Catalyst Fund AAA Framework in Practice

Co-authored by: Malika Anand and Maelis Carraro
March 23, 2021 - 7 mins read

Since its inception, Catalyst Fund has focused on investing and supporting inclusive tech companies. But what are the features that constitute a truly inclusive product or solution? 

Tech companies we support leverage technology and user-centric product design to create solutions that are more accessible, affordable, and appropriate than existing alternatives for the end-customers, solving specific challenges those users are facing in a way that meets their needs. After years of creating and refining products designed for low-income and underserved people, Catalyst Fund has developed the AAA Framework as a way to better understand and gauge what makes a fintech product truly inclusive. The framework has also been adopted by the Center for Financial Inclusion/MIX Market and integrated into the Inclusivity Framework used to judge the InclusiveFintech50 competition.

Defining inclusivity

It may go without saying, but an overarching definitional feature of an inclusive product is that it provides value to users who would otherwise be un- or underserved by other alternatives in the market, thereby meeting their unaddressed needs. While this may seem simple to establish based on evidence of needs and gaps in the market, conclusively demonstrating that a product provides value or measuring the extent of that value is much more complicated and often involves parsing the meaning of “benefit”. This complexity aside, inclusive financial products should meet users’ needs or improve their financial or overall well being in some tangible way. Among underserved users this may mean enabling access to a service for the first time, expanding the range of services/tools a user has access to, improving  opportunities for income-generation, facilitating healthy financial habits, or easing cost or effort of administration for a small business. 

Focusing on value propositions that are relevant to underserved users shifts the focus away from expansion of traditional financial services, toward crafting financial services that are specific, tailored, and impactful for marginal, low-income, remote, or otherwise unserved users. For example, enabling access to insurance and risk coverage does mean giving low-income farmers and workers access to middle-class products that cover risks that are not relevant (e.g., auto or home insurance), but rather, it means innovating relevant products like crop coverage, or motorcycle policies to better serve them. 

For instance, insurance coverage in Nigeria is extremely low at only 5%, and it remains so because few understand or can afford a traditional health insurance policy. Given these circumstances and the particular disease burden, companies like Wellahealth have innovated tailored, locally-relevant policies like malaria coverage and hospicash that are relevant to the population. By crafting policies that address the pains felt by Nigerias, the startup can create an appropriate approach to insurance. 


Catalyst Fund AAA framework

Once the value of a solution is established, tech products that are inclusive excel on three dimensions: they are accessible, appropriate, and affordable for underserved segments. 

Solutions that fit this definition differ from traditional financial products, for example, in that those products are typically too expensive for low-income people as they might have higher fees, minimum deposits, or set-up costs that are out of reach. They are also inappropriate, meaning the user experience isn’t right for users who have low digital literacy or unpredictable income flows. Finally, traditional products are typically inaccessible for remote, low-income users because they may depend on use of branches, ownership of smartphones, and constant connectivity. 


Triple A in practice

Some examples of solutions that are affordable, accessible and appropriate include: 


Inclusive tech products that are affordable reduce costs for low-income and underserved users

Cowrywise wealth builder
Cowrywise wealth building platform


Inclusive tech products that are appropriate improve the user experience for low-income and underserved users

Mobilife Insurance to underserved_header
Mobilife Insurance to underserved


Inclusive tech products that are accessible leverage channels and devices that can better reach excluded segments  

Graviti's customers stand next to their newly purchased solar water heater
Graviti’s customers stand next to their newly purchased solar water heater


More examples of AAA products can be found throughout our portfolio and the metrics that we track to assess each element of the Framework:



A final consideration for tech innovators, beyond ensuring that products meet the needs of and can be used by end consumers, is the consideration of profitability. Products that are inclusive should also contribute toward the company’s bottom line in order to remain sustainable. A case study from BFA Global looks at inclusive transaction accounts as an example, leveraging a unit costing analysis to illustrate how efforts to improve inclusiveness on the demand side can also impact the bottom line on the supply side.

Ultimately, the key question for a provider as it considers underserved and low-income customers is whether it can develop a fintech product that is significantly more AAA than the existing alternatives for low-income customers and do so in a cost-effective way. If so, they are likely to acquire and retain users who are currently excluded, and create a durable and sustainable business in the process.  


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