FinLab BD - a financial innovation lab awarded BDT 1.75 crore to three innovative ideas
Dhaka July 31, 2023
In the nation’s economy, three innovative ideas were chosen as the top financial inclusion ideas for safeguarding cottage, micro, small, and medium enterprises (CMSMEs) while promoting women's financial inclusion in the formal economy, implementing solutions for women's empowerment, and reducing capital-related expenses, including high-cost informal loans.
The joint event was organized by a2i, UNCDF, and MicroSave Consulting at the Bangabandhu Military Museum in Dhaka. Awards were given to the winners of 'Women's Financial Inclusion Challenge 2022' and 'MSME Innovation Challenge 2022'. The Executive Director of Bangladesh Bank, Mezbaul Haque unveiled the award ceremony and handed the award to the winners as the chief guest. Shah Ziaul Haque, Joint Director of Bangladesh Bank, Md. Mamunur Rashid Bhuiyan, Project Director of a2i programme, Ala Uddin Ahmed, CEO of MetLife Bangladesh, and Selim R F Hussain, Managing Director of BRAC Bank graced the event as special guests.
Over the last decade, the digital finance sector in Bangladesh has experienced rapid growth, but 50% of the country still needs access to formal financial services. The low and moderate-income segments of the population are predominantly excluded from the digital revolution. Innovations in finance and technology can accelerate the growth of digital financial services to ensure that no one is left behind in the new digital era in Bangladesh. To this end, Aspire to Innovate (a2i), the UN Capital Development Fund (UNCDF), and MSC (MicroSave Consulting) have jointly established the FinLab BD in 2021.
The FinLab BD is a platform that supports startups and incumbents in building sustainable business models to contribute to achieving the Sustainable Development Goals in Bangladesh and serving Bangladesh's low and moderate-income populations by advancing sustainable pro-poor growth. Mezbaul Haque, Executive Director of Bangladesh Bank awarded Dana Fintech, Apon Wellbeing and MTB Daylight loan as the winners of the FinTech Innovation Challenge.
Two problem statements have been released for the Cohort-1 Innovation Challenge of the FinLab BD. The first challenge is the Women’s Financial Inclusion Challenge Competition. Many women remain excluded from the formal financial system. In addition, reports found that Bangladesh has significant gender gaps in the usage of digital payments at 15%. FinLab BD invites applicants to develop more gender-responsive financial solutions that help women to access and use formal financial services.
The second challenge is Enabling access to finance for CMSMEs. Despite much support from the government and private sectors, the CMSMEs sector, especially in rural settings, faces several challenges in starting and growing their business. Limited access to finance has been one of the core impediments to the sector’s growth. FinLab BD invites applicants to bring innovative digital solutions to help CMSMEs get better access to finance, lower their capital costs, and steer away from exploitative, high-cost, informal loans.
Ala Ahmad, Chief Executive Officer, MetLife Bangladesh, said, “MetLife Bangladesh is committed to contributing to the economic development of the country through insurance services, empowerment, and investment. Providing financial services is essential to improving the quality of life for people, and that's why MetLife actively works toward expanding financial inclusion. Through the FinLab platform, we are delighted to assist organizations that work with innovative ideas to increase financial inclusion in the country.”
Selim R F Hussain, MD of BRAC Bank, said, “a2i has been providing support to various innovations through digital means. We are thankful to a2i for their efforts in promoting upcoming entrepreneurs. Such initiatives will inspire more creative ideas in the future, fostering a culture of entrepreneurship. As a result, more and more people who have been left behind in the country will be included in the realm of financial inclusion. With the assistance of technology, the formation of an inclusive cashless society will become possible.”
Mr. Mamunur Rashid Bhuiyan, the Project Director (Joint Secretary) of a2i, stated, "The Financial Innovation Lab (FinLab BD) is a significant initiative that will accelerate financial inclusion through the development and piloting of new FinTech products. I believe that the FinLab BD- organized FinTech Innovation Challenge - 2022 will provide selected entrepreneurs with opportunities to create new financial innovative products that will play a crucial role in the economic inclusion of women and enhancing financial accessibility in the micro and small industries. I would like to express my gratitude to the Regulatory FinTech Facilitation Office (RFFO) of Bangladesh Bank, which is providing comprehensive support to this challenge fund program. I also extend my heartfelt thanks to various donor organizations, especially MetLife Foundation, for their financial support to this challenge fund."
Dana FinTech is developing a credit scoring method through their innovation that will ensure financial access for micro and small entrepreneurs to access digital loans. With the innovative idea of "Daylight Loan" by Mutual Trust Bank, a financial model will be created through which small businesses will have the opportunity to take loans daily. They will be able to apply for a loan before sunrise and repay by sunset, allowing them to expand their businesses. Additionally, Apon Wellbeing will create an omnichannel platform targeting female RMG workers. They will be able to purchase and save daily necessities through this platform in their own garment factories. Moreover, it will provide them with the convenience of savings and loans.
FinLab BD will work with the public and private sectors, international organisations, funders, research institutions, and non-governmental organizations. Future collaborations of the FinLab BD may include partnerships to provide investment support for innovations, capacity development for participants on government regulations and policies, and regulatory sandboxes for policy-making institutions and startups. Through FinLab BD, a2i, UNCDF, and MSC will work together to advance financial inclusion and the achievement of the Sustainable Development Goals for the vulnerable in Bangladesh.
The cohort I of the FinLab is supported by the Government of Bangladesh, the Bill and Melinda Gates Foundation, and the MetLife Foundation.
a2i (Aspire to Innovate) is a programme of the Information and Communication Technology Division of Bangladesh and the flagship programme of Digital Bangladesh put forth by the Government of Bangladesh with a central aim to incentivize and provide innovative solutions in the public sector. In conjunction with the Government of Bangladesh, the programme has explicitly leaned towards unlocking the socioeconomic potential of the Bangladeshi citizenry through modern and innovative digital advancement. In line with SDGs, an important aspect of a2i’s work has been providing decent work and economic growth opportunities for the citizenry and the country.
MSC (MicroSave Consulting) is an international financial inclusion consulting firm dedicated to strengthening the capacity of institutions to deliver market-led, scalable financial services to all people. Over the last 20 years, MicroSave has designed and implemented nearly 75 digital finance projects across Africa, Asia, and Latin America, with over 200 banks, MFIs, and MNOs to develop and test over 200 different financial inclusion products and channels. The MetLife Foundation supports MicroSave Consulting as one of the founding partners of FinLab BD.
The UN Capital Development Fund (UNCDF) makes public and private finance work for the poor in the world’s 46 least developed countries.
With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF’s financing models work through two channels: financial inclusion that expands the opportunities for individuals, households, and small businesses to participate in the local economy, providing them with the tools they need to climb out of poverty and manage their financial lives; and by showing how localized investments—through fiscal decentralization, innovative municipal finance, and structured project finance—can drive public and private funding that underpins local economic expansion and sustainable development.
By strengthening how finance works for poor people at the household, small enterprise, and local infrastructure levels, UNCDF contributes to SDG 1 on eradicating poverty and SDG 17 on the means of implementation. By identifying those market segments where innovative financing models can have a transformational impact in helping to reach the last mile and address exclusion and inequalities of access, UNCDF contributes to several different SDGs.