B Mirror Report : The SME Foundation (SMEF), under the Ministry of Industries, in partnership with the United Nations Development Programme (UNDP), today launched the Insurance Innovation Challenge (IIC) in Dhaka. The initiative aims to enhance resilience among Cottage, Micro, Small, and Medium Enterprises (CMSEs) through innovative insurance solutions.

CMSEs account for 32% of Bangladesh’s GDP and employ nearly 87% of the workforce, yet they remain highly vulnerable to climate-induced disasters and other systemic risks. Limited access to insurance leaves these enterprises exposed, threatening livelihoods and business continuity.

The IIC, a competitive grant program, will support regulator-approved, technology-driven, and gender-responsive insurance solutions tailored to CMSE needs. Two winners will receive grants of up to Taka 4.86 million and Taka 3.04 million, along with capacity-building support and public visibility, according to a press release.

At the launch, Md. Obaidur Rahman, Secretary of the 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 embed resilience into the financial framework of small businesses, ensuring their sustainability and contribution to national growth.”

Stefan Liller, Resident Representative of UNDP Bangladesh, highlighted the increasing frequency of climate-related disasters, saying, “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. Access to insurance remains extremely limited for these enterprises, leaving livelihoods vulnerable. The IIC will identify and scale innovative insurance solutions that reflect the real operational needs of small enterprises.”

Anwar Hossain Chowdhury, Managing Director of SME Foundation, emphasized the significance of the initiative for marginalized entrepreneurs, while Nurun Nahar, Deputy Governor of Bangladesh Bank, stressed the importance of gender-responsive insurance in building an inclusive and sustainable economic structure. She also noted that Bangladesh Bank provides collateral-free SME loans of up to Taka 5 lakh and is working to link credit guarantee schemes with CMSEs to improve access to finance.

The launch included a keynote presentation by Monirul Hoque, National Programme Officer at UNDP, on inclusive micro-insurance under the IIC. Representatives from the Insurance Development and Regulatory Authority (IDRA), private insurers, microfinance institutions, fintech companies, and development partners actively participated.

During the event, UNDP and SME Foundation signed a Memorandum of Understanding (MoU) to implement their collaborative work on Blended Finance for CMSEs, supported by the governments of the United Kingdom and Sweden, with the insurance component funded by Germany. The MoU reinforces the organizations’ commitment to supporting climate-vulnerable CMSEs in Bangladesh.