Accelerator

An entity or programme that supports established, young or mature companies in their development and growth. This is done through specialist training, coaching, mentoring and networking services, support for fundraising and international growth, etc.
While incubators focus on bringing entrepreneurial ideas to maturity and on launching businesses, accelerators act as a springboard to boost the growth of already established businesses. Some entities offer both incubation and acceleration programmes.

Agricultural value chain

A “value chain” in agriculture encompasses all the stakeholders and activities involved in moving a basic agricultural product from the production stage in the field to its place of final consumption, a process in which each stage adds value to the product.

These activities include the production, processing, marketing and distribution of agricultural products. The stakeholders include farmers, suppliers of inputs (fertilisers and seeds), processors, distributors, retailers and consumers. 
 

Basic services

Basic services are essential services required to ensure the survival, well-being, human dignity, and the full inclusion of people in society and in the labour market. Basic services generally include access to drinking water, sanitation, electricity, food, housing, education and health care. Depending on the viewpoint, they may also include financial services, telecommunications and internet access. 

Decentralised finance

Decentralised finance (DeFi) is a financial system that uses blockchain technology and smart contracts to provide financial services without the need for any central authority or financial institution. 

Clients can use DeFi systems to access loans, savings, money transfers, micro-insurance and other financial services quickly and inexpensively, through decentralised microfinance platforms.

Decentralised finance can be used to offer financial services such as lending, savings, money transfer and micro-insurance services. Benefits can include access to financial services for people without bank accounts, lower transaction costs and lower interest rates for borrowers. DeFi also offers simplified identity verification processes and greater transparency for loans and repayments. 

However, there are risks associated with the use of DeFi systems such as price volatility, fraud and money laundering. In addition, lack of regulation can make it difficult to resolve disputes and protect consumers. MFIs that use DeFi need to be aware of these risks and put in place security and protection measures for their clients.

Financial inclusion

Financial inclusion is the expected result of offering inclusive finance products and services. Financial inclusion refers to a situation in which all individuals and businesses have access to and can effectively use a wide range of financial services that are provided in a responsible manner and at a reasonable cost by viable institutions in a well-regulated environment. Financial inclusion is seen as essential for the financial health of individuals and companies, as well as for inclusive and sustainable economic growth.

Financial institution

A financial institution is an organisation that provides financial services such as fund management, lending, financing, investment banking, wealth management, insurance, securities trading and much more. Financial institutions may take the form of banks, insurance companies, asset management companies, securities dealers, credit unions and other types of financial entity. They play an important role in the economy by facilitating financial transactions and providing financial services to individuals, businesses and governments.

FSP - Financial service provider

A financial service provider (FSP) is an organisation that offers various financial services to individuals, businesses and other organisations. These services may include banking, insurance, investment management, financial advice and other related services.

Financial service providers may take the form of commercial banks, investment banks, insurance companies, asset management firms credit, unions or other types of financial institutions. They may offer a range of services such as cheques and savings accounts, loans, credit cards, mortgages, investment services and insurance policies.

Financial service providers play an important role in the global economy by providing individuals and businesses with services as well as access to capital and financial products that help them to grow and thrive. They also help to manage financial risk and provide protection against unforeseen events such as accidents, illness or natural disasters.

However, financial service providers must also operate within strict regulatory frameworks to ensure the safety and soundness of the financial system and to protect consumers from fraud and abuse. In many countries, financial service providers are subject to oversight by government regulators, such as central banks or financial regulatory authorities, and may be required to meet specific licensing and compliance requirements.

In recent years, financial technology (fintech) has given rise to a new class of financial service providers that leverage digital technology to offer new and innovative financial products and services to consumers and businesses. These fintech companies can take the form of peer-to-peer lending platforms, mobile payment providers, robo-advisors and other digital financial service providers.
 

