Dhaka: The Insurance Innovation Challenge (IIC) was launched today in Dhaka by the SME Foundation under the Ministry of Industries, in partnership with the United Nations Development Programme (UNDP) to strengthen resilience among Cottage, Micro, Small and Medium Enterprises (CMSEs) through innovative insurance solutions.
According to Bangladesh Sangbad Sangstha, CMSEs contribute 32% of Bangladesh’s GDP and employ nearly 87% of the workforce yet remain highly vulnerable to climate-induced disasters and other systemic risks. Access to insurance for these enterprises is extremely limited, leaving livelihoods and business continuity exposed.
The IIC is a competitive grant facility that will support regulator-approved, technology-driven, gender-responsive insurance solutions tailored for CMSEs. Two winners will receive grants of up to Taka 4.86 million and Taka 3.04 million, along with capacity development and visibility support, said a press release.
Speaking at the launch, the chief guest Md. Obaidur Rahman, Secretary, Ministry of Industries, emphasized the significance of CMSEs to the national economy and the disproportionate risks they face from climate change and market shocks. He noted that the Insurance Innovation Challenge is a timely initiative that will help embed resilience into the financial architecture of small businesses, ensuring their sustainability and contribution to national growth.
Stefan Liller, Resident Representative, UNDP Bangladesh, highlighted the recurrent nature of environmental stresses such as floods, cyclones, and droughts, which severely impact small enterprises and families. He pointed out the limited access to insurance for these vulnerable groups and the necessity of launching the IIC to identify and scale innovative insurance solutions that reflect the operational realities of small enterprises.
Anwar Hossain Chowdhury, Managing Director, SME Foundation, stressed the financial risks faced by marginal entrepreneurs and emphasized the importance of the initiative in providing a pathway forward for CMSMEs.
Nurun Nahar, Deputy Governor, Bangladesh Bank, mentioned the importance of gender-responsive insurance in fostering an inclusive and sustainable economic structure. She also highlighted Bangladesh Bank’s initiatives to support entrepreneurs with collateral-free SME loans and plans to link the credit guarantee scheme with CMSMEs.
Monirul Hoque, National Programme Officer, UNDP, presented a keynote on the IIC, focusing on inclusive micro-insurance. The event included participation from the Insurance Development and Regulatory Authority, private insurers, and other development partners.
During the event, UNDP and SME Foundation signed a Memorandum of Understanding to operationalize their collaborative work on Blended Finance for CMSEs, supported by the United Kingdom and Sweden. The insurance component is funded by the Government of Germany, reaffirming the commitment to support climate-vulnerable CMSEs in Bangladesh.