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SBP to Launch Innovation Challenge Facility to Promote Digital Financial Services in Pakistan


State Bank of Pakistan (SBP) is launching an Innovation Challenge Facility (ICF). This facility aims to find and support innovative fintech solutions that can promote Digital Financial Services (DFS) in the country by creating an enabling environment and ecosystem.

In this regard, grants will be issued to financial service providers, financial technology providers and institutions with a digital solution to develop new or expand existing financial products, services and delivery platforms that will increase financial access for people living at the bottom of the income pyramid.

The goal of this facility is to allow market players to develop innovative solutions for Pakistani consumers and enterprises for increasing access and usage of financial services within the existing infrastructure of Asaan Mobile Account (AMA).

This will foster the creation of a client-centric DFS system which encourages customers to not only open Digital Transaction Accounts (DTA) but use other financial instruments to drive adoption of DFS.

Going forward, these solutions can play a major role to digitize payments, foster inclusive economic growth, improve value chains in industries, increase socio-economic well-being of masses and bring transparency in the economy.

The key objective of Innovation Challenge Facility is to provide an opportunity to financial institutions (FIs) as well as non-financial players to experiment with innovative digital financial products or services in the production environment but within a well-defined space and duration.

The scope of the facility will focus, but not be limited to the following areas.

Transactional Banking

Payments Solutions

Government to Person (G2P) and Person to Government (P2G) Payments

Development and integration with Third Party Service Providers (TPSP)

E-Commerce

Interoperability

Digital Lending

Supply Chain Digitization

Digitization of Microfinance Institutions’ Payments

Digitization of International Remittance

RegTech solutions

Digitizing the Rotating Savings and Credit Associations (ROSCA)

Crowdfunding

Insurance marketplace / platforms

Loyalty and Discounts, closed loop wallets

Agri lending platforms/ marketplaces

SME lending platforms/ marketplaces

Wealth Management Algorithm

Escrow as a service

However, the first batch of proposals will focus on adoption and up-scaling of Asaan Mobile Account (AMA) Scheme.

Facility Management Innovation Challenge Facility

(ICF) will be housed at NFIS Secretariat at State Bank of Pakistan After having initial evaluation, the shortlisted proposal will be presented to Evaluation Committee which draws representation from SBP, PTA, DFID and private sector.

The committee is assisted by the National Financial Inclusion Strategy (NFIS) Secretariat and the technical team in fulfilling its duties such as screening, approval, and oversight of the challenge grants.

Submission/ Approval of Proposals

Applicants may submit their complete proposals to the NFIS secretariat. Upon a thorough desk review and detailed consultation with applicants, NFIS Secretariat will present proposals to the Evaluation Committee.

The Committee, after analyzing the proposal, its deliverables, impact, and operational readiness will award approval along with financial assistance to pilot test the innovation.

Duration and Size Grant

The value of grants will be determined according to the financing requirements of the proposal in question; however, the duration of the projects should be ideally not more than ten months. Applicants will be required to contribute at least 10% of the total project cost as matching funds.

Provision of Incubatory Environment

Depending upon the nature of the proposal, appropriate regulatory support by relaxing specific legal and regulatory requirements as prescribed by SBP will be provided to grantee institution during the experimentation phase.

Monitoring

NFIS Secretariat will monitor progress through quarterly progress reports submitted by grantees. The quarterly reviews will present three key aspects of projects, including progress on work plan, outcomes and grant utilization. The project’s progress will be seen over ten months and in case of signs of failure; the project funding may be ceased.

Knowledge Exchange

The grantees are expected to share project experiences in the form of regular reporting, contribution to newsletters, presentations and conferences.

Eligibility Criteria

Proposals should cover the following elements to be eligible for consideration:

The product, service or solution must be designed to be implemented in Pakistan.

The product, service or solution must be backed by some demand-side evidence demonstrating its viability against an existing challenge faced by the target market.

The product, service or solution could be financial in nature, but a support service to a financial service provider will also be permitted.

The product, service or solution must be mobile network operator agnostic.

ICF will be an on-going facility till March 2019. Applicants may submit their concepts/ proposals at any time. However, these concept & proposals will be reviewed in a batch of at least 3-4 proposals.

Complete proposal must be sent electronically at nfis-icf@sbp.org.pk

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