We focus on retail finance for the underserved, underbanked, unbanked, LMI.  We’re committed to do so in a way that’s commercially viable and good for people.  With “good” we mean that it improves their lives. And with that we mean it increases economic stability, increases assets and thereby the overall quality of life.

In our investing we measure each company for its propensity to provide short and long-term consumer value.  Short-term value is largely cost reduction.  Long-term value is credit building, asset building, and “assimilating into the financial mainstream” (assuming that’s generally good for people).

90% of the companies we see offer payments innovation or credit innovations.  Almost none work in asset building.  If you have ideas there, call me now!  Asking entrepreneurs to create savings and investment tools for the poor hasn’t yielded an abundance of business plans to date (some, but not many).

Is there a way to convert the reality to our desired outcome?  I think micro business might be a way.  Payments and credit innovation in the hands of a micro-entrepreneur is much more likely to build an appreciating asset than are payments and credit innovations for the retail customer.   Jack Dorsey’s Square – a gizmo that plugs into your smartphone to be able to accept credit cards – is not just a powerful idea to enable a big market of small merchants who lack merchant banking capabilities like accepting credit cards, it’s also a way to build assets for the underbanked.  Making small loans to small businesses is more likely to yield “long term value” than are small loans to individuals.  I realize this is all pretty obvious, but to those focused on improving the lives of individuals through consumer finance tools, I’m just now becoming cognizant to the power of looking at micro-business.  Small business payments innovations, anyone?