INTERVIEW: Can AI Close the World’s $5.6 Trillion SME Financing Gap?

In this interview with Impact Newswire, Amee Parbhoo and Rahil Rangwala, Managing Partners at Accion Ventures, examine how fintech is evolving from a story about expanding access to one increasingly focused on affordability, risk and sustainable growth. They discuss the remaining gaps in financial inclusion, particularly access to credit, insurance and savings, and why serving underserved consumers and small businesses profitably remains one of the industry’s biggest challenges. Parbhoo explains how embedded finance and alternative business models can make financial services more relevant to MSMEs, while Rangwala explores how artificial intelligence, voice technology, agentic AI and stablecoins are lowering the cost of serving customers and transforming underwriting, fraud prevention, compliance and cross-border payments. 

The global fintech industry has moved from a story primarily about access to one increasingly about quality, affordability, risk and commercial sustainability.

The basic financial-inclusion numbers show both the progress and the unfinished work. The World Bank’s Global Findex found that 79% of adults globally had a financial account in 2025, up from 51% in 2011. Yet about 1.3 billion adults remained unbanked, equivalent to 21% of the world’s adult population. Women, poorer households and younger people remain disproportionately excluded.

At the same time, digital finance has reached enormous scale. The GSMA estimates that mobile money processed more than $2 trillion in transactions in 2025, with 2.3 billion registered accounts and 593 million active 30-day accounts globally. Transaction values have doubled since 2021, demonstrating how rapidly mobile money has evolved from a financial-inclusion tool into core financial infrastructure.

But access to an account does not necessarily mean access to useful financial services. The World Bank has noted that only about half of adults in developing economies said they could reliably access emergency funds within 30 days, highlighting the difference between having an account and having meaningful financial resilience.

That distinction is particularly important for small businesses. The latest SME Finance Forum estimate puts the MSME financing gap in emerging markets and developing economies at $5.6 trillion, based on 2025 data. The gap increased by $1 trillion between 2015 and 2025, a 25% increase. Women-owned MSMEs account for about 34% of the gap.

MSMEs represent more than 90% of businesses globally and account for roughly 70% of employment and 50% of GDP, according to the IFC. Yet in emerging markets, about 70% of MSMEs lack adequate financing to grow, with the IFC estimating a $5.2 trillion gap for formal MSMEs and another $2.9 trillion for informal MSMEs.

This creates a large opportunity for fintech, but also a difficult commercial problem: how do companies profitably serve customers who traditional financial institutions have historically considered too expensive or risky to serve?

That question is becoming more complicated as artificial intelligence enters financial services. AI could reduce the cost of underwriting, customer service, fraud detection, compliance and financial-product distribution. Alternative data could also allow lenders to evaluate customers without conventional credit histories.

But there is a corresponding risk. Algorithms trained on incomplete or biased data can reproduce existing inequalities, while automated lending decisions can make exclusion faster and harder for customers to challenge.

An IMF study published in 2024 found that the relationship between fintech and financial inclusion varies significantly by technology and market. Its analysis of 84 countries found that the overall effect of fintech on inclusion was statistically insignificant across the full sample, although it became positive and statistically significant in developing countries. The study also found that digital lending had a significant negative effect on financial inclusion in its sample, underscoring the importance of regulation, financial education and consumer protection.

Cross-border payments represent another major unresolved problem. Despite the growth of mobile money and digital payments, moving money internationally remains expensive, particularly for migrant workers and lower-income users. The challenge is not simply the payment interface. It involves fragmented payment systems, foreign-exchange costs, compliance requirements, correspondent banking relationships and differences in regulation across jurisdictions.

American non-profit Accion says its Ventures strategy has deployed capital into 80-plus early-stage startups across more than 30 countries. Its portfolio spans areas including consumer finance, MSME finance, embedded finance, alternative data and agricultural finance. Accion’s investment history also provides a useful lens on what happens after the initial financial-inclusion pitch.

The organisation said in 2025 that its investment strategy had deployed $59.4 million across 76 companies in more than 30 countries, with 13 full or partial exits. Its portfolio has included Kenya-linked companies such as Apollo Agriculture, as well as Lula in South Africa and Pula, which operates across Africa and Asia.

Faustine Ngila spoke with both Amee Parbhoo, Managing Partner at Accion Ventures, and Rahil Rangwala, also a Managing Partner on where investors still see gaps in financial inclusion and what distinguishes a genuinely scalable company from one with a compelling social-impact narrative but weak economics.

Interview with Amee Parbhoo, Managing Partner, Accion Ventures

1. With 1.3 billion people still excluded from the financial system, where are the biggest gaps that fintech investors are still failing to address?
   
   It’s clear that we’ve made tremendous progress around financial inclusion. According to the 2025 Global Findex, in low- and middle-income countries (LMICs), 75% of adults have an account, an increase of 80% over the last decade. Moreover, while great progress has been made in digital payments, other financial services, such as credit and insurance, remain underutilized. Fintech offers the opportunity to create new innovative models targeting where gaps remain – MSME credit, insurance, payment infrastructure, savings for consumers, and much more.

2. AI is becoming central to fintech, but how do you ensure it expands financial inclusion rather than creating new forms of exclusion through biased data, automated decisions or digital barriers?
   
