DHAKA, Jan 15, 2026 (BSS) - The Insurance Innovation Challenge (IIC) was launched today in Dhaka by the SME Foundation (SMEF) 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.

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, said, “CMSEs are the backbone of our economy, yet they face disproportionate risks from climate change and market shocks. 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 said “Floods, cyclones and droughts are no longer isolated shocks—they have become recurrent stresses that wipe out savings, destroy assets, shut down small businesses and disrupt entire families. In these moments, the vulnerability of enterprises and families becomes inseparable.”

Liller said, “Yet access to insurance for cottage, micro and small enterprises remains extremely limited, leaving livelihoods exposed. For this reason, UNDP and SME Foundation are launching the Insurance Innovation Challenge, to identify and scale innovative, regulator-approved insurance solutions that reflect how small enterprises truly operate”.

Anwar Hossain Chowdhury, Managing Director, SME Foundation noted, “Marginal entrepreneurs face real financial risks, and addressing them remains a priority. This timely UNDP initiative offers a vital pathway forward for CMSMEs”.

Nurun Nahar, Deputy Governor, Bangladesh Bank, noted “Gender-responsive insurance is key to building an inclusive and sustainable economic structure.”

She further added, “To support entrepreneurs, Bangladesh Bank is offering collateral-free SME loans of up to Taka 5 lakh, and plans are underway to link the credit guarantee scheme with CMSMEs to further ease access to finance.”

Monirul Hoque, National Programme Officer, UNDP gave a keynote presentation on “Insurance Innovation Challenge” stressing that IIC focuses on inclusive micro-insurance.

The event also featured active participation from the Insurance Development and Regulatory Authority (IDRA), private insurers, MFIs, fintech companies, and development partners including Mohammad Abu Bakar Siddique from IDRA and Nazeem Hassan Satter, Deputy Managing Director, SMEF.

During today’s event, UNDP and SME Foundation also signed the Memorandum of Understanding (MoU) to operationalize their collaborative work on Blended Finance for CMSEs supported by the United Kingdom and Sweden. 

The insurance component of this initiative is being funded by the Government of Germany. This MoU reaffirms commitment of the UNDP and SME Foundation in supporting the climate vulnerable CMSEs in Bangladesh.