Nepali startup Khalti wins UN Fintech Innovation Fund

Khalti – a homegrown financial technology startup in Nepal – has won Fintech Innovation Fund from the United Nations (UN). The fund was jointly launched by the UN Capital Development Fund (UNCDF) and the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) earlier this year.
Along with Khalti, a total of10 companies from across Asia-Pacific region have won the Innovation Fund, according to a press note. 
After being announced the winner for the Fintech Innovation Fund, Khalti is rolling out a special project within July 2019. The project will support women-led micro, small, and medium-sized enterprises (MSMEs) in 12 different districts across the country – from Sankhuwasabha in the east to Darchula in the west – aiming at solving gaps between production and sales of goods produced by 3500 women involved in MSMEs in Nepal. Women involved in Dhaka Weaving to Allo Processing and Weaving to Food Processing will be supported as part of this project, the press note reads, adding that the project intends to deliver financial and digital literacy and skills to women-owned, managed or led MSMEs by bringing all the MSMEs to a digital platform and upgrade their current style of working. “Khalti will be providing them necessary training to be self-sufficient and help them in expanding their business and resources.”
Khalti is partnering with SAARC Business Association of Home Based Workers (SABAH Nepal) to implement the project. Furthermore, Khalti is also mobilising Smart Chhoris to assist the MSMEs.
Over the next year, UNESCAP and UNCDF will provide financial and technical support for Khalti to conduct the project and introduce digital and financial solutions that improve access to finance and enhance operational efficiency of these women-led MSMEs.
“Micro, Small and Medium Sized Enterprises are a vital source of employment and a significant contributor to the country’s GDP in Nepal,” director of Khalti Arvind Sah Elated by this achievement shared, adding, “However, most MSMEs have been facing difficulty in accessing loans and other financial services.”
We are building a hyper local market in Khalti platform and conducting marketing and sales of goods produced by the women and enabling payments of goods directly through Khalti app, he said, adding that we will recommend – on the basis of their monthly income level – for loan from our partner bank so that they can expand their business. “This project offers payment solutions and improved access to finance to the women-led MSMEs in Nepal.”
Through Khalti’s innovations: hyper local market and bulk payment processing system, the women-led MSMEs will be able to connect with their end users directly and receive payments on their mobile phone. The project seeks to uplift the livelihood of women involved in MSMEs in Nepal.
Launched in January 2017, Khalti is an emerging mobile payment solution in Nepal. During this very short period of time, Khalti has emerged as one of the most preferred payment choices amongst customers in Nepal. Khalti allows users to top-up their mobile balance, pay DTH bills, internet bills, various utility bills, book movie tickets, flight tickets, hotel rooms, top up Tootle balance, make payments for food ordered online at Foodmandu, and pay at various online shopping sites in Nepal. Users can avail all these services through its app and website.
The United Nations Capital Development Fund (UNCDF) and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) launched the Women MSME FinTech Innovation Fund in March 2019 in partnership with the Australian Government (DFAT), the Dutch development Bank (FMO), and Visa Inc, with the financial support from the Government of Canada provided through Global Affairs Canada.
According to the World Bank’s statistics, more than 90 per cent of enterprises in developing Asia-Pacific region are MSMEs, making them a vital source of income and employment. However, more than 45 per cent of micro, small and medium sized companies (MSMEs) in Asia and the Pacific experience access to finance as a constraint. The constraints faced by MSMEs limits regional economic growth.