   We believe AI can have a real impact on financial inclusion by lowering costs to serve underserved populations and creating new, more personalized financial solutions. Many of the solutions we’re seeing today are behind the scenes, helping financial service providers like banks and fintechs better manage their workflows to be less costly and more efficient. We are, however, also seeing a rise of customer-facing AI solutions such as personalized financial advisors. These solutions must have the right guardrails in place to manage and monitor the use of AI. We’re spending time with our companies, both during diligence and post diligence, to monitor how these models leverage data for decision-making, whether these decisions are explainable to the end user, and what the role of human oversight is in the process.  Ultimately, there’s also an important role for regulations to play in ensuring AI does not create new forms of exclusion.

3. MSMEs face a $5.7 trillion financing gap globally. What technologies or business models do you believe can make financing small businesses commercially viable at scale?
   
   MSMEs have a wide array of financial needs and financial solutions need to be right-sized and right-fitted to meet them. That means designing credit products that match the reality of an MSME’s business. We have seen many examples of how embedded finance solutions –  financial products offered alongside non-financial products in a way that’s built into the context of an MSME’s day-to-day work –  successfully reach small businesses.  For example, Agrim in India provides a marketplace for small agri-retailers to purchase inventory for their stores. They have embedded inventory financing into the purchase of these products to match how a retailer’s business operates. Another portfolio company, Kuunda, provides liquidity solutions to mobile money agents in Tanzania and now across Africa. These loans are short-term and enable agents to manage their e-float so they can process transactions for their customers.

4. Cross-border payments remain expensive and fragmented across emerging markets. What needs to change for fintech to make sending and receiving money across borders genuinely affordable and seamless?
   
   If you are a small Africa importer buying inventory from overseas today, you expect cross border payments to be slow and expensive. What’s needed is a complete reworking of the infrastructure beneath cross-border payments.  That’s what we’re seeing today. Several companies are leveraging stablecoins to make cross-border payments cheaper, faster, and more transparent. The underlying money movement is just the first step, however. Oftentimes, the most expensive step still remains moving that money on and off-chain, making the money “real” for their users. We’re excited to see more solutions emerge that recognize the hybrid nature of cross-border payments and are creating the bridge between fiat and stablecoin currencies.

5. Accion Ventures has invested in 80 early-stage startups across more than 30 countries. What separates fintech companies that can scale sustainably from those that have a compelling inclusion story but struggle to build viable businesses?
   
   Serving underserved customers can often mean high acquisition and servicing costs against low revenue per user, so the companies that make it work bring that cost down early. Typically, we’ve seen this done through distribution partnerships or by embedding finance into non-financial offerings. Successful companies also price around how their customers actually earn and spend – while we’re seeing a rise in subscription fee-based models, historically these can be difficult to scale given a small business or lower income consumer with informal, irregular incomes. 

Interview with Rahil Rangwala, Managing Partner, Accion Ventures

1. What are you seeing among fintech startups today that would have been difficult to build or scale five years ago because of advances in AI, infrastructure and digital payments?
   
   With technology today, we’re seeing the deployment of new innovations at a pace never seen before. With voice AI and embedded finance, it’s becoming a lot easier to meet the customer in the language and context they are comfortable in. Agentic AI is making it easier to build trust and reduce fraud and improve regulatory compliance. Stablecoins are not only collapsing the cost of cross border payments but also making real time payments a reality.

2. AI could dramatically reduce the cost of serving low-income customers and small businesses. Which applications are showing the most credible potential beyond the hype?
   
   AI is having a tangible impact across the board in financial services. Underwriting thin file clients, personalized savings and wealth management solutions, automating the CFO stack for SMEs, and reducing cost of delivery thus making small ticket financial solutions more viable are just a few examples of where AI is changing how low incomes customers access financial services today.

3. How can fintechs use alternative data to extend credit to underserved entrepreneurs without simply replacing traditional financial exclusion with algorithmic exclusion?
   
   Fintechs have used alternative data for underwriting for decades. From using satellite imagery to mobile phone usage – fintechs have always been mining alternative data to improve how they understand and price risk. The Center for Financial Inclusion, an independent think tank housed at Accion, has highlighted the risks of algorithmic bias and the need for further research in this area. For us, it starts with recognizing that algorithmic bias exists and not just relying on black box solutions. Algorithmic transparency is key. Developers need to fully understand the limitations of the training data set and see where they can leverage synthetic data to bridge any data gaps in their training set.

4. Many emerging-market fintechs have struggled to move from rapid user growth to sustainable profitability. What does a viable inclusive fintech business model look like today?
   
   The majority of fintechs, whether they may be in emerging markets or in developed markets, struggle to achieve product market fit and achieve rapid growth trajectory. This is a feature, not necessarily a failure, of the venture ecosystem built around rapid prototyping. The landscape today for inclusive fintech businesses continues to be promising. The market opportunity continues to be large. With AI and new technologies, the cost of developing solutions to solve this large under-banked population and the time it takes to do so has reduced significantly. The market expectations of growth investors reflect this new reality. As a result, today’s inclusive fintech founders are achieving rapid growth with fewer resources.

5. As global investors become more cautious about fintech, what are the most attractive opportunities you see in emerging markets over the next three to five years, and why?
   
   As global macros continue to be volatile, we’re not surprised to see global investors become risk averse. But the market fundamentals are very real! The recent 2025 Global Findex shows that only 40% of customers save, while only 24% borrowed formally from a bank, or using a credit card or mobile money account. And the market opportunity to serve them is unchanged. Real-time data and AI are changing how risk is measured and priced. Stablecoins and fintech infrastructure are making cross border payments affordable and real time. AI tools are reducing costs of compliance and fraud detection. Fintech infrastructure is creating the modular building blocks for entrepreneurs to build interoperable and embedded solutions to make financial services continuous, contextual, and affordable at last-mile scale.

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