37 JAMES MILITZER Getting Real About Innovation: Why Accion’s U.S. Network Made the Leap to Digitize its Lending Operations Technology can be a double-edged sword—especially when it comes to small business lending. While there’s plenty of justified excitement over the potential of providing underserved SMEs with fast access to loans through digital platforms, there are also considerable reasons for caution. Though alternative lending products can boost access, many lack transparency regarding the true cost of the loan, and therefore risk trapping small businesses in a cycle of debt. Indeed, approximately one in four small business loan applicants in the U.S. apply for new loans primarily to refinance existing debt. For socially focused lenders serving low- to moderate- income entrepreneurs, both the risks and the rewards of alternative lending are more acute. They can’t afford not to innovate, as they would risk leaving their clients at the mercy of less scrupulous, higher-priced lenders. At the same time, many struggle to adapt to the pace of innovation in a context where “failing fast” means letting down the people they serve. In spite of these challenges, Accion in the U.S. recently completed what it calls its “most significant investment in innovation to date”: an ambitious effort to digitize lending operations and optimize the evaluation of small business loan applicants across its national online lending platform. According to Gina Harman, CEO of Accion’s U.S. Network, the goal is “to quadruple the number of loans we provide each year, without leaving behind our traditional Photo: Pexels.