Global banking and financial services provider J.P. Morgan and the Indian Institute of Management Ahmedabad’s Centre for Innovation, Incubation and Entrepreneurship (CIIE) announced their collaboration to set up a Financial Inclusion Lab. The US$9.5 million initiative is aimed at identifying and bringing to scale early-stage fintech start-ups that are focused on helping people in India within the lower and middle income (LMI) segment who earn US$2-US$10 a day. The start-ups will enable access and usage of appropriate financial products and services such as savings, credit and insurance for LMI households.
The Lab is part of IIMA-CIIE’s Bharat Inclusion Initiative (BII), a program launched in May that aims to incubate and support start-ups that are focused on developing technologies that can be used for the benefit of underserved communities in the areas of livelihoods, financial inclusion, health and education. J.P. Morgan will provide up to US$7 million over the next four years towards this initiative. This would be the largest philanthropic commitment made by J.P. Morgan outside of the U.S. Michael & Susan Dell Foundation and Bill & Melinda Gates Foundation are also supporting the Lab as part of their overall commitment to BII.
The Lab will draw insights and learnings from the work performed by the JPMorgan Chase-funded Financial Solutions Lab, a five-year program launched in the U.S. in 2014 and managed by the Center for Financial Services Innovation. Over the past four years, this initiative has supported the development and scaling of fintech solutions that have improved the financial wellbeing of underserved communities in the U.S. To date, participating fintechs have reached over 2.5 million Americans and have seen their users grow 20 times since joining the program.
“India’s vision of creating digital technology driven access to financial services will be incomplete unless we bring these offerings to the lower and middle income segments who are in urgent need of these financial products and services. Our initiative aims to identify and nurture fintech start-ups to generate innovative ideas which will help make financial products and services more accessible to this critical mass of Indians. JPMorgan Chase’s Financial Solutions Lab model is being introduced outside of the U.S for the first time. We are pleased to collaborate with CIIE’s Bharat Inclusion Initiative to help establish it in India,” said Kalpana Morparia, CEO, South and South East Asia, J.P. Morgan.
The initiative will also glean insights from international financial inclusion consulting firm MicroSave and CIIE on where and how fintechs can help the LMI segment. Recent research conducted by CIIE and MicroSave revealed that LMI households have erratic financial inflows and many in the LMI segment struggle to adopt digital platforms for their financial needs. “Over 80% of the addressable LMI market, or 470 million people, are not integrated into the economic mainstream. Early stage fintechs, when provided with the right mentoring, insights and capital support, can have a huge and positive impact on the lives of many people,” said Anil Gupta, Associate Director, MicroSave.
The Lab will host a series of accelerator programs to identify solutions for specific financial challenges, and leading ideas will be supported with start-up capital, market access, technical assistance, mentoring and sector expertise. Fintech entrepreneurs are now being invited to apply to join the Lab.
“The Financial Inclusion Lab is a critical component of the Bharat Inclusion Initiative continuum and will build upon CIIE’s decade long experience of running incubators, accelerators and impact funds to provide inclusion focused tech entrepreneurs the comprehensive support required to turbocharge their journeys. We are excited to partner with J.P. Morgan to create access and opportunity for more people to join the financial mainstream by unlocking entrepreneurial energy,” said Priyanka Chopra, COO, CIIE.
In May 2018, the BII announced support from Bill & Melinda Gates Foundation, the Michael and Susan Dell Foundation and Omidyar Network towards backing start-ups leveraging the ongoing digital transformation in India to create access to services that were hitherto inaccessible for a large segment of Indians.