices that will open up for their children," she says. "The power of putting capital in the hands of poor people enables them to create their own wealth and invest in their children."


Maria Otero, President and CEO

Maria Otero joined ACCION in 1986 and was executive vice president for eight years before becoming president and CEO. Otero chairs the MicroFinance Network and cochairs the Microenterprise Coalition. She sits on the boards of the Calvert Foundation and the U.S. Institute of Peace and is an adjunct professor at the Johns Hopkins School for Advanced International Studies. Otero has worked with the Inter-American Foundation, CEDPA, the U.S. Agency for International Development, the World Bank, and Bread for the World. She has written numerous articles on women in enterprise, training, and microenterprise development. She is coeditor of The New World of Microenterprise Finance. Otero holds master's degrees from both the University of Maryland and Johns Hopkins.

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