J.P. Morgan and the Centre for Innovation, Incubation and Entrepreneurship (CIIE) at the Indian Institute of Management, Ahmedabad (IIM-A) on Tuesday announced that they were collaborating to set up a $9.5 million financial inclusion lab. This would help entrepreneurs working to help lower and middle income (LMI) segment.
The lab is part of CIIE’s Bharat Inclusion Initiative, which was launched in May to incubate and support startups focussed on developing solutions for under-served communities in the areas of financial inclusion, health and education.
J.P. Morgan will provide up to $7 million over the next four years for this initiative, making it the largest philanthropic commitment made by the banking giant outside the U.S.
Apart from J.P. Morgan, the Michael & Susan Dell Foundation, and the Bill & Melinda Gates Foundation will also support the lab as part of their overall commitment to the programme.
The initiative will be aimed at identifying and bringing to scale early-stage fintech startups that are focussed on helping Indian citizens who earn between $2 and $10 a day (around Rs 135-690 a day). Startups which enable access and usage of appropriate financial products and services such as savings, credit and insurance for LMI households will be in focus.
The goal of this initiative is line with the government’s financial inclusion push, where it is striving to bring more of India’s citizens into the formal economy.
“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,” Kalpana Morparia, CEO, South and South East Asia, J.P. Morgan, said in a statement.
The lab will draw insights from the JPMorgan Chase-funded Financial Solutions Lab, a five-year programme launched in the U.S. in 2014 and from international financial inclusion consulting firm MicroSave, the statement added.
According to Anil Gupta, associate director at MicroSave, over 80% of the segment—or 470 million people—were 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.”
The lab will host a series of accelerator programmes to identify solutions for specific financial challenges, and leading ideas will be supported with capital, market access, technical assistance, mentoring and sector expertise, the statement said.