Inclusive finance

Inclusive finance refers to a wide range of financial products and services (loans, savings, insurance, money transfers, payment solutions) that meet the needs of the entire population, including of the poorest people. In addition, these services meet the needs of small and medium-sized enterprises that find it difficult to access financial services.

While microfinance has historically been aimed at the poorest segments of society with services tailored to their specific needs, inclusive finance covers a broader range of services aimed at more diverse segments.

The providers of these inclusive finance products and services are also more diverse and not only include MFIs but also mobile network operators, fintechs, insurance intermediaries, banks, etc.

The change in terminology from "microfinance" to "inclusive finance" reflects the development of the sector, both in terms of products and services, as well as of targets and suppliers.
 

Incubator

A private or public entity that helps young businesses or start-ups by offering them training, advice, entrepreneurial support and, possibly, financing services.

MFI

A microfinance institution (MFI) is an organisation that offers financial services (loans, savings, money transfers, insurance, payment solutions) aimed at people who are excluded from the traditional banking system. 

MFIs may have different statuses: non-profit associations or NGOs, cooperatives, non-bank financial institutions or banks. 

MFIs sometimes offer complementary non-financial services, such as financial education, business management support, agricultural advice, etc.

MFIs inherently have both a financial mission (facilitating the management and growth of income-generating activities) and a social mission (increasing socio-economic inclusion). Recently, MFIs also acquired an environmental protection dimension, as clients of MFIs in developing countries are generally the most vulnerable to climate and environmental issues.
 

Microfinance

Microfinance is the supply of financial products and services (loans, savings, insurance, money transfers, payment solutions) to people excluded from the traditional banking sector due to their low income, their participation in the informal economy and/or their inability to provide security when applying for a loan. 

Since its launch, microfinance has been seen as a means of improving the autonomy of the poorest by reducing financial exclusion, which is both the consequence and the cause of poverty and social exclusion. Microfinance therefore has a twofold economic and social objective.

The financial products and services deployed in microfinance are often complemented by non-financial services, such as financial education (to enable microfinance clients to use these services appropriately), training on various development-related topics (health, education, gender, etc.) and access to basic services (health, education, etc.).

Microfinance products and services were often provided by “microfinance institutions” (MFIs) with different statuses (non-profit associations or NGOs, cooperatives, non-banking financial institutions, banks, etc.).

History of microfinance

Microfinance, as we know it today, was popularised by Muhammad Yunus, the 2006 winner of the Nobel Peace Prize. Dr Yunus, known as the "world's banker to the poor" was the founder of the first microcredit institution, Grameen Bank, in 1976 in Bangladesh.

Other institutions offering the same type of services, as well as informal systems, already existed at that time. One of the best- known services is tontines: groups of people who meet regularly and save together to invest in a project or to meet the needs of one of the savers. Each saver in turn benefits from the collective pool of savings at some point in their life, which they will be required to repay over a given period.

Today, microfinance is available in developed as well as developing countries, and is generally governed by specific laws.

MIS

A MIS (Management Information System) is software used to administer a company’s internal processes, in this case those of a microfinance institution. These processes include the management of its lending and savings portfolio, accounting, human resource management, as well as the management of any other information relevant to the entity’s operations.

Professional association

A professional microfinance association is an organisation that brings together microfinance professionals, such as microfinance institutions (MFIs), consultants, microfinance experts and researchers. Its purpose is to promote the development of microfinance and to represent the interests of its members.

Professional microfinance associations may offer a variety of services to their members, such as training, networking events, research and analysis of microfinance industry trends, as well as information on government regulations and policies affecting microfinance institutions.

These associations can also play an important role in promoting ethical standards and practices in the microfinance sector, thereby helping to strengthen the transparency and accountability of microfinance institutions to their clients. Professional microfinance associations may also represent their members before governments, regulators and other stakeholders in the financial sector to promote an environment conducive to the development of microfinance.
 

Young people

ADA applies the definition used by the African Union, with young people meaning people aged between 15 and 35.