JP Morgan has committed USD 7 million to a USD 9.5-million fund to set up a financial inclusion lab to support fintech startups in association with IIM-Ahmedabad and the Dell and Bill Gates foundations, the Wall Street powerhouse said today. This is the largest philanthropic commitment to date in any country outside the US, the global banking and financial services provider claimed in a statement, adding the beneficiaries of the lab will typically those startups focused on helping low income households who earning USD 2-10 per day. JP Morgan will provide up to USD 7 million over the next four years towards this initiative.
The lab, being set up in collaboration with the IIM-A’s Bharat Inclusion Initiative under its Centre for Innovation, Incubation and Entrepreneurship, is being set up with additional support from the Michael & Susan Dell Foundation and Bill & Melinda Gates Foundation, and the lab will host accelerator programmes to identify solutions for specific financial challenges. Leading ideas will receive capital, technical assistance, mentoring and sector expertise, it said, adding the Lab will focus on early-stage fintech start-ups with innovations that address the unique needs of the lower and middle income segment.
“The startups will enable access and usage of appropriate financial products and services such as savings, credit and insurance for these low-icnome households,” the company said. The IIM-A launched the Bharat Inclusion Initiative in May to help incubate and support startups that are focused on developing technologies that can be used for the benefit of underserved communities in the areas of livelihoods, financial inclusion, health and education.
The lab will draw learnings from the work that JPMorgan Chase-funded Financial Solutions Lab, a five-year programme launched in the US in 2014 and managed by the Center for Financial Services Innovation. To date, participating fintechs have reached over 2.5 million Americans and have seen their users grow 20 times since joining the programme.
“Our initiative aims to identify and nurture fintech startups to generate innovative ideas which will help make financial products and services more accessible to the low income households. With this we are introducing JPMorgan Chase’s Financial Solutions Lab model outside of the US for the first time,” said Kalpana Morparia, chief executive of JP Morgan South & Southeast Asia. Over 80 per cent of the addressable low and middle income households, or 470 million people, are not integrated into the economic mainstream, it said.