10 digital solutions for women entrepreneurs win support from UN FinTech Innovation Fund

A crowdfunding platform for women farmers, online marketplaces for women-produced goods and services, and e-wallet enabled lending were among ten of the winning business models which will be co-funded by the United Nations (UN) to improve access to finance for women-owned, managed or led micro, small and medium enterprises (MSMEs) in the region.
Launched by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Capital Development Fund (UNCDF) in March 2019, the Women Fintech MSME Innovation Fund will support the implementation of the winning private sector FinTech and digital business solutions for women entrepreneurs in Bangladesh, Cambodia, Fiji, Myanmar, Nepal, Samoa and Viet Nam.
“We received over 100 innovative proposals from businesses registered in more than 20 countries around the region,” ESCAP deputy executive secretary Hongjoo Hahm said, adding that the breadth of proposals received was impressive. “It is encouraging to see how digital finance and digital solutions can be used to address some of the barriers women-led MSMEs face in accessing finance and advancing their business.”
“ESCAP is grateful to the Government of Canada for their support to this initiative,” Hahm added.
MSMEs are a vital source of employment and a significant contributor to the GDP. However, more than 45 per cent of MSMEs in Asia and the Pacific experience financial access constraints. Socio-cultural norms mean women-led enterprises have to overcome gender-specific barriers to access institutional credit and other financial services.
“To address the issues that female business owners face, we need entrepreneur-centric solutions that will allow her to grow her business and reach her full potential,” said senior advisor at the Fintech and Financial Inclusion at the Dutch development Bank (FMO) Andrew Shaw.
The Women MSME Fintech Innovation Fund provides risk capital and technical assistance to pilot technology enabled financial service solutions for women-led enterprises. Out of the 110 applications received, the top 30 proposals were asked to pitch their ideas to an independent investment committee made up of industry experts and regulators.
Over the next year, ESCAP and UNCDF will provide financial and technical support to the ten winning companies as they develop and pilot their business initiatives. In the short-term, the initiatives aim to support more than 9,000 women led MSMEs in Bangladesh, Cambodia, Fiji, Myanmar, Nepal, Samoa and Viet Nam.

UN’s Asia-Pacific Trade and Investment Committee convenes amid global trade uncertainty

Against the backdrop of uncertain trade relations between the United States and China, senior government officials from across Asia and the Pacific gathered in Bangkok this week to re-iterate their commitment to strengthening regional trade and investment.
Convened by the United Nations (UN) Economic and Social Commission for Asia and the Pacific (ESCAP) from March 11 to 15, the Asia-Pacific Trade and Investment Week is a regional platform to discuss issues of importance to trade and investment for ember states. A key event of the five-day meeting is the sixth session of the Committee on Trade and Investment, which provides guidance to ESCAP on its work on bolstering trade and investment cooperation. Delegates engaged in thematic deliberations, including discussions on the implications of rising protectionism for the region, the benefits of trade digitalisation, navigating non-tariff measures for sustainable development, and the pivotal role of science, technology and innovation policies.
Opening the Committee, ESCAP executive secretary Armida Alisjahbana said that ESCAP analysis shows that regional integration can be a powerful stabilising force, and could offset economic losses caused by international trade tensions.
Addressing participants, director-general of the Trade Policy and Strategy Office at the Ministry of Commerce, Thailand Pimchanok Vonkorpon highlighted that, “ESCAP can be a bridge among countries with different backgrounds, needs and experience on trade and investment development that is changing rapidly." She added that ESCAP can play a crucial role in forging cooperation and collaboration in the future.
A record number of 30 member states also attended the intergovernmental steering group on cross-border paperless trade facilitation, which made progress on shaping regional and national action plans to accelerate trade digitalisation in Asia and the Pacific. The preliminary results for the region of the UN Global Survey on Digital and Sustainable Trade Facilitation were reviewed and block chain and other frontier technologies explored to reduce the use of paper documents in trade transactions and boost regional integration.
Among the highlights of Trade and Investment Week was the ‘soft’ launch of ESCAP’s Trade Intelligence and Negotiation Advisor (TINA), an automated online platform that is designed to assist, particularly developing and least developed countries, with often complex trade negotiations. Future extensions of TINA may include legal provisions, non-tariff information, product-level estimates of trade mis-invoicing and resultant tax revenue losses, and the impact of LDC graduation and quantifying impact of tariff reductions.
Another highlight was the launch of the Women Micro, Small and Medium-sized Enterprises (MSME) Fintech Innovation Fund. The Fund will support the expansion of innovative digital and fintech solutions for women-led MSMEs. Implemented as part of a five-year, Canada-funded ESCAP project which aims to support the growth of women entrepreneurs in Asia and the Pacific, the fund is hosted by the United Nations Capital Development Fund’s (UNCDF) Fund Facility investment mechanism, and also has financial support from the Netherlands Development Finance Cooperation (FMO).
"The Women MSME Fintech Innovation Fund contributes to SDG5 by providing support for greater financial inclusion for women including their access to capital, markets and business development services," ambassador of Canada to Thailand Donica Pottie said, adding that the Fund is aligned with Canada’s feminist development policy and Canada is pleased to support the Fund’s work to support innovation to allow women to grow their businesses, improve their lives, and contribute to their families and communities.
"We will be working to co-fund creative solutions that truly address the specific barriers women MSMEs face," UNCDF SHIFT programme manager Rajeev Kumar Gupta said, adding that they look forward to working with the next generation of innovations to impact women MSMEs in the Asia-Pacific region with innovative digital and fintech solutions changing the landscape of how MSMEs operate.

New technologies can improve financial inclusion in Asia

Asia and the Pacific has made important progress in expanding and deepening its financial systems but must make further progress to improve financial inclusion using new financial technology (fintech), according to participants at a high-level Asian Development Bank (ADB) seminar during its 51st annual meeting in Manila, Philippines, today.
This seminar was co-hosted by ADB, the International Monetary Fund (IMF), and Bangko Sentral ng Pilipinas (BSP).
"Governments in the region can improve financial inclusion by broadening access to basic digital infrastructure and providing an enabling environment for innovators and entrepreneurs,” ADB president Takehiko Nakao said, adding that policymakers should also consider ways to improve regulations, including protecting consumers against cybercrimes and fraud, while striking the right balance between innovation and financial stability.
Panelists at the seminar 'New Technologies in Finance: Opportunities and Challenges for Asia' included IMF deputy managing director Mitsuhiro Furusawa, BSP governor Nestor Espenilla, chair Professor at Korea National Diplomatic Academy Oh-Seok Hyun, and director of Social Impact and Public Regulatory Affairs for the IOTA Foundation Julie Maupin.
Panelists discussed how fintech, including new innovations like distributed ledger technologies, virtual currencies, machine learning, and big data, can improve financial inclusion. The lack of access to financial services is widely viewed as a key challenge for Asia’s poor households and smaller firms. About 2 billion people in the world still do not have access to finance and half of them live in Asia and the Pacific.
"Fintech can help foster financial inclusion in Asia by its ability to reach rural areas, making financial services more affordable, and broadening access to small and medium-sized firms,” Furusawa said, adding that financial regulators will play a crucial role in creating an environment that promotes financial inclusion while mitigating the risks.
Seminar participants also agreed that new technologies hold promise for bringing financial services to poorer communities and for overcoming the challenge of obtaining the collateral needed to access formal credit markets. International financial institutions such as the IMF and ADB can play a significant role in supporting countries as new technologies are introduced.
"There will always be a trade-off or a healthy tension between security and convenience as well as efficiency and financial integrity," Espenilla said, adding, "that is why the BSP has established a regulatory environment that allows innovations to flourish, at the same time ensures that risks are effectively managed. BSP’s regulatory approach is shaped by three core principles; ensure that regulation is risk-based, proportionate, and fair; maintain active multi-stakeholder collaboration; and ensure consumer protection."
ADB supports many fintech initiatives in developing Asia. In 2017, ADB, Cantilan Bank, and Oradian, an IT company, launched a pilot cloud-based banking platform to enhance financial inclusion in Mindanao, Philippines. This effort was made possible through support from BSP, which authorised this innovative approach to introduce new financial technologies in the banking sector.
ADB established a new Digital Technology for Development Unit within the Sustainable Development and Climate Change Department in March 2018 to lead efforts to promote and further mainstream digital technology in ADB projects and programmes.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members; 48 from the region.
In